Hansard -- Thursday, February 27, 2003 a.m. -- Vol. 12, No. 1 (HTML)



CONTENTS

	Routine Proceedings
		Page

Committee of the Whole House		5089
	Energy and Mines Statutes Amendment Act, 2003 (Bill 10) J. MacPhail Hon. R. Neufeld K. Manhas P. Nettleton

Reporting of Bills		5097
	Energy and Mines Statutes Amendment Act, 2003 (Bill 10)

Third Reading of Bills		5097
	Energy and Mines Statutes Amendment Act, 2003 (Bill 10)

Personal Statement		5097
	J. MacPhail

Throne Speech Debate (continued)		5097
	T. Bhullar J. Nuraney

The Chair: Before we start, I just want to caution the members that this is committee debate. Focus your attention on the actual contents of the bill. We are dealing with section 2.

J. MacPhail: Thank you, Mr. Chair, and I appreciate your advice. Section 2(11) starts off by saying: "Despite the common law and the provisions of this or any other enactment…." Basically, the whole premise of this subsection of section 2 is to exempt this bill from the common law and any other provisions of this or any other enactment. Could the minister please explain why this exemption is necessary?

Hon. R. Neufeld: Before I begin, maybe I should again introduce the officials that are with me. I have Les MacLaren on my right, the chief executive officer of Crown agencies secretariat. I have behind me Chris Trumpy, special adviser to the Ministry of Energy and Mines on energy policy. On my left is Gary Sherlock, director of finance with B.C. Hydro.

The reason is to confirm B.C. Hydro's ability to enter into agreements as designated by cabinet.

J. MacPhail: Sorry, Mr. Chair. Because of the circumstances I find myself in physically, I'm having trouble hearing today. I'll be speaking a lot more loudly just for the benefit of everybody in the House. That will be something to look forward to.

Hon. R. Neufeld: Usually I do speak loudly, and I'll attempt to do that for the member. That is to confirm B.C. Hydro's ability to enter into agreements as designated by cabinet.

J. MacPhail: Is there some precedent or some other legislation that, if this section weren't here, would now impinge on that right?

Hon. R. Neufeld: Again, the response that I gave earlier. What we are doing, so it's clearly laid out, is trying to be as clear as we possibly can with this bill and as transparent as we possibly can. It's to confirm B.C. Hydro's ability to enter into agreements as designated by cabinet.

J. MacPhail: Unless we're going to interpret this as overkill, there must be some logic. There must be some reason behind including these words. Let me put this in the reverse — a negative option for the minister. If this clause didn't exist, would the authority, with the approval of cabinet, have the ability to enter into the agreement with Accenture?

Hon. R. Neufeld: Again, I'm going to stick to my same response to that question. What we're trying to do is make sure that it's fully understood in this bill, Bill 10, what we're doing with the B.C. Hydro authority act. It is, again, to confirm B.C. Hydro's ability to enter into agreements as designated by cabinet.

J. MacPhail: The reason I'm asking these questions is that I am very worried that what this section does is move the ability for approval of hydro rates, and a huge input into a hydro rate, from an independent commission to a political body, which is cabinet.

Let me ask…. Section 2(11)(a) reads: "Despite the common law and the provisions of this or any other enactment, if an agreement is designated under subsection (9), (a) the authority is deemed to have, and to have always had, the power and capacity to enter into the agreement."

This seems like overkill to me unless there's a reason for it, unless there's some legislation that would impinge the authority's right to do this or unless there's some way that the BCUC has authority that would impinge on this right as well. Let me ask this question: what is it that requires the legislation to assert almost a historical perspective, the historical perspective being "always had the power to enter into this agreement"? If that's the case, why the legislation?

Hon. R. Neufeld: Again, all we're trying to do is be very clear in this act that B.C. Hydro has the authority to enter into those agreements for support services and to carry those agreements forward. That's all this act is doing.

J. MacPhail: What I am trying to seek here is assurance from the minister, and it's troubling. Let me just ask for it directly. We're now removing the authority — with very, very airtight language, it seems, that not only writes into the future but designates in the past, by law, that the authority has always had the right to enter into these agreements. It's an interesting way of writing legislation. But it does seem to me that we are now doing exactly what this government promised it wouldn't do. We're moving approval from an inde-

pendent commission, the B.C. Utilities Commission, to a political body, the cabinet, and that is exactly the opposite of what this government said over the many years in opposition and during the election.

Hon. R. Neufeld: In fact, during the election and in the energy policy, we committed that we would bring B.C. Hydro back under the auspices of the B.C. Utilities Commission — something that the last administration had changed. We are not removing that authority at all. In fact, what we are doing is putting it in place. As I said yesterday, the B.C. Utilities Commission will have the authority to review all contracts that B.C. Hydro has when it does a rate review, whether those contracts are with Accenture or with — I don't know — Nesbitt Burns. Whoever Hydro has contracts with out there, the B.C. Utilities Commission will have the ability to review those contracts in full during the rate review and decide if they are not in the best interests of the ratepayer. If they're too costly and Hydro could do better, they have the ability to refuse to pass those costs on to ratepayers. All we're doing is making sure that takes place.

J. MacPhail: Even if you take the minister at his word, then what is the purpose of this particular section? If you take the minister at his word, then this section has no meaning. But clearly it does have meaning. It has the meaning of transferring the responsibility for the portion of any agreements entered into directly between privatized companies and the authority, Hydro, as being exempt from requiring approval.

I don't think the minister can suck and blow at the same time. That's what he's trying to do. He's somehow trying to say that all this does is allow cabinet to make the agreement, and that's it. Then somehow he says: "But the B.C. Utilities Commission isn't being hamstrung in its authority." But, of course, it is, because in the past, without this legislation — in the past meaning minutes ago or until this legislation is passed today — the B.C. Utilities Commission would review and approve the Accenture agreement. Or am I misinterpreting the role of the B.C. Utilities Commission as it exists now, before this legislation is passed?

