Hansard -- Tuesday, April 29, 2003 p.m. -- Vol. 14, No. 11 (HTML)



CONTENTS

	Routine Proceedings
		Page

Introductions by Members		6323

Statements (Standing Order 25b)		6323
	Greenspace conservation in urban areas S. Brice All-terrain vehicles B. Bennett Anniversary of discovery of DNA K. Manhas

Oral Questions		6324
	Fair Pharmacare registration J. MacPhail Hon. C. Hansen Northern medical school community action group P. Bell Hon. C. Hansen Rural Communities Summit P. Nettleton Hon. G. Plant Hon. G. Collins Death of Frank Joseph Paul T. Bhullar Hon. R. Coleman Fair Pharmacare registration J. MacPhail Hon. C. Hansen Legislation on collective agreements B. Belsey Hon. G. Bruce

Petitions		6327
	J. MacPhail

Second Reading of Bills		6328
	Community Charter (Bill 14) (continued) J. MacPhail Hon. T. Nebbeling

Committee of Supply		6335
	Estimates: Ministry of Advanced Education (continued) J. MacPhail Hon. S. Bond

Second Reading of Bills		6342
	Forests Statutes Amendment Act, 2003 (Bill 27) Hon. M. de Jong J. MacPhail P. Bell Forest (Revitalization) Amendment Act, 2003 (Bill 29) Hon. M. de Jong

Hon. G. Halsey-Brandt: Today in the members' gallery I would like to acknowledge some special visitors from Hungary. Please join me in welcoming His Excellency Dénes Tomaj, the newly appointed Ambassador of Hungary to Canada, and his wife, Ildikó Tomaj. They are accompanied by André Molnar, the honorary consul general of Hungary at Vancouver.

This is the ambassador's first official visit to British Columbia, and I'm pleased he has travelled here to discover the many opportunities of our beautiful province. Would the House please make them feel welcome.

Hon. G. Collins: On behalf of the Premier, I want to make some introductions today.

It is now 58 years since the Nazi concentration camps were liberated throughout Europe, the aftermath of an incomprehensible time in world history. Approximately six million people, including 1.5 million children, died in those internment camps or in their towns, villages, cities, farms and forests.

Today I am pleased to stand up in this House to re-cognize Holocaust Memorial Day and to recognize the many survivors who are here with us in the galleries today and many others who are also survivors — their friends and their families. How can any of us actually understand what these people went through or what they go through each and every day of their lives? The memories, the nightmares, the losses and the sadness? We cannot begin to. What we can do is commend them, praise them, welcome and respect their stories.

Yom HaShoah, or Holocaust Memorial Day, is a day set aside to remember. Its observances are evolving around the world, and it's a day to deepen our understanding about the tragedy of those times. Many Jewish communities are hosting ceremonies today for communal reflection and prayer. Attendance at those events is increasing yearly as more and more survivors are coming out and sharing in the memorials and telling their stories and helping with the healing process. The terrible shadow of the holocaust is a constant companion to survivors, their families and their friends. It's also a terrible shadow on the family and friends of those who did not survive the terrible horror of those days.

Once again I want to welcome our special guests in the galleries today and commend the Canadian Jewish Congress — particularly Robbie Waisman, a survivor and president of the Vancouver Holocaust Society; and vice-president Rita Akselrod, also a survivor — for their leadership and help in making this memorial day happen.

D. MacKay: In the gallery this afternoon, visiting from the city of Terrace, is my good friend and campaign manager, Derek Curtis. I would ask the House to please make him welcome.

R. Stewart: Visiting us today from Coquitlam are two members of la Société d'éducation Gareau, which is effectively the parents advisory committee for l'École de Pionniers de Maillardville. Would the House please welcome Carole Helter and Lucie Poulin.

Hon. C. Clark: On behalf of my colleague from Surrey-Tynehead, I would like to make very welcome today the students of Pacific Academy in Surrey, who are joining us to learn a little bit about how the legislative process works. I hope when members see them in the hallway, they'll give them a big welcome.

H. Long: I'm very proud today to rise in this House and announce the birth of my fourteenth grandchild to my daughter, Kathleen, and her husband, Al. Hayley Ann Marie Zaalberg was born on April 22 at 8:21 p.m. here in Victoria. As I said, it's my fourteenth grandchild, and I'm really proud of it. I would like to ask this House to join with me in welcoming her to British Columbia and to the world. I wish her the best.

Hon. L. Reid: On behalf of my hon. colleague the member for Surrey–White Rock, I'm pleased to present to this House individuals in the gallery from the White Rock Rotary Club, John Morfitt and Don Boyce, and visiting the White Rock Rotary Club from the Argentine Rotary Club are Luis Busso, Eugenia Ossana, Pablo Naldini, Alejandro Fara and Maria Francioni.

In addition, a third introduction. Students from the Jewish Day School in the riding of Richmond East are in the precincts today, and I would ask the House to please make them very welcome.

S. Brice: Recently I attended the opening ceremonies of the Horticulture Centre of the Pacific's new conservation park trails in my riding of Saanich South. The development of these trails was funded by the province. This project replicates the spirit of early visionaries who made a conscious effort to protect green space in the cities at the turn of century. Those early nineteenth-century planners had the foresight to imagine the future and to treasure parks within urban centres.

When Sir James Douglas set aside 103 acres in 1858 for Beacon Hill Park or Vancouver city council made a proposal to the federal government in 1886 to create Stanley Park, they saw well beyond their own mandates, their careers and even beyond the generation of their grandchildren. So, too, does our government

support initiatives like the conservation park that look beyond the present and towards the future of B.C. and the generations to come.

This project seeks to ecologically rehabilitate and preserve 70 percent of the site. The plan strikes a balance between conservation and recreation through a carefully planned trail and viewing station system. The exciting component of the horticultural centre plan is the decision to use 20 percent of the land base for income-generating activities. The plan includes agroforestry in a manner that sustains the environment and also generates enough income to maintain the park in the years ahead.

Projects such as these look well into the future and anticipate a province that will grow and flourish. Like our nineteenth-century predecessors, our government looks beyond our own legislated mandate. In the protection of green space, we look forward and plan for the next generation of B.C. citizens who will benefit from these peaceful places when urban development spreads into today's suburbs. I am proud to be part of a government that sees beyond the immediate horizon and proud to welcome projects such as the conservation park and its new trails to Saanich South.

B. Bennett: Today I'm offering a brief argument in favour of registration and licensing of all-terrain vehicles. Many British Columbians use an ATV to get a little further into the mountains to do their sightseeing, their hunting and fishing and camping and berry picking, and more and more of our aging tourists want to view our beautiful province from an ATV. I support this type of tourism, and I support this type of recreation by taxpaying British Columbians. Used respectfully, the ATV is a wonderful amenity for thousands of British Columbians.