Hon. R. Neufeld: Again, what this act lays out very clearly for British Columbians is that the core assets of B.C. Hydro remain in public hands and that support services are defined in the act to lay out which support services B.C. Hydro could outsource. It's not the government that signs the agreement. B.C. Hydro has an agreement that it signs with someone else. They have to prove to government, Treasury Board and cabinet that this could be done in a better fashion if they entered into an agreement. It also says, in subsection (12), that the B.C. Utilities Commission still has the authority to review all the costs associated with those contracts when they're having a rate review.

I think it lays out it all out pretty clearly for the member that the role of government, the role of B.C. Hydro, is in acquiring support services in response to the energy plan, which said that they were to outsource all services they could as long as they can meet the same level of service and have some cost saving, and that the B.C. Utilities Commission will have the oversight over B.C. Hydro once again, something it didn't have for about ten years.

J. MacPhail: I appreciate that the minister has asked to keep within a certain box, but these are actually very specific questions. They're not rhetorical questions; they're very specific questions that are completely legitimate. In some cases, the message box of the minister simply won't work.

Does the minister suggest that B.C. Hydro can enter into an agreement without cabinet approval?

Hon. R. Neufeld: B.C. Hydro enters into multitudes of agreements over the years. I'm sure when that member was responsible for B.C. Hydro, there were all kinds of contracts that B.C. Hydro entered into. That's in the normal course of business, B.C. Hydro being as large a business as it is in the province. Certainly they can enter into agreements. This definitively lays out what support services are and what core services are.

J. MacPhail: Then how does that jibe with subsection (9), which says: "The Lieutenant Governor in Council, by order, may designate any agreement entered into…"?

Hon. R. Neufeld: Again, it's pretty straightforward. Cabinet, "by order, may designate any agreement entered into or to be entered into by the authority that the Lieutenant Governor in Council considers relates to the provision of support services to or on behalf of the authority," meaning B.C. Hydro. Then it lists in subsection (10) the support services that would be thought about in using subsection (9).

J. MacPhail: I accept the minister's answer that Hydro can enter into agreements without cabinet approval. But the agreements that are exempt now from BCUC approval by this law have to be designated under this act, subsection (9), by the Lieutenant-Governor-in-Council. That means cabinet. So if the Accenture deal is designated as an agreement under this act, then cabinet has to make that designation. Or am I wrong?

Hon. R. Neufeld: Again, cabinet would review that in relationship to the energy plan. Section 4 of the energy plan says that B.C. Hydro will outsource all the services it possibly can, as long as it can actually prove to cabinet and Treasury Board that those services can be procured at a lesser cost but still have the same level of service or, in fact, better.

J. MacPhail: Unless the minister is going to challenge me, I'm just going to start answering my own

questions. The agreement outlined in subsection (11) here has to be designated, and once it's designated by cabinet, it's exempt from independent examination by the B.C. Utilities Commission. We have a situation where cabinet will be making the determination about agreements that are exempt from the BCUC. That's a political body making decisions about hydro rates when, indeed, the government promised that it would be the independent body of the BCUC.

So, no matter how often the minister stands up and says, "The past was bad; the past was awful because BCUC didn't determine the rates," we have a government that is legislating a political body determining rates. That's what we have here.

Sub-subsection (b) of subsection (11). I want to make this clear. Actually, Mr. Chair, I'm going to make this clear every single time because it's important for the record, the future. Section 12(11)(b) says: "(b) the agreement and all actions of the authority taken in accordance with the provisions of the agreement are authorized, valid and deemed to be required for the public convenience and necessity."

So we have — talk about overkill — the fact that common law can't apply. Other enactments can't apply. The B.C. Utilities Commission Act can't apply, and now we have it that it's deemed to be for public convenience. So what exactly does the minister mean by "public convenience and necessity"?

Hon. R. Neufeld: Again, this does not exempt B.C. Hydro from the B.C. Utilities Commission. I've said that now I don't know how many times. I will continue to say that because that is, in fact, true. If you go to subsection (12), it clearly states that all the costs that are incurred will be reviewed and can be reviewed by the B.C. Utilities Commission.

What the previous subsection does…. If the member thinks it's overkill, it's interesting. We're trying to be as definitive as possible. I suppose if we were elusive, then the member would say we're elusive. We're being as definitive as possible so people understand, can actually read the bill and understand what authority B.C. Hydro has to enter into an agreement, and that those agreements can be fully reviewed by the B.C. Utilities Commission when a rate review hearing is held.

K. Manhas: As I read this legislation, as far as I understand it, it allows for support services to be outsourced in B.C. Hydro. It defines quite clearly support services as meaning services that are support or are ancillary to the activities of the authority, but that does not include the production, generation, storage, transmission, sale, delivery or provision of electricity. As far as I understand that, this legislation will actually allow B.C. Hydro to be more flexible in running their operations in a more business-like manner and a more efficient manner at a lower cost. Is that correct?

Hon. R. Neufeld: That is correct. The deal that may come with Accenture Business Services is widely known, and it's said that it will save the ratepayers and the taxpayers of the province about $250 million over ten years. That's a substantial saving. I think that's good business sense for B.C. Hydro. That's exactly what the board of B.C. Hydro should be looking at doing. Any place that they can cut their costs and still provide the same level of service or even better, because we should always strive to be better, is actually good business sense. It's good business sense for the ratepayers. It's good business sense for B.C. Hydro. It's good business sense for the province.

Hon. R. Neufeld: All savings that B.C. Hydro will make actually will be in their bottom line. There's a certain amount they will have to pay to the shareholder. That's been an agreement for a long time. They will go directly to B.C. Hydro and, in effect, directly to the ratepayers.

K. Manhas: There have been a number of people, including the Leader of the Opposition and other members, who have frightened members of my constituency about the direction that B.C. Hydro is going. I'd just like a couple of clear answers. Can the minister reassure my constituents that this outsourcing — this legislation — will still mean that B.C. Hydro's core assets will remain in public hands?

Hon. R. Neufeld: Yes, as we promised during the election — as that member promised, as I promised and as the Premier promised — the core assets of British Columbia Hydro remain in public hands. It's going to be regulated by the B.C. Utilities Commission, so we can have the lowest-cost power possible going forward and so we can maintain our British Columbia advantage well into the future and encourage more business in the province of British Columbia.

The deal that we spoke about earlier with Accenture will actually bring a business to Vancouver that will employ more people. We'll have the ability to go out and try and secure — from about $58 billion worth of services that are done in North America through utilities — some of that business, and that employs British Columbians.

All things to do with B.C. Hydro, with the outsourcing, will be done in British Columbia with British Columbia people actually working. I think that's good news for the province of British Columbia.

K. Manhas: Very simply put, B.C. Hydro will not be privatized. Is that correct?

Hon. R. Neufeld: The core assets of B.C. Hydro remain in public hands. This bill allows B.C. Hydro to outsource some of their services as defined in the bill, so they can procure those services more cheaply. That's what's happening.

J. MacPhail: Well, I'm sure the constituents of that member's riding will feel reassured by his penetrating examination of the issues. They could have actually gone on the website and read the message box of the Liberal news release. The role of legislators in this chamber is to actually give meat to those promises, to debate legislation that puts the lie to those promises and to explore it in depth. That's what we're doing. Feel free to underrepresent your constituents like you just did.

Back to my question about sub-subsection (b). "Public convenience and necessity" is in this legislation. The minister somehow suggests that this is just innocuous. He's back to his line of the day — that he tried to slip this legislation through as being merely housekeeping.

"Public convenience and necessity" is a legislative term that has legal meaning. "Public convenience and necessity" is normally reserved for extraordinary circumstances that place time lines on a project. That's what "public convenience and necessity" has historically been used for legislatively. For instance, if there's a project that's facing pressing time lines and needs to have legislative authority, that's the phrase used. "Public convenience and necessity" gives the legal authority to drive that project through. What's the time line that this government is facing that they require this as a defence?

Hon. R. Neufeld: The term "public convenience and necessity…." Actually, the member read out a description of that. She should also know that "public convenience and necessity" is a term used in the B.C. Utilities Commission Act that is fairly common. This gives the authority to Hydro to enter into those contracts, but subsection (12) demonstrates that the B.C. Utilities Commission will have every right to review all those costs, all those contracts. In fact, we'll be able to ask for the Accenture contract and have a look at it to make sure that what's happening is in the best interests of the ratepayers of B.C. Hydro in the province of British Columbia.

J. MacPhail: It gets a little harder to apply the message box to some real questions, doesn't it? I was exactly quoting from the Utilities Commission Act when using the phrase "public convenience and necessity." It's there that the legal term is applied to rush projects through, yet we have a piece of legislation that deems just any agreement as if it's in that legal context of being deemed to be in that public convenience and necessity. Is there a clock ticking somewhere that requires this heavy hand?

J. MacPhail: What will happen to B.C. Hydro if (1) the Accenture deal isn't signed, or (2) this legislation doesn't go through?

Hon. R. Neufeld: If the deal is not signed between B.C. Hydro and Accenture Business Services, there will obviously be some reason B.C. Hydro will have for not doing that. I guess they just wouldn't sign the deal, but that doesn't preclude that we're not going to put this act through. We're going to put this act through this House so that B.C. Hydro can continue providing the services to British Columbia ratepayers as cheaply as it possibly can. That's what is designed here, and it's designed here to carry out the energy plan that we had wide consultations on across the province for a year and a half.

J. MacPhail: What changes will there be to matters that are currently before the B.C. Utilities Commission once this legislation is passed?

J. MacPhail: What happens to the matter of the application of the OPEIU before the B.C. Utilities Commission?

Hon. R. Neufeld: I'm not sure. I'm not aware of all the conditions that are in the OPEIU statement before the B.C. Utilities Commission.

J. MacPhail: Then how can the minister make a statement that nothing will happen with this legislation? What is it? You're not aware of the applications and therefore you don't know what will happen at the B.C. Utilities Commission? Or you are aware of the applications and nothing will change?

Hon. R. Neufeld: We're dealing with Bill 10. We are currently laying out in pretty plain language what B.C. Hydro is able to do and what responsibilities the B.C. Utilities Commission has in relationship to that. I'd like to move forward with those issues.

J. MacPhail: Well, that's exactly what we're doing. It's just that the minister refuses to answer questions.

This section exempts agreements from going before the B.C. Utilities Commission. It changes the role of the B.C. Utilities Commission. Somehow the minister thinks it's not fair to ask about what happens to the business that's before the B.C. Utilities Commission. I guess incompetence is a defence, but that's what he just said. He's given me an answer based on the fact that he doesn't know what's before the B.C. Utilities Commission.

I'm going to move into sub-subsection (e). If I could have a two-minute recess, unless there are other questions that could carry on for…. I do have more questions.

J. MacPhail: Section 2(11)(e) is a very interesting section of the legislation. Let me read it. It says:

This clause basically says the authority — that being B.C. Hydro…. The agreement is designated by cabinet, and the Utilities Commission cannot give approval or authorization or permit or order anything in connection with that agreement or any actions taken in accordance with the terms of the agreement. Not only does it say that the overall agreement can't be subject to the scrutiny of the B.C. Utilities Commission, but the actions taken in accordance with the agreement can't be subject to scrutiny. How do those words jibe with the minister saying that the B.C. Utilities Commission can review, let's say, the Accenture deal?