I do want to make it clear here today that registration must be not used to unnecessarily restrict ATV use, but there are some good public policy reasons for registering and licensing ATVs:

(1) ATV riders wear helmets and visors. The very few who destroy rangeland and commercial crops cannot be identified without a licence plate.

(2) The collection of sales tax at the mandatory point of registration would allow government to collect tax not only on every out-of-province ATV purchase but on every in-province ATV transfer.

(3) Registration would allow ATV dealers to verify ownership on trade-ins and would help protect ATV owners against theft.

(4) Identification of the few renegade ATV users would allow us to protect our dwindling natural grasslands in B.C., where many of B.C.'s endangered species of flora and fauna exist.

(5) Registering and licensing ATVs could facilitate the collection of a user fee that could then be targeted through the B.C. ATV Association to trail development, trail maintenance and education.

Conservationists, environmentalists, the agricultural industry, regional districts across B.C. and the provincial ATV association all want ATVs registered and licensed. For all of the above reasons, I suggest that the province should work with ATV owners to register and license their ATVs.

K. Manhas: I rise today to mark an important occasion whose significance is growing day by day. I'd like to join Genome British Columbia and organizations from around the world in celebrating the fiftieth anniversary of the discovery of DNA and the double helix structure.

Fifty years ago the phrase double helix entered our vocabulary and expanded our horizons. The discovery of DNA by James Watson and Frances Crick was hailed as a watershed in the history of science. It is doubtful that anyone could have predicted the transformation it would unleash on biology, on medicine and on our understanding of life itself. Fewer still would have predicted that it would give rise to a whole new branch of science: biotechnology. Today every child learns about the twisting ladder of DNA. Open the newspaper almost any day, and you're sure to read about the important breakthroughs in DNA research.

The late Dr. Michael Smith, a UBC professor and Nobel laureate, was a key figure in the advance of gene research, and gene research in B.C. today is at the forefront of the world. Recently the Michael Smith Genome Sciences Centre was the first lab in the world to crack the genetic code for the virus thought to cause SARS. With this genetic blueprint in hand, researchers are working around the clock on a diagnostic test for the disease. This will speed up diagnosis and save lives.

In the five decades since the discovery of the double helix, science has made enormous strides and gained incredible insights. Today scientists building on the foundation laid by Watson and Crick are close to knowing how immunity to infectious diseases works, how we can grow hardier and more productive crops, how we can make forests resistant to new diseases and even how we can tap into new clean energy sources.

Fifty years is short in the sweep of time, but we have travelled a long way in the last half-century in our knowledge about the genetic workings of our world.

As we look forward to what might be in store in the next 50 years, we would do well to remember that it all began with the discovery of the double helix, a twisting staircase that has led us upward in our understanding of life and to greater heights of what is possible in our world.

J. MacPhail: In trying to calm fears about the botched Pharmacare registration system, the Minister

of Health Services is only creating more confusion. If you listen to the minister, you would think that the confusion is all part of a deliberate misinformation campaign. But the only misinformation is coming directly out of this minister's mouth.

He spent more than a million on an advertising campaign that told British Columbians his new scheme starts on May 1 and if people want benefits, they should register immediately. Then, with only two weeks left until the deadline, he quietly puts out a release that says: "Oops, there is no deadline." And now he wonders why lines are jammed and people are confused.

Can the minister explain why his more-than-a-million-dollar advertising campaign extolling the virtues of cutting benefits to seniors never bothered to tell those same people that in fact there is no deadline for registration?

Hon. C. Hansen: Actually, the advertising campaign that was undertaken has been very effective. As I mentioned yesterday, about 440,000 B.C. families have benefited from financial assistance under plans A and E on the old Pharmacare plan. Already, to date we have about 900,000 B.C. families registered. Our analysis shows that those individuals who will be able to benefit from the new Fair Pharmacare program from day one on May 1 are, by and large, already registered and signed up. We're certainly going to take every effort to make sure those few remaining families that will get benefits effective on May 1 are entitled to their benefits, even if that means paying them retroactively.

J. MacPhail: It's always interesting how this minister has fun with math. I guess everybody is flooding…. All those that aren't registered are flooding all of our offices….

Mr. Speaker: Order, please. Order. Order, please. Hon. members, let us hear the questions and the answers, please.

J. MacPhail: They must be calling to all of our offices. But British Columbians shouldn't need a decoder ring to figure out what the minister's intent is.

Yesterday, in response to my question about the two-stage registration process, the minister insisted that as soon as a person makes contact via phone or Internet, they are registered and have nothing to worry about. That is not true.

According to the information from the minister's own website this morning…. Here's what that website says: "If a person fails to return their consent form within 30 days, they lose their Pharmacare coverage." That was this morning from the very website this minister refers everyone to. That directly contradicts what the minister said yesterday.

Will the minister now confirm, as a result of what he told the House yesterday, that the 30-day rule for returning their consent form is now null and void? Would he like to flip-flop again, and is he going to change the information he's providing British Columbians on his website? Or do British Columbians have to start reading Hansard to keep track of these ever-changing rules?

Hon. C. Hansen: I can remember that when we first announced the Fair Pharmacare program, I offered the Leader of the Opposition a full briefing on it. I think that if she had taken me up on that at the time, she would not be as confused as she seems to be as this process has unfolded.

What I said yesterday was that the moment an individual registers their family, either via telephone on the 1-800 number or via the website, they are entitled to benefits automatically and instantly, and that the second phase of that process is the consent form. That is exactly what I said yesterday. The second phase is that they do sign the consent form, which allows us to verify the information that the individual has provided either via the telephone lines or on the website. They are eligible for benefits from the day they are registered, whether that's via telephone or via website.

J. MacPhail: Well, despite what the minister tries to tell people, his story changes daily — absolutely daily. First of all, there is a deadline; then there isn't. You must return your consent form or get cut off, according to his website, or it turns out, as the minister says, a consent form is just a formality.

J. MacPhail: If you don't register, you lose your benefits. Then yesterday the minister says that you'll be reimbursed for everything you may have overpaid at the end of the year. Clearly, the minister has some work to do to get his story straight and get it through to the public.

Can the minister tell us if British Columbians will have to apply to Pharmacare to get reimbursed at the end of the year, or will he be sending those cheques out automatically? Will he agree to clear up the confusion that he's created, that his website has created? Will he delay implementation of his income-testing scheme until June 1 and use that time that is so much needed by him, which so many say, to clear up all the confusion around eligibility and registration and how it's all supposed to work?

Hon. C. Hansen: First of all, everything that I have said on this file has been 100 percent consistent, and I

challenge that member to show me any evidence of anything I have said that is not consistent.

Hon. C. Hansen: Her understanding of this particular file has clearly taken some flip-flops, which could have been avoided if she had taken the briefing in the first place.

To answer her first specific question: yes, the reimbursement will be automatic. They will not have to apply for that.

To answer her second question: no, we will not delay the implementation of Fair Pharmacare, and I'll tell that member why. It's because 280,000 British Columbia families are in fact going to get more financial assistance under the new program.

Hon. C. Hansen: Young, low-income families today who are facing deductibles of $800 a year are going to see more financial assistance, so that the costs of pharmacy bills to them and their young families are going to come down. That is going to bring more fairness to low-income seniors and to low-income British Columbians. No, we will not delay bringing fairness to those British Columbians.

P. Bell: Certainly, improving health care is a huge issue for myself and, I know, for the member for Prince George–Mount Robson and, in fact, for all of my northern caucus colleagues. I know the minister has taken a number of very positive steps lately to help us improve our health care indicators in the north, and some of the improvements are really exciting.

One of the measures that he announced fairly recently was the establishment of a committee or a working group that was going to look at the regional needs and establish specific strategies for improvement. Can the Minister of Health Services give us an update on the status of the committee, when the membership will be announced and when it will start meeting?

Hon. C. Hansen: This is a great news story that's unfolding across the northern part of British Columbia — the expansion of the medical school to Prince George, which will become operational in September of next year, with 24 medical students being located at UNBC. It is great news not just for Prince George but for all northern communities.

I'm pleased to advise the member that the northern medical school community action group will be, in fact, formalized this afternoon. I'm very pleased that the mayor of Prince George, Colin Kinsley, has agreed to chair that group. We're going to make sure that there is good local input not just from Prince George but from all of the communities of the north to make sure that that northern medical school is up and operational and starts to meet the needs of northern communities as soon as possible. Thanks very much.

P. Nettleton: Through the process of elimination, I have a question for the Attorney General, please. I would like to draw the minister's attention, if I may, to an upcoming conference, the Rural Communities Summit, to be held June 19 to 21 of this year in Clearwater, British Columbia. The guest of honour is the Hon. Iona Campagnolo, the keynote speaker is David Baxter of the Urban Futures Institute, and the opening speaker is Chief Nathan Matthew of the North Thompson Indian band. The agenda includes bridging gaps between native and non-native business and labour, the sharing of natural resources and beginning a dialogue around rural capabilities. The intended audience is rural communities of 10,000 and under. My question is: is this conference something that the government is encouraging caucus members to attend?

Hon. G. Plant: If the member wants to give me a copy of the information he's referring to, I'll be happy to look at it and see if there's an answer I can give him.

Mr. Speaker: The member for Prince George–Omineca has a supplementary. Hon. member, I would ask if you could just speak up a little. We're having trouble hearing you.

P. Nettleton: For the information of the minister and this House. With respect to this conference, perhaps the minister or someone on the government side can explain to me the purpose of an internal e-mail from the office of the party Whip, Kevin Krueger, to government caucus members, which reads: "Kevin Krueger has requested members do not register for the Rural Communities Summit. If you have any questions, please call me directly." Comment, please.

Hon. G. Collins: I stand to be corrected, but my understanding is that the reason for that e-mail is that there is a different registration form that's been directed towards MLAs. That's why members were advised not to double-register for the conference. But I expect there'll be a good attendance by members from, hopefully, both sides of the House.

T. Bhullar: It was approximately one year ago that I stood in this chamber and asked the Solicitor General about a homeless person who died under mysterious circumstances while in the custody of the police —

namely, Frank Joseph Paul. Can the Solicitor General please advise this House if the case of the deceased, Frank Joseph Paul, has been reopened?

Hon. R. Coleman: This member brought this to my attention yesterday, and not to my knowledge has the case been reopened. We had a coroner's inquiry with regard to the case, and also a report to Crown counsel was dealt with. There were two members of the police department who were disciplined over the incident. Since that time, there have been a number of recommendations that came out of the coroner's inquiry. Those have been added to the risk assessment audits for police departments by the director of police services, and now when we audit police departments, we audit including those recommendations that came out of that particular report.

J. MacPhail: Well, today is the day for e-mail exchanges. In an e-mail exchange this morning, here's how one British Columbian responds to the suggestion that people can register for Pharmacare on line: "This sounds like a great idea until you try to get the data entered on line. The system is so jammed up that the website cannot handle the traffic. I tried for an hour and a half this morning to enter one form. Calling or faxing is no better."

Now, the author of that e-mail is a Janet Kluston, the constituency assistant to the Minister of Early Childhood Development. To the Minister of Health Services: how can he expect ordinary British Columbians to have any patience with this botched registration process when even Liberal staffers say the system is a mess? This government says I'm a fearmonger. So is Ms. Kluston just fearmongering in a deliberate attempt to spread misinformation to make the minister look bad? And if so, what's he going to do about that?

Hon. C. Hansen: Clearly, over the weekend the system did have some challenges because there were an enormous number of people that were trying to get access to the system. They have expanded the capacity, both in terms of the Web servers and in terms of the ability to field telephone registrations. We can register 800 people an hour on the telephone system, and 700 people at a time can register using the on-line registration system.

I've had some great feedback. In fact, I had great feedback just earlier today from an individual who used the on-line registration system and said it was fabulous. Certainly, some individuals may need to try again if they're trying at a particularly high-volume time of the day. But as we get into the evenings, it's open till 10 o'clock at night. Late afternoon is usually the better time to try.

B. Belsey: I have a publicly written question submitted by the Prince Rupert District Teachers Union. The question is to the Minister of Skills Development and Labour. Now that the Geneva-based International Labour Organization has concluded that six laws enacted by the Legislative Assembly violated international covenants, will the government repeal Bill 18, Skills Development and Labour Statutes Amendment Act, 2001, and repeal legislation that imposed settlements, forced an end to job action and altered contracts?

Hon. G. Bruce: In reading the report by the ILO, it said a number of things. I think it's probably important that we deal with them in an individual sense, actually. In regard to education, the ILO had said education ought not to be an essential service except for minimal service. However, in my meeting just recently with the BCTF and other people within the education profession, the impact that teachers have on young people and the necessity for good education for our young people…. Clearly, in those discussions I think anyone would understand the necessity for it to be an essential element in our society.