Hon. R. Neufeld: I will go to the next subsection, (12). "Nothing in subsection (11) (e) precludes the commission from considering the costs incurred, or to be incurred, in relation to an agreement designated under subsection (9) when establishing the revenue requirements and setting the rates of the authority" — meaning B.C. Hydro.

J. MacPhail: Well, the minister seems pretty clear how sub (e) of (11) will work in conjunction with clause (12). Maybe he could just outline it. What are the questions that the Utilities Commission will be allowed to ask in relation to the Accenture deal?

Hon. R. Neufeld: In fact, I'm on the record, I think, quite a number of times through this debate yesterday and today that all the costs that are incurred by B.C. Hydro are reviewable by the B.C. Utilities Commission. Regardless of what contract or whatever purchase they make or any agreement they make, those costs will be reviewed by the B.C. Utilities Commission. Particular to the Accenture agreement, they can request that the Accenture agreement be put on the table, and they can review that agreement to make sure that what's in that agreement is actually factual, that the services will be provided at just the same level or a better level and that the costs actually will be less.

P. Nettleton: I understand that B.C. Gas went through a Utilities Commission hearing when it sought to outsource its customer services to Customer Works last year. I'm just wondering: why would B.C. Hydro with Accenture be exempt from this review when B.C. Gas apparently was not?

Hon. R. Neufeld: The response is that we have in Bill 10…. We're moving towards actually putting in defining language what support services are; what the authority, B.C. Hydro, is able to do; how they're able to do it; and that the B.C. Utilities Commission will be able to fully review all those costs that are provided to the entity — that being B.C. Hydro — to make sure that they're within industry standards and that they are provided at a standard that is better than is being provided now or is at least the same.

P. Nettleton: For your information, with respect to my earlier question, a few days after the hearing, Accenture acquired a controlling interest in Customer Works. Accenture was outside of public review here and now will be again with Bill 10. Comment, please.

Hon. R. Neufeld: I have answered the questions as best I can. We're talking about Bill 10 here. We're not talking about B.C. Gas. We're not talking about Customer Works.

J. MacPhail: In fact, I think that members of the Legislature are trying to figure out why what was good for the private sector and B.C. Gas is now not good for this government when it privatizes a third of B.C. Hydro. It's absolutely relevant. That's why I was asking my questions and why the member for Prince George–Omineca…. We're trying to figure out what happened at Customer Works and now with the BCUC, and what now won't happen with the Accenture deal.

The minister says that all costs will be reviewed under the Accenture deal. If B.C. Hydro, which has declared that rates are going to go up, puts forward the cost of the Accenture deal as an element of the need to raise rates, does the B.C. Utilities Commission have the right to go in and look at that Accenture deal and discount or discard the costs related to the Accenture deal when determining hydro rates?

Hon. R. Neufeld: It's not because I can't hear. It's because I wasn't listening. Could the member ask the question again, please?

J. MacPhail: The minister states that the B.C. Utilities Commission can review all costs associated with the Accenture deal and that they can make determinations on that basis. My question is this. If the authority, B.C. Hydro, puts forward the costs of the Accenture deal as justification for part of a rate increase or a rate change, can the B.C. Utilities Commission look at the costs incurred by that Accenture deal and use that information to reject any part of the request for rate change?

J. MacPhail: Will the right of the B.C. Utilities Commission to review the Accenture deal be the same as the right they had to review the Customer Works deal with B.C. Gas, which is exactly the same kind of agreement but in the private sector? Will it be exactly

Hon. R. Neufeld: Again, the B.C. Utilities Commission will have the ability to review all the costs associated with the Accenture agreement between B.C. Hydro and Accenture to provide support services. They will be able to review in depth all the costs associated with providing those services.

J. MacPhail: This Accenture deal is exactly the same kind of deal that B.C. Gas, which is a regulated entity, the same way that B.C. Hydro is…. They outsourced their "support services" to a company called Customer Works. A review of that at the B.C. Utilities Commission happened. It was a wide-ranging review by the Utilities Commission. There were interveners allowed. The interveners were allowed to ask questions. The approval of the agreement had to be given by the B.C. Utilities Commission.

There were absolutely no allegations whatsoever by anyone, including the company, that there had been an exposure of important and secret commercial confidential documents. There was no allegation whatsoever that the business dealings of B.C. Gas were challenged by this review. What I am asking is very specific. Why is what's good for the goose not good for the gander? Or is what's good for the goose good for the gander, the goose being B.C. Gas and the gander being B.C. Hydro?

Hon. R. Neufeld: Again, when Hydro appears before the B.C. Utilities Commission for a rate review later this fall, the B.C. Utilities Commission will have every right and every authority to review every part of the Accenture deal that Hydro gets services from. As to their costs, I'm sure there will be public involvement, and questions will be able to be asked about the agreement and how the services are provided. So it will be fully reviewed at that time.

J. MacPhail: I'm going to take that as good news. When the minister says public involvement, is there a reason why he didn't use the term "intervener status," or was he just trying to make it in plain English?

Hon. R. Neufeld: All B.C. Utilities Commission hearings have public involvement, to my knowledge, and will continue to have public involvement going on into the future. They've always been able to and will continue to be able to.

J. MacPhail: Yes, I know. That public involvement is usually called getting intervener status. I assume that's what the minister is referring to.

P. Nettleton: I would direct the minister's attention to subsection (12), if I may. Subsection (12) only allows for review of the costs incurred in relation to privatization. I would ask two questions here with respect to subsection (12).

What about service quality? Why is it that only the costs are considered, but the actual quality of the services provided does not appear to be part of the review? This cannot be good for customers who want value for their money. I would also point out that Customer Works under B.C. Gas went through a service quality review last year.