When they talked about an independent committee looking at the collective agreement process for bargaining for the BCTF.… I've already met and begun a process with the BCTF, the Principals and Vice-Principals Association, the school teachers association to see whether or not there is a different process that could be utilized so that we could reach negotiated settlements.

Clearly, regardless of political party in this province…. In fact, if you go across this country, if you go throughout North America — indeed almost around the world — this particular element of our society has had a very difficult time in finding a way to negotiate a collective agreement. I'm hopeful that with the interest that's already been expressed by the parties I've spoken with, we might be the first in the areas to come up with a process that would find that the teachers and the government could come to a negotiated settlement.

Finally, and more importantly in all of this which came out from the ILO, this government in British Columbia made it very, very clear in regard to education and in regard to health care. We have said that our first priority in all we do in these two fields would be to put patients first and to put students first. That, indeed, is what we have done.

J. MacPhail: I rise to table a third petition, signed by 3,876 people. They're calling upon the government to rescind all cuts to Pharmacare, make public all hear-

ings related to the broader review of Pharmacare and ensure that seniors are included in the process.

Hon. G. Collins: I call second reading continued debate on the Community Charter.

J. MacPhail: I was in Committee A debating the estimates of the Minister of Advanced Education this morning. I did have a chance, though, to go on line to review the debate from this morning. My comments are reflective not only of what it is that the opposition wants to say but what was debated this morning as well.

By the way, Mr. Speaker, seeing as how I've referred to Hansard, I want to take the opportunity to congratulate you and your office on what I think is a world-class Hansard system now. The fact that I can go on line at noon is truly wonderful. Congratulations to you and to Hansard Services.

In addressing the Community Charter legislation, let me begin by saying that virtually everyone is in favour of empowering municipalities. It's almost motherhood — parenthood. However, once we get beyond that, this legislation does cause the opposition some concern.

Let's call this legislation what it is. This was a pet project promised by the Premier many years ago. However, it continues to be, as many have said to the government — not in this chamber, but to the government — that the community charter is a double-edged sword for local governments. After promising a new community charter within the government's first 90 days in office, here we are — two years after the government was elected — examining the Community Charter today. This is what the government has come up with.

Some may say: "Who cares about another broken promise by this government? There are so many." There are riches out there of broken promises. What is significant is not only that the government broke its promise but also what they've now offered to communities, to local governments and to citizens. This Community Charter does not in any way do what was promised. While we've had to wait two years, even now the Community Charter that we're debating today falls far short of the promises that were made by the Liberal MLAs and by the Premier himself, year after year, to local governments.

The end result of the direction charted by this government with this Community Charter is downloading to local councils and to regional districts without the power to raise revenue. That's all we know so far. This legislation has little to say on the issue of local taxing powers. It's no secret. They can't yell over there that I'm fearmongering, because the minister himself has admitted to this. He seems to think that's just fine. Well, I don't. Its absence creates a huge hole in what anybody could possibly say is good news by the tabling of this Community Charter.

The Community Charter recognizes the municipal need for adequate powers and discretion to meet existing and future community need. Good. It commits that before new responsibilities are assigned to a municipality, there must be provision for resources required to fulfil the responsibility.

Again, that raises far more questions than are answered by this legislation. How is that possibly to be achieved by local communities as they assume new responsibilities, when there is actually no discussion whatsoever on revenue raising or resource gathering for local governments?

This Community Charter — no question about it — is a move toward an American style of municipal governance, and with that move, it carries an inherent financial risk. Now, the Community Charter will no doubt change the way that municipalities operate. There are challenges in that provincial standards may not be met and that there is an ability for local governments to opt out of provincial standards that have been a stalwart of this province for years. I have heard from all around the province real concerns about that, because many local governments believe that it will lead or could lead to regional balkanization.

This is a government that claims to stand up every day and care deeply about the interior, the north and the Island. It's what they call the heartlands. And don't forget the "s," because, as I'm told, there's more than one heartland. It's an American-style word, and it now deals with an American-style piece of legislation, the Community Charter.

There's no doubt that a 90-day pledge turning into a two-year charade is very suspect, and it's suspect given that this charter is really substantively a repackaging of amendments to the Local Government Act by the previous government over several years. There was a lot of work — a lot of work — done by the previous government to change, top to bottom, the Local Government Act. It was done in a methodical, consultative, inclusive way, and I have heard from many at the local government level saying: "Well, what's new with this Community Charter?" We were promised something new, and the substance of the Community Charter merely reflects all of the hard work done by local governments, the Union of B.C. Municipalities and the previous government. Everything that was promised for change is absent from this Community Charter.

Maybe that's because the changes made in an inclusive, consultative, open, transparent way to the Local

Government Act throughout the 1990s met the needs of local governments. Maybe what this Community Charter, then, is all about is having to meet the dire needs of this Liberal provincial government as they sink ever further into a fiscal morass and need to download services onto local and regional governments. I would say, given the absence of any substance around the ability to raise revenue, that this charter is in large part a glorified housekeeping bill trumpeting the gains in autonomy that were really achieved by local government in the 1990s.

However, the charter is now unveiled in the new era of relentless and reckless downloading. Communities are seeing fewer provincial services and government functions in their locale and locales across the province. Again, Mr. Speaker, it's not just me that hears this tale of real woe of relentless downloading. As part of the legislative committee to do prebudget consultations in the fall, ten Liberal MLAs and I heard that all around the province from local government officials — that downloading was relentless and reckless.

The government, in its desire to cut red tape, has missed the mark — it missed the mark completely — and in this legislation, they've cut the red seal for trade apprenticeship. They're not dealing with red tape at the local government level. Instead, they're doing things like silly regulation changes, cutting the red seal for trade apprenticeship. That is where one can get trained and certified as a journeyperson, and the red seal is given. You're recognized all across Canada for your journeyperson's seal.

This government cut that. They haven't cut any red tape in the Community Charter. They've done nothing about the leaky-condo disaster, either through this or any other action this government has taken. In fact, the secret government caucus committee examining the leaky-condo crisis in this province has yet to report out. I'm sure they have yet to report out, because this government won't do anything about it even after the government caucus committee is forced to admit to the crisis. I would submit that this charter could further exacerbate municipal liability for inspections and claims from shoddy workmanship. In harming the apprenticeship program and doing nothing about leaky condos, combined with the introduction of this charter, municipalities are at greater risk for greater liability when shoddy workmanship occurs in the construction industry.

There is confusion resulting from the phased introduction of the charter. The government freely admits that it's a two-step process. Now, we didn't hear anything about that in the New Era document. We didn't hear anything while these MLAs were out campaigning on the election trail. We certainly didn't hear anything about that in the first 90 days, when this promise was supposed to be delivered. But now we're told it's a two-step process. Well, that's confusing.

I would submit that the public deserves to know what future community charter legislation will contain. I examined it very carefully in the debate and could find none of the information about what the next shoe to drop will be. Many suspect that the regional districts will be adversely affected in the autumn legislation. Regional growth strategies, regional utilities, regional parks and environmental services, including a whole host of downloaded inspection work, may be jeopardized by the legislation in the autumn. Yet here we are passing the Community Charter, not knowing at all what the next shoe to drop will mean for local governments.

Of course, there was a lack of representation from both labour representatives and business representatives in putting together this legislation. Now, usually this government just shuts out labour organizations — working people's representatives. This government loves to shut out working people's representatives, but they also shut out business representatives in this consultation as well, which is a new low for this government.

There's no doubt that there is going to be a downloading onto municipalities regardless of what the Liberal position was when they were in opposition. When they were in opposition and even now, they say every day that there will be no downloading onto municipalities. But again, as is always the case with this Liberal government — whether they're telling how Pharmacare isn't going to be what it's going to be or whether we're talking about the Community Charter — you have to read very carefully between every syllable of every word — not just between the lines, but between every syllable of what this Liberal government promises now, of what their shifting promises are.

Of course, in opposition the Liberals said there would be no downloading. Then the next step was, as soon as they got into government: "Well, if we get out of the business of providing services, that isn't downloading; that's just getting out of the business of services." If it's a service required and necessary for the well-being of the community, this Liberal government abandons that service but then claims it's not downloading.

The Community Charter shifts from broad corporate powers to natural person powers. I will be discussing that much more at committee stage — the implications for that shift. The charter allows municipalities to offer any service by almost any means they want. But as I've already stated, it paves the way for the province to abandon services, leaving it up to increasingly cash-strapped local governments to decide if they want to fill that void. Just like the Minister of Education takes no responsibility for her cuts to school boards — and in fact goes and pokes her finger in the eye of school board trustees, saying, "You've got all the tools available to provide educational services," and refuses to acknowledge that she's severely tied their hands behind their back by her cuts in funding — the same thing has happened in this Community Charter. The government says: "Oh no, we're not downloading. We're abandoning you, and it's up to you to pick up the slack."

Who's going to get all the heat from the local citizens? It's going to be the local governments now.

They're going to have to explain why services are no longer provided. It won't be these Liberal MLAs standing up to the local citizens who will be outraged. It'll be the local government councillors and regional reps.

The purpose of the charter is not what it may seem: a simple response to municipal politicians seeking the ability to enact local legislation without constantly getting approval from Victoria. That would be a good outcome of the legislation. If that is what this legislation were to actually do, good. But in fact, the charter will establish far greater local empowerment to such a degree that local councils will be able to make local decisions that are beyond even the provincial government's jurisdiction. This is a major concession by the provincial government that reflects the intent of the government to place municipal governments beyond the reach of a provincial government. While there may be some who applaud that, that comes at the expense of provincial oversight, and the implications are profound.

What the charter does is allow local government to pass local legislation that is suitable for its own exclusive interests. For people such as developers, they can pass local laws without any check by a provincial government, especially in the area of property development. That's what this legislation does. In fact, I would put it that the charter actually intends to set up a developer's paradise once provincial governments have ceded this power to the municipal governments. In no way do I place any of the blame for this on local governments. It is the provincial government that is doing this, and where local governments are strapped for cash because of the downloading and the cutting of the provincial government, they may be forced into the balkanization and creation of a developer's paradise.

Furthermore, under existing legislation we have municipalities like Surrey charging pharmacies a $10,000 fee if they want to dispense methadone. Just a few weeks ago the Surrey city council passed a bylaw allowing the RCMP access to the private files of methadone users. Now, thank gosh, common sense prevailed among some city councillors at Surrey city council, and that proposed bylaw has been put on hold. But this Community Charter would further allow rogue municipalities like Surrey to not do their fair share in addressing social and health problems in a region. It would allow rogue municipalities to opt out. We are far too integrated a province to allow that to happen. The province needs to maintain control over important services such as the provision of health care, but with this Community Charter that rogue municipality of Surrey would be able to get away completely with its bylaw opting out of good health care.

We as a province need to balance the notion of community control and decision-making with a broader understanding of the public good. I never hear this government talking about the broader public good — ever. I never hear this government talking about citizenship. I never hear this government talk about civil society — ever. All they talk about is cutting, telling people they have to pay more, helping business to do whatever it wants at the expense of the greater good. Never, never have I heard one MLA on that side or this side talk about the greater public good. This Community Charter will carry on with an undermining of the public good — not an enhancement but an undermining. It may undermine progressive and innovative measures in communities by allowing the balkanization of municipal controls.

For example, with the Community Charter, a community can now pass a bylaw making needle exchange illegal. That could be a direct result of this Community Charter, and that is a dangerous direction to be going in. Certainly, in the lower mainland right through to the Fraser Valley, there may be legal borders between municipalities, amongst communities. That may be true. There are legal borders in the lower Island, but there are not social borders. There are not health care borders. People live in an inclusive, integrated community. They shop together; they pray together; they educate their kids together. Businesses draw upon communities across boundaries. Yet this government, rather than integrating the greater good and the social responsibility, is heading in a very dangerous direction that allows a rogue municipality to opt out of its responsibility.

Yet I do admit that the prime motivation for this latest Community Charter has not changed, and that was to render impotent the provincial government's overseeing of local legislation pertaining to development which, through cooperation of local councils, will give a green light to unrestrained development. This government, as I say, not caring about a civil society or the greater good, does care about development, does care that their developer friends get a green light and have all of the restraint removed from them as they proceed to pave the province.

Projects that previously would have required approval through a referendum could simply be approved by a city council after being put forward by the mayor and staff — gone. Community input — gone.

On the issue of downloading, when the province abandoned air emission checks for vehicles to go through AirCare stations, it told local governments to pay for it themselves. They're already downloading, and this is one example where this Liberal government, at the provincial level, says: "Oh, we're not downloading. We're getting out of the business of AirCare and air emission checks." However, one of the highest priorities of the citizens of communities is clean air quality. The citizens don't want to abandon control over air emissions, so local governments are left to pick up the program that has been abandoned and that is demanded and that is needed for quality of life. I fear that this is only the first of many areas which will be dropped off at the doorstep of municipalities.

This Community Charter will transfer title to most roads and parks in municipal boundaries to the municipalities. It will provide limited power to municipalities to prohibit certain defined business activity. However, that's equal to current powers. There's noth-

ing new there. It prohibits assistance to business, but there are some exceptions, which will need to be explored at the committee stage.