Hon. R. Neufeld: Actually, point 4 in our energy policy — and I'll read it into the record — says that this subsection reinforces the clear policy and intent of the energy plan. B.C. Hydro will be able to outsource support services where costs can be reduced for electricity consumers while maintaining the quality of services. So the B.C. Utilities Commission will have the right to review, with their expertise and their knowledge as it relates to other utilities, the level of service. There will be a level of service that will be designated in a contract, I believe, between B.C. Hydro and Accenture. The B.C. Utilities Commission will have every opportunity to review that that service is actually happening, that it's taking place and that costs would be cheaper.

P. Nettleton: Has the minister seen the contract with Accenture? He makes reference to the fact that he believes there may be some reference to quality in that contract. Has he read the contract?

Hon. R. Neufeld: No, I haven't read the contract. This is enabling legislation that will allow government to move forward, through cabinet, to allow this to take place. That review will take place. Also, when B.C. Hydro goes before the Utilities Commission for a rate review this fall, all aspects of the deal between Accenture and B.C. Hydro will be reviewed for level of service, costs — all those things that are related to that contract.

P. Nettleton: That's not particularly reassuring, I can tell you. That's not the kind of answer that's going to provide any answers for people who are wondering what's happening with respect to this contract.

The Chair: Member, will you take your seat for a moment, please. I just want to remind the member that we are not debating the Accenture contract. We are debating Bill 10. We are currently on subsection (12), so I would hope that you keep focused on that.

P. Nettleton: That's precisely what I'm doing: focusing on subsection (12). A further question with respect to subsection (12) is this. The section only talks about reviewing the costs associated with privatization. What about benefits? If, in fact, there are benefits to be realized, what assurances do we have with respect to those benefits?

Hon. R. Neufeld: As the B.C. Utilities Commission reviews the costs associated with this contract, there

will be a cost savings, and those benefits — I guess cost savings are benefits; at least I understand them to be — will be benefits to the authority — namely, B.C. Hydro.

J. MacPhail: I assume, then, that the $250 million over ten years that has so far been only part of the minister's mind…. They're not booked anywhere else; they're not demonstrated on paper. I assume the first application that will be made to the B.C. Utilities Commission will be by the B.C. Hydro board demonstrating that a $250-million-over-ten-years benefit should be passed on to the ratepayers of B.C. Hydro. Is that correct?

Hon. R. Neufeld: Yes, once this is in place and once we've passed this bill and B.C. Hydro appears before the B.C. Utilities Commission in a rate review, they will have to demonstrate that those savings they're telling us are in this deal — by doing this deal — are going to actually save $250 million over ten years. They'll have to demonstrate to the Utilities Commission how and when that's going to take place.

Maybe the minister didn't understand my question. I assume the minister knows where that $250 million savings is, because he touts it every day.

Hon. R. Neufeld: Again, these are statistics that the B.C. Hydro board released publicly, in fact, quite a while ago. Those are the statistics I'm working on.

J. MacPhail: Let me ask about another cost perhaps. I may be way off base here, but let me just put this to the minister. It will clear up a lot of issues. The restructuring costs…. The minister has a figure for them. It's in the millions. I have a figure of $60 million. Even if we take the restructuring costs that the minister outlined, do those restructuring costs include the privatization options listed under the Hydro and Power Authority pension plan?

Hon. R. Neufeld: I'm trying to find my paperwork, but the short answer is yes. They do.

J. MacPhail: The document that I'm referring to is the Hydro and Power Authority pension plan. It was done on October 30, 2001. Sorry, I have draft 7 from October 30, but these sections have gone through to the final document. In fact, these pension plan changes arose out of the impending Accenture deal.

Section 5.04 talks about re-employment, the right to reinstate. Then another subsection talks about the right to reinstate privatized. It says: "Where a person who has been declared privatized by B.C. Hydro and who receives a refund or has made a transfer of funds under section 14.02 again becomes a plan member, that person may, with the consent of the trustees, transfer to the fund from a qualified retirement savings vehicle" — back into the fund.

Then there's also the ability for pension plans…. I'll read section 14 again, portability between pension plans. Section 14.02 talks about privatized employees: "Where B.C. Hydro divests, sells or transfers any portion of B.C. Hydro or service provided to another entity or individual, B.C. Hydro shall establish a list of employees who have become privatized employees. For the purposes of this section, an employee whose name appears on the list shall be conclusively deemed to be a privatized employee…." Then it goes on to say what the following options are for commuting pensions, etc., of the privatized employees.

Will the costs associated with the B.C. Hydro pension plan for privatized employees be part of the transition costs of the Accenture deal that can be examined by the B.C. Utilities Commission?

Hon. R. Neufeld: Yes, those costs are included. The B.C. Utilities Commission will review them, but those retirement costs of some $35 million are there regardless of what happens. B.C. Hydro is responsible for those costs.

J. MacPhail: But I'm referring to the document in the pension plan that talks about privatized employees. Those costs are included in the Accenture deal costs. Is it safe now for the minister to admit that this is a privatization exercise? Is it safe for him to go on the record?

Hon. R. Neufeld: We've answered these questions pretty wide-ranging. We're talking about issues right now that aren't even close to what's in this act. I would really like to come back to the bill, Bill 10, and talk about Bill 10.

J. MacPhail: Mr. Chair, we're dealing with subsection (12). Let me just read it for the minister: "Nothing in subsection (11) (e) precludes the commission from considering the costs incurred, or to be incurred, in relation to an agreement…." I just asked a question on whether a certain item would be a cost incurred according to subsection (12). How is it that that's irrelevant and not part of the legislation?

In fact, it's the first time anybody has shone the light on this agreement, this pension agreement, and it's the first time it has been determined that the employees are called privatized employees and that the exercise of privatizing those employees will be borne by B.C. Hydro. It's the first time, and somehow the minister suggests this is old news. It's new news.

The fact of the matter is that this government is incurring tens of millions of dollars in rights to a pension plan merely because they're privatizing employees. It's not Accenture bearing the cost of that privatization. It's B.C. Hydro. No wonder the government can stand up and claim there will be savings of $250 million over ten years — because they're not charging any of the privatization costs to the Accenture deal.

The minister somehow thinks that's old news. I'm sure it will become an absolute piece of new news to every ratepayer who gets dinged for their privatization exercise. I'm sure that will come as news.

Hon. R. Neufeld: Again, all aspects will be reviewable by the B.C. Utilities Commission. This act lays out very clearly how that will take place and how we can move forward to actually start saving the ratepayers of B.C. Hydro some $250 million over ten years. I just can't for the life of me imagine why anyone would want to argue against a Crown corporation that's providing services to people actually being able to do it cheaper. To me, it makes good sense. I think the board has used some very prudent ways of going about this, and we will all benefit.

J. MacPhail: The minister has admitted that the costs of the pension plan to deal with privatized employees is part of the costs incurred by this deal. These are the same employees who run the core assets, and the minister admitted to that yesterday, so we have the privatization of employees running the core assets. Will he resign now?

Well, I expect that the minister's whole body is tightening up, because, in fact, he should admit he didn't mean that he was going to resign if B.C. Hydro were privatizing, or else he should stand up and resign. This is an exercise in privatization. It's an exercise in privatizing the core assets. The costs are being borne by the ratepayer.

Accenture is getting off scot-free, and the government has no evidence whatsoever that there will be $250 million in savings over ten years — none whatsoever. This is a bad deal. It's a bad deal for the ratepayer. It's a bad deal for taxpayers, and it's privatization of B.C. Hydro's core assets. On that basis, the minister should resign, and the Liberal MLAs should vote against this section.

I. Chong: Visiting us today is a grade 4 class from Monterey Elementary School in my riding of Oak Bay–Gordon Head. They've just had a tour of the precinct — a very informative one. They're here now to enjoy a brief session watching all members in the chamber, and I hope we'll all behave for them. They're accompanied by their teacher, Mrs. Woodley, and three of their parents. I hope the House will please make them very welcome.

Hon. R. Neufeld: I have an amendment to section 4, and it relates to grammar only. It's a small amendment.

J. MacPhail: This is an amendment to the Mines Act. Section 6(b) adds the following definition, "detrimental environmental impact," and then goes on to define that as something that "occurs when the quality of air, land or water substantially reduces the usefulness of the environment or its capacity to support life." Is there anywhere else that actually gives something stronger than a detrimental environmental impact? It would seem to me that suggesting something has oc-

curred that prevents the capacity to support life is more than a detrimental environmental impact. How about a disaster?

Hon. R. Neufeld: This should make the member happy, I think. It strengthens the act to actually be able to have some teeth and to carry out the things the mines inspector has to do.

J. MacPhail: This is an amendment to the Utilities Commission Act. What it says is that it amends the Utilities Commission Act in defining a public utility. What it does in that definition is strike out certain words and then add the following: "(g) a person, other than the authority, who enters into or is created by, under or in furtherance of an agreement designated under section 12 (9) of the Hydro and Power Authority Act, in respect of anything done, owned or operated under or in relation to that agreement." What this does is remove it from the definition of what a public utility is and confirms that Accenture is clearly a private utility. Therefore, it just goes to show that what we're doing here is an exercise in privatization, no matter how many times the minister refuses to say so.

Hon. R. Neufeld: Mr. Chair, I move the committee rise and report the bill complete with amendment.

Bill 10, Energy and Mines Statutes Amendment Act, 2003, reported complete with amendment.

Bill 10, Energy and Mines Statutes Amendment Act, 2003, read a third time and passed.

J. MacPhail: I rise to say a few words about the matter that the opposition raised in question period yesterday. We received information from a source that assured us repeatedly that the documents we had been provided were directly related to the government's new Pharmacare income-testing scheme. Late yesterday we discovered that these assurances had been made in error, and I sincerely regret that error.

Hon. G. Collins: I call continued debate on Address in Reply to the Speech from the Throne.

Mr. Speaker, fellow colleagues and any guests who may be present, I wish to convey to each and every one that I consider it an honour and a privilege to be permitted to speak in this great hall. It was nearly two years ago that this government was elected, and many events around the world have eclipsed the history of this great institution and its roots. The events I speak of are the events of 9/11, the loss of the space shuttle and being on the eve of a war in the Middle East.

We owe a debt of gratitude to our forefathers for toiling so diligently to preserve our system of government, a system that other nationals around this planet would envy. We must ask ourselves: in how many other nations around this globe would they permit those who wish to have their voices heard and opinions expressed to stand freely outside an institution such as ours and let their stances be known? We must ask ourselves how many nations would allow opposition parties to form and put candidates forth in a fair and equitable election? Not many, I suggest.

Our system of government is a paradigm for others to follow. In time they will follow, because freedom is innate to humanity. I would suggest that the centrepiece of natural law is the rule of law, which is at the very core of our democratic system. One only has to gaze toward eastern Europe, which serves as an example. I must add, however, that our system of government and democracy did not develop overnight. It evolved over centuries. I submit it is for this reason that as stewards of this great institution, we must as individuals strive to improve our process so that as we inherited a great system of government, we can pass on to future British Columbians an improved system of government.

The members who serve in this great hall are a unique group of 79 individuals. They put their names on a ballot to serve all British Columbians, and I have never witnessed any one of them waver or meander from their commitment to make British Columbia a

better place. The lights that burn brightly late at night in the offices of this institution are the lights of hope for all British Columbians and for future generations of this province. When I say the lights are burning late at night, it is in the real sense and not a metaphor.