The charter now provides to local governments expropriation powers which have broad implications. The Liberals said that they wouldn't do that, but now they're doing it. The Liberals now say that if they don't assign responsibility to a municipality but instead walk away from it, they don't have to provide the resources.

Over and over again, just think about all of those provincial services throughout our communities that could be abandoned by this government. And there will be no ability for any compensation to the local government for picking up those much-needed resources.

The Minister of Finance and the minister responsible for the Community Charter have said to local government: "We're going to give you the tools and the authority you need to be more autonomous." Then they step up to the tax trough and devour everything in sight — the provincial government — with gas tax eaten up by the province, sales tax increase going to the province, property tax increases going to the province.

The province is going to take 2.5 percent more for school taxes just this year — just this year. It will be the second year in a row that they've increased school taxes. This provincial government has off-loaded — or uploaded, I should say — the costs for many employee benefits such as MSP premiums. The extended health benefits of employers are going to skyrocket because of the changes to Pharmacare, the cuts to Pharmacare. Employees' drug costs aren't going to change. This government hasn't done one thing to control drug costs. What they have done, though, is off-loaded the costs onto either the individual — the poor, sick and elderly — or the employer. That's what municipalities are facing because of this government.

Municipalities are worried to death about the uploading of employee benefit costs by this government. Of course, all of these taxes filter down to the local ratepayer and right onto our property tax bills. As the then Liberal opposition party liked to say: "You know, there's only one taxpayer." And now what is it? This provincial government wants to be the only one to tax that taxpayer. They want to take all the money for themselves at the expense of services at the local level.

Furthermore, the differences between assigned responsibilities and responsibilities that become the burden of local governments because of the provincial government ceasing to act in those areas are not addressed in the legislation at all, and there's good reason for that. It's because the government didn't want to confront another broken promise. Key areas such as health care, child care, social housing, social services, environmental protection and court services could be off-loaded to the community. In fact, I think you will see, Mr. Speaker, that in many areas of the province local communities are already having to pick up those services because the provincial government has abandoned them. Either the local taxpayer is forced to take on the burden, or local governments will simply refuse to provide the services. The group that is then harmed by that is the citizen, the British Columbian who needed that service.

However, if local governments do wish to provide services, the provincial government hopes the new charter will encourage municipalities to turn to the private sector rather than the public sector. The provincial government can't make private-public partnerships work. They're abandoning attempted private-public partnerships every month, but they want the local government to make that model work. Yet just last year residents in the lower mainland defeated a greater Vancouver regional district plan for a public-private partnership around water usage. It's because the citizens didn't want that. They didn't want a private-public partnership in our water facilities.

I would hope that communities can still have the power to effect change in their communities, but I want to ensure, through debate, that the provincial government doesn't handcuff communities when they want to keep resources in public hands. Since the province won't be providing any new resources of their own, it will be likely that the municipalities will come up with new ways to tax citizens. Some municipalities may relish that, and others may be forced to do that.

Regulations and borrowing powers related to concurrent jurisdictions, I submit, will be important in assessing the effectiveness of the charter. It is still left to be discovered what those regulations and borrowing powers will be.

Even organizations like the provincial chamber of commerce and other business organizations have raised concerns about this very issue. In fact, John Winter, the president of the B.C. Chamber of Commerce, said: "We see it" — the Community Charter — "as fraught with potential dangers. In our view, if they're going to expand those powers of municipal government, commensurate levels of accountability should be provided, and they're not." Ooh, is that John Winter of the chamber of commerce fearmongering, spreading misinformation, or is he telling the truth?

Even the government's friends at the Canadian Taxpayers Federation put out a press release saying: "Want to Pay a Municipal GST?" That was the title of their news release. Funnily enough, when I was reviewing the debate that occurred this morning, I didn't hear any Liberal MLA raise those concerns on behalf of their friends at the Canadian Taxpayers Federation or at the chamber of commerce. Maybe it slipped their minds, or maybe they're going to get up when I sit down and raise those concerns. I see many here who work hand in glove every day with their chamber of commerce — and good on them — so I would assume that they'd stand up and raise those concerns.

Business continues to object that the Premier's stated goal of "empowering local government" will mean more downloading, more taxes, more regulations and greater barriers to investment. The B.C. Chamber

of Commerce said that the charter was a disappointment after it was tabled last month in this Legislature.

Even Liberal insiders at the B.C. Business Council say that this will add taxes and regulation. B.C. Business Council president Jerry Lampert, for whom I have a great deal of respect, said: "Here they go again in B.C., where they make it difficult for B.C. to operate." We're hearing now that business groups are working behind the scenes to lobby for amendments — interesting — moves that would ease the ability of the province to download and handcuff the ability of municipalities to raise revenues.

Ooh, I wonder if that Minister for Deregulation — that oh so important Minister for Deregulation — has signed off on those proposed amendments. I wonder. I'm sure we'll discover all of that when either the Minister for Deregulation speaks or we have a debate about how much red tape is imposed — or is asked to be imposed — by the business community. I even hear that there's going to be some Liberal MLAs who want to work on behalf of their business friends to propose amendments to the Community Charter so that this province can download even more onto municipalities and not allow them to raise revenues.

Well, I believe that small business should be especially concerned about this Community Charter, and they are. There is a great deal of disagreement regarding the interpretation of the charter. You wouldn't know it from the debate this morning, but there is out there in the community. There are many — not me, because I'm not a lawyer, but there are many — who are well versed in municipal law, who are predicting that this Community Charter will result in expensive and time-consuming litigation. Gee, won't that be interesting?

The Community Charter may weaken public oversight, and it may leave municipalities open to lobbying by private interests to a greater degree than we presently see. Generally, whereas government has claimed that it's providing vast new powers, those powers seem largely focused in two areas: allowing the municipalities to provide unlimited services — and of course, that's necessary because this government needs to pave the way for downloading — and secondly, providing a broad and greater power to privatize services, and that's where the change from corporate power to natural person power comes in. Giving municipalities natural person powers gives them greater ability to privatize services. I know, for those of us who are lay people, that this is a concept that doesn't come to us naturally, because we're not trained in that area, but I will be exploring that at length in committee stage.

The issue, of course, on that matter is further confused by the fact that the government at some point could make access to infrastructure grants for things like water projects subject to the use of a public-private partnership. The government could now use what has worked extremely well, a three-level government infrastructure program — federal, provincial and municipal — as a political stick to beat the poor dog at the municipal level to force them into public-private partnerships. That's what this legislation now enables the provincial government to do.