I wish to comment briefly on committee work and the work at the capital. This member has the deepest respect and admiration for each and every member of this great hall. Many members barely return home to their families and loved ones, only to turn around and return to the capital city. Many of my colleagues have travelled to 18 cities in 23 days, on aircraft without washrooms or heating, to parts of the province where snow is neck-deep. I've never heard one of them complain.

These members are dedicated to champion the causes they so deeply cherish. The workload is immense for all members, from constituency matters to government caucus committee work and parliamentary select standing committees in addition to House duty. Perhaps the most taxing is caucus meetings, which I, fortunately, do not have to attend. Some last up to 12 hours straight. I can even recall one going on for 14 hours. One might ask: why such long meetings?

The answer is quite simple and straightforward. It is in those meetings that weighty decisions are made — often keeping members up at night, in fact, on the tough choices that must be made, poring over and pondering over which values will take precedence over other values. It's a task not suited for the fainthearted. There is no joy. There is no laughing or glee. There's simply grave concern for the monumental decisions that confront our lawmakers.

Any member or person who suggests there's glee taken in the decisions made in this hall or in caucus is engaging in pure fantasy and folly and is misguiding British Columbians. Leadership calls for making tough decisions. British Columbians know this and would lose respect for a government that simply recoiled at the first sign of dissent or protesters on the front lawn of this institution.

Health care costs in this province are astronomical and runaway. Unless the government takes strident moves, our cherished health care system is in peril. An innovative approach is required expeditiously. We are at a crossroads in this province, facing rising health care costs, a deteriorating infrastructure and not enough seats in our post-secondary institutions. However, the thirty-seventh parliamentary session is a beacon of hope that by working together, we will improve our health care system, open more seats at post-secondary institutions and improve the province's health care infrastructure.

There are bogeymen and naysayers out there, who sit in their armchairs pontificating that government should not make any cuts. Common sense tells us that if we continue along the path we have been going down, the government programs that are necessary — such as health care — will not be sustainable.

We live in one of the finest vistas in the world. We're renowned for its beauty and for the cultural diversity that is reflected in this hall. We have eight Indo-Canadian members and three Chinese Canadians. This is a remarkable achievement and is a reflection of the spirit of British Columbians and the kaleidoscope of the world community.

J. Nuraney: I rise today to make reference to the throne speech made in this House by our Lieutenant-Governor. It is through this enunciation that the government declares its direction and agenda for this session of the House. A broad picture is painted of the tasks ahead, and it also outlines the underlying intentions.

This is my second occasion to speak to the Lieutenant-Governor's throne speech, and I feel very fortunate that I have been a part of this government, which launched its effort after being elected into office on May 16, 2001. It was then said that this is a time of great promise for all British Columbians, led by a new government with a strong mandate for positive change, a mandate to usher in a new era of hope, prosperity and public service. Fulfilling this mandate won't be easy. "It will take fortitude, it will take resolve, and it will take tenacity." These words were uttered in the throne speech on July 24 of the year 2001.

It has indeed been a period of enormous challenges. It has not been easy, and it has taken wise insight and resolve to implement the program and the direction we had set ourselves out to achieve. Tough decisions had to be made to bring sanity into fiscal management. Programs, services and funding needed to be reviewed and more focus brought to bear on the viability and sustainability of what government could offer.

Even though health care and education budgets were protected, there were inherent structural problems that had to be addressed. A fresh approach to the delivery of these services was necessary, and changes were made. It is always difficult to change the status quo, which invariably meets with resistance.

The directives for achieving a balanced budget in four years were put in place. All ministers and their staff committed themselves to this new direction. Promises that were made in the New Era document have been almost delivered upon.

As the wheels were set in motion, the effects of our measures began to show results. The Minister of Human Resources reported significant reduction in the number of people receiving assistance. Approximately 80,000 jobs were reported to have been created.

The shift in the direction taken by the Minister of Children and Family Development met with overwhelming approval from all community members. Economic indicators began to move favourably. Housing starts, retail sales and exploration investments began to move upwards. In Burnaby itself, the construction of housing units increased from 786 in 2000 to an anticipated 2,590 in 2003.

The major shift by this government was in the matter of decision-making. The restructuring in health and education depoliticized the process of making deci-

sions. Health authorities and school boards were made more autonomous and were given the flexibility of resource distribution. The tuition freeze was removed from universities and colleges, and they were able to manage their affairs in a more economical and businesslike manner while meeting the needs of their students.

On a previous occasion I spoke about the diversity in my riding of Burnaby-Willingdon. Apart from the large demographic diversity, we also have a good and well-planned mix of residential, commercial and industrial developments. Burnaby has become a home to many high-tech companies and also of late has become a site for the growing film industry. It is evident from the activities of the board of trade in Burnaby that there is buoyancy in the commercial activities and a great sense of optimism among its members.

One can go to Metrotown mall just to witness the flurry of activities and also witness the diversity of our community. It is estimated that over 40 percent of Burnaby residents are a visible minority. This certainly is reflective of the increasing demographic change that is taking place in our province. We must be aware of this reality and take this into account as we move towards creating opportunity for all.

In order for us to move forward to meet the challenges of tomorrow, we must enable our institutions of higher learning to have the ability to prepare students to meet the demands of the job market. We in Burnaby are very fortunate to have two excellent institutions of higher learning. We have Simon Fraser University and the British Columbia Institute of Technology.

SFU has attained a level of excellence which is the envy of Canada. It has also been chosen as the site for the speed skating competition for the 2010 Olympics. Another very exciting development that is taking place at the university is a university village that will, in the course of the next 25 years, change Simon Fraser University from a commuter campus into a university town with a full-time population of 10,000 people. It will make SFU a more vibrant place while at the same time making the university a more integral part of Burnaby. Under the leadership of president Michael Stevenson, this university continues to flourish and serve the residents of Burnaby, the province, the country and indeed the world.