There will be changes to the borrowing authority which will make it subject to municipalities' revenues rather than just their assets. It may allow private access to the municipal finance authority and the use of their approved public funds through the municipalities.

There will be a change from a 5 percent threshold to a 10 percent threshold of citizenry on counterpetition provisions, making it more difficult for citizens to raise issues of concern. Let me explain that. Under the Local Government Act, changes brought in through consultation in the 1990s, if 5 percent of the eligible voters at the local level sign a counterpetition to have an action of local government reviewed and reconsidered, then it must be reconsidered. This government has raised the bar so that now 10 percent of the local electorate must sign a counterpetition in order to have reconsideration.

How does that deliver on the promise of this government for greater openness, greater transparency and greater accountability? By making it harder for local citizens to have local government actions reviewed?

Exemptions such as property tax exemptions for industrial properties could start a race to the bottom amongst municipalities — municipalities that are strapped for cash because of downloading by this government, who are strapped for cash because businesses are fleeing their areas because of the economic downturn in this province, mills closing, mines shutting. Municipalities may have to seek desperate measures to get businesses to their areas. There is the ability under this Community Charter to allow for property tax exemptions now — special economic zones, some people call them — so that industrial properties could be put into a special economic zone and not have to pay property tax.

Given the dire straits of our economy right now…. It was just released today that in 2002, we were at the bottom of economic growth. That's not me fearmongering; that was Statistics Canada. They'll probably be accused of spreading disinformation by this government. There's British Columbia hanging around down at the bottom in terms of economic growth for 2002.

The areas particularly harmed by slow economic growth are those in the rural and remote northern communities and coastal communities. They may be desperate to create special economic zones and exempt industrial properties so that companies will come and settle there. But that's a race to the bottom. That means others have to pick up the slack in that community, or it means services don't get delivered. Either way, this legislation permits that, and that's a step backward in the well-being of all in the community.

There are presently no new revenue sources to pay for new responsibilities, so this will open the door to

road tolls, fuel taxes, local entertainment taxes, resort taxes, parking stall taxes and an increase in fees. There's the potential for all of that now. But I guess we have to wait to see, as the next shoe to drop comes in, just how far this government is going to permit local governments to raise money from those revenue sources.

Municipalities are rightfully looking for a more stable and broadly based revenue source, like a portion of the retail sales tax or the gas tax. Yet there's nothing from this government on that. Nothing on revenue-sharing from this government — for gaming, for instance. The previous government did. Nothing on revenue-sharing from highway fines or speeding fines. The previous government did. On both those counts this government, then in opposition, said: "Oh, the previous government didn't go far enough in revenue-sharing." Well, as we see, this government has done nothing because they are so desperate for the revenues and the cash themselves.

The municipal charter does require the provincial government to consult with the Union of B.C. Municipalities over changes to the Community Charter. And some may say: "Good." But now that lets them off the hook for having to discuss changes directly with the municipalities. So while municipal governments, I'm sure, support the Union of B.C. Municipalities, consulting only with that provincial body is far less inclusive than a consultation that would require the government to talk directly with the municipalities themselves. I would submit that that takes away the ability of local governments to be creative in dealing with specific issues that affect their region. Local governments may have a solution to a problem that has arisen out of the Community Charter, but if this government refuses to talk with them at the local or regional level, then that creative solution will be long gone.

Another aspect of the Community Charter is that the provincial government or corporations could invoke the confidentiality clause so that the Union of B.C. Municipalities may not be able to confer with affected municipalities. Wouldn't that be interesting? The only body the government is required to consult with may be precluded from further consulting with its own members because of restrictions put on it by this government. And yes, I repeat: the municipalities — local governments — will have no broad-based revenue source.

Municipal governments took the time and effort to respond to the legislation, and yet there has been little response from the provincial government. Certainly, local government concerns that have been reflected publicly have not been represented by their Liberal MLAs — yet. Maybe I'll be hearing the debate, but their local concerns have not been reflected. The legislation has largely failed in providing autonomy to municipalities. Rather, it has increased municipalities' financial risk.

The provincial government is going to achieve by regulation some of the most contentious agenda items around the Community Charter, items like removing democracy requirements for approvals and changing the borrowing formula for the Municipal Finance Authority. Those are going to be done by regulation, which puts those changes beyond debate in this chamber.

The provincial government may encourage privatization by attaching conditions to infrastructure grants, as I've already said. Of course, to repeat, there is no definition of downloading in this act. Even though the government promised that before new responsibilities are assigned to municipalities, there must be resources to fulfil the responsibilities, we see that that is not true with this legislation. All that is ensured is that consultation must occur between the province and the Union of B.C. Municipalities before those changes can occur. That's all.

Now, there are good parts to this legislation, good parts that recognize the important role municipalities play in the development of the province. However, many pieces of this legislation have not been thought through. There will be major implications and legal issues as we proceed. In many areas this legislation abandons provincial oversight, a provincial oversight that existed as an added layer of protection under the previous legislation, now leaving municipalities, especially small ones, vulnerable to the lobbying efforts of well-connected developers.

It is the position of the opposition that we proceed with extreme caution on this legislation and look closely at the provisions that cause the most alarm. Otherwise this is a dangerous direction to move in. This legislation tabled today, two years after it was supposed to be tabled, is a sad story about off-loading costs to municipalities in order to pay for the government's reckless tax cuts for the wealthy — reckless tax cuts that haven't done a thing for stimulating the economy of this province. We will be living with the implications of this legislation for as long as this government is in power.

J. MacPhail: It's interesting that the Minister of Labour says that the tax cuts have somehow stimulated the economy. I can hardly wait for him to stand up and give that evidence, particularly in his own community. He somehow claims that in fact there are two million people working in this province, and yet those two million people are earning less than they did two years ago. So more people are working for less, and that minister likes to say that's good news. How is it good news that more people have to work longer and get paid less?

The statistic he forgets to give is what the provincial payroll is. The provincial payroll has declined in this province by 2 percent, so we have more people working for less. As a matter of fact, it was at the Union of B.C. Municipalities that one local councillor stood up and said, when the Premier tried….

J. MacPhail: I know that there's a time limit. Don't worry. The government's own heckling will not interfere with us reaching the time limit on this.

It was interesting that when the Premier stood up and gave that statistic at the Union of B.C. Municipalities about the number of jobs in the province now, one local councillor said: "Yeah, and my son has five of those jobs, because that's what he needs to earn a living."

Your statistics are absolute balderdash. More people have to work longer, and they get paid less. That's what this government says is good economy. No wonder we're in such dire straits in this province. Sawmills closing, pulp mills shut down, mines shut down, the technology industry in the dumps, farming in dire straits — all over this province this government is in dire straits, and now we have municipalities in dire straits because of this.

We will be living with this legislation as long as this government is in power, so let us ensure as legislators that on the front end, as this legislation is passed…actually stand up. Every single Liberal MLA has a vested interest in this legislation, because every single Liberal MLA has at least one local government who will be affected by this legislation. No one can opt out — no one. It's important at the front end now that we think through the implications — we build in those safeguards for our communities and our neighbourhoods — so that we can thrive democratically and not be held to ransom by developers or allow corporations access and control to public resources like our water system and so that we do not allow progressive and innovative health measures to be written off because they've been abandoned by the provincial government and they've been closed down by a subsequent municipal decree.

I know that many, many share these concerns. The minister has been flooded with responses such as this, and it's time now that the government, as they move forward on this pet project of the Premier, actually spend some time, make corrections and get it right.

Deputy Speaker: Closing second reading debate, Minister of State for Community Charter.

Hon. T. Nebbeling: I will be brief in my closing remarks, but I hope the member who just spoke will feel a lot better after we have gone through committee. I think many of the issues that have created concern for her are more perception than real fact. During committee, no doubt, we will be able to give the clarification she needs to indeed feel like many, many British Columbians do when it comes to the Community Charter.

The Community Charter has been created by the communities at large. It has been created by the elected officials from all the towns and villages throughout British Columbia; it has been created by citizens throughout British Columbia. Labour has been involved; business has been involved. We truly can say that this has been a B.C. community initiative and that the community aspect has been a driving force.

We wanted to make sure, in creating this charter, that we were going to have the involvement of all British Columbians, because it is all British Columbians that will, at the end of the day, live with the charter as the new guidelines for how local governments will indeed speak up for their communities on behalf of their communities, focused on what is needed in their communities. It's something that today, with the existing local government, is very difficult to achieve due to the red tape and all the other pieces of legislation that have been nothing else but barriers for local governments to achieve community objectives that were driven by the community members.

The Community Charter we have created over these past two years carefully melds the needs of each and every one of these British Columbians that have been participating. The innovative and empowering legislation was designed to allow communities to be flexible to meet challenges and to make the most of their opportunities in this growing economy. We believe we have met this call through the modernized P3 rules, the creation of revenue sources that will be introduced in the fall session and the reduction of cumbersome red tape.

By recognizing from the outset that local governments are key partners in creating better government, we are leading towards the creation of prosperous and sustainable communities — something from which each citizen in each corner of this beautiful province will benefit.

Hon. T. Nebbeling: I move that the bill be placed on the orders of the day for committee at the next sitting of the House after today.

Bill 14, Community Charter, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. G. Bruce: I call Committee of Supply, the estimates debate for the Ministry of Advanced Education.

J. MacPhail: I'm wondering whether the minister would join me in asking someone to report to us on the cultural event that will be occurring as she and I are in here, which after 5 o'clock is the hockey game. I'm just wondering if there are any angels out there, if they could at some point get a message in to us. It will be in the latter time of our debate. Is the minister willing to join me in that request?

Hon. S. Bond: I'd be absolutely delighted to join with the Leader of the Opposition. I'm sure we can find an angel listening in my office, if not in hers. Yes, that is something we can do together. Thank you.

We ended the discussion around the interest debt servicing. I'm wondering whether the minister has had a chance to examine that. I'm interested in the aspect of debt servicing. We know that from the '02-03 budget, while debt service costs and amortization of prepaid capital advances were budgeted at $239.1 million, those costs came in under budget to approximately $218 million.

It has also been noted that one contingency fund of the minister will be reduced permanently by $9 million, and that is to reallocate money away from debt-servicing costs for this year. I'm interested in the trends, in how it all works. There is a reduction in debt-servicing costs, blue book to blue book, of about $3 million as I see it, and then we've lost the contingency fund. Interest rates are going up.

Hon. S. Bond: I just want to clarify that the prudence provision is found in the EIO subvote, not in the debt service portion. I just want to be able to explain to the Leader of the Opposition the variance. The $10.3 million came from lower than expected interest costs and cash flow. Other costs such as banking charges, brokerage fees and those kinds of things were $0.5 million, and in the sinking fund the variance was $10.3 million — for a total of $21.1 million.

J. MacPhail: Where I'm going on these questions is that I'm trying to get reassurance that these changes of moving money…. The minister admits, and is to be credited for this, that there is no new money but that there's a moving around of money. I'm trying to get some assurance that the moving around of the money is actually a permanent move to the colleges and institutes and universities, and that there is enough in the budget elsewhere to ensure against that money being drawn back, because, of course, the money is reduced. The overall budget for institutes…. Sorry, what's the exact name of it? The Educational Institutions and Organizations subvote or line is being reduced this year, and it will be further reduced by about $22 million next year.

If indeed those reductions, which will go ahead, are then exacerbated if it turns out this money given to the colleges and the universities is only one-time funding, that leads to instability.

Hon. S. Bond: Yes, I can only reassure the Leader of the Opposition that in '03-04, certainly, those dollars are coming from base funding, and they will continue. In fact, we've indicated that we have a prudence provision in place to meet potential challenges, and we know what those are. Those are interest rates and student grant demand, but we do have the prudence provision in place. The benefits that were sent to institutions in '03-04 are coming out of base funding and will continue to be out of base funding.

J. MacPhail: What are the debt-servicing cost estimates for '03-04 and '04-05? Based on what forecast?

Hon. S. Bond: The debt-servicing cost assumptions in fiscal '03-04 are $142.3 million; in fiscal '04-05, $145.3 million. The assumption based on an assumed rate of 6 percent, and we can double-check. We think it's a flat 6 percent, again, that we're assuming in '04-05. We would be happy to confirm that and get back to you — but 6 percent in '03-04.

J. MacPhail: With the change of individual ministries being responsible for their own capital and debt

servicing, do individual ministries do their own forecasting, or is it done by the Ministry of Finance?

Hon. S. Bond: Yes, we as a ministry do the cash flow. The provincial treasury does the assumptions around interest rate, and they also manage the sinking fund.

J. MacPhail: I'm going to jump around a bit in the order of my questioning here, just because some of the questions have already been answered. In order to maintain the flow, I want to move from…. I told the minister I was going to go through all of page 30. I want to move first…. We may have time to do this in the time available. I want to go to what that additional funding provides and what the reaction to that has been.

On March 17 and 18 the minister released two press releases announcing the new funding. Just reading from the press release, it says that $12 million will be allocated to create some 3,154 new post-secondary spaces. Then there was also the one-time grant of $10 million, $8 million of which is unconditional and $2 million of which will go towards implementing the new industry