BCIT, the other institution of higher learning, is unique and has the ability to tailor its programs to the economic and the resource needs of our business and industrial communities. The institution accommodates over 15,000 full-time students and over 34,000 part-time students. It is a college that has, under the government, recently acquired the status of a polytechnic.

Our new direction, through the good offices of the Minister of Advanced Education, has enabled the institution to move from being micromanaged to a more independent model of governance. Mr. Tony Knowles, the highly respected president of this institution, recently said to me that the last two years that he has worked under this government have been his best years ever in his career, thanks to the new direction and the vision of this government.

The block-funding formula now allows the administration to allocate funds in the most beneficial way. In keeping with our New Era document and its commitment, there has been a significant increase in the spaces offered in the nursing and computer systems degree programs. By the year 2004-05 there will be an increase in nursing seats from a current 80 to 417. In that same period, the computer systems seats will increase from a current 53 to 115. As BCIT achieves and attains new standards and strengths, I will be working closely with the ministry and the administration to promote and enhance this very admirable institution.

Another very worthy institution in my riding is the Burnaby Hospital. I, in cooperation with my colleagues from Burnaby, was successful in assuring the residents of Burnaby that there was no fear of our health centre being closed. This hospital not only retains its full service but has also taken on more palliative and psychiatric services. I am very proud of the administrator, the doctors, the nurses and the support staff of this hospital for maintaining very high standards.

Burnaby is also not immune to the vice of poverty. In the last decade we have witnessed an increasing number of people who are marginalized. I will repeat what I had mentioned in my last response to the Speech from the Throne, because I consider this to be very important. As we move ahead towards fulfilling the agenda of our government, let us not forget that we are not acting in isolation. Our actions impact all British Columbians. It is therefore important to remember that the balanced approach is as important as a balanced budget.

Whenever I can, I try to assist our social agencies in Burnaby in meeting their daunting challenges. Many excellent and caring volunteers and workers help centres like the Maywood Community School and the South Burnaby Neighbourhood House. Poverty can only be tackled in a holistic and comprehensive manner when society makes an effort to complement government endeavours. It will be my continued responsibility to help and assist in this regard.

Now I would like to turn to the more important initiatives outlined in the throne speech. There is no denying the fact that we live in one of the most beautiful and resourceful provinces. There are immense opportunities in the areas of mining, oil and gas exploration, forestry and tourism. Our government has recognized the potential. The approach we are taking in creating partnerships among various groups to create opportunities for all is the best plan.

Partnerships with the first nations are, in my opinion, the best news of all. It is acknowledged that peoples of the first nations for many years have been ignored to a level of disbelief. I was brought up in a colonial environment, and I understand, somewhat, the pain and hurt suffered by those in this country.

Our government, in recognizing the injustices of the past, has made a statement of respect and reconciliation.

This is a good beginning. It is now time that we close the doors of the tainted past and move ahead in true partnership. It is my belief that for the first time in the history of our province, the government has expressed a sincere and genuine desire to help find economic independence for our first nations people.

The treaty negotiations have taken an inordinate amount of time with virtually no result. We have to move beyond these complex matters and begin the task of healing and offering support in the most-needed areas of education and health. We have accepted the realities of ownership and are seeking true partnership in various fields of endeavour. It is my fervent hope that the leaders and chiefs of different nations will recognize this opportunity and resolve to join hands with us to march ahead to better times.

Our government's announcement of the heartlands economic strategy is a very bold and unprecedented initiative. In order for us to realize the full potential of our province, we must include the development of the whole of British Columbia and not just the urban areas. It is therefore important that we invest in the transportation infrastructure. Roads, tunnels, bridges, railways and airports are lifelines of economic development. We must seek avenues of funding for this very important investment.

Revitalization of our forest industry is another aspect of our economy that needs our attention. The dispute with the United States with regard to the softwood lumber has resulted in devastating results in some communities. It is essential for us to re-examine this industry and adapt to modern needs. Legislation that will be introduced in this session will create a working forest land base. These contemplated reforms will move towards diversifying the tenure and the market-based stumpage that is regionally sensitive and socially responsible — a move in the right direction.

In the area of health care, a Fair Pharmacare plan has been introduced. Some 280,000 low-income families will pay less than they did before. For the first time, young families with lower incomes will be supported in their drug costs — another move in the right direction.

Discussions and dialogue will commence to find better ways to deal with crime, the needs of seniors and challenges facing our youth. Our government has successfully re-established a good working relationship with the federal government. This partnership will enable us to advance our bid for the 2010 Olympics, which undoubtedly will be of immense benefit to the whole of our province — a move, once again, in the right direction.

As we move into this session to deal with these issues, I am very confident that our efforts to bring prosperity back to our province will bear fruit. We will be closer to fulfilling our mandate. I am continuously hearing from my constituents to ask our government to stay the course. We are going in the right direction. I thank you for allowing me the opportunity to respond to the throne speech.

In addition to providing transcripts on the Internet, Hansard Services publishes transcripts in print and broadcasts Chamber debates on television.

	YEAS — 56

Coell	Hogg	Hawkins
Whittred	Cheema	Hansen
J. Reid	Bruce	Santori
van Dongen	Barisoff	Wilson
Lee	Thorpe	Murray
Collins	de Jong	Nebbeling
Stephens	Neufeld	Coleman
Chong	Penner	Jarvis
Anderson	Orr	Harris
Nuraney	Brenzinger	Belsey
Bell	Chutter	Mayencourt
Trumper	Johnston	Bennett
R. Stewart	Christensen	Krueger
Bray	Les	Locke
Bhullar	Wong	Bloy
Suffredine	MacKay	Cobb
K. Stewart	Brice	Sultan
Hamilton	Hawes	Kerr
Manhas		Hunter

	NAYS — 3

Nettleton	MacPhail	Kwan

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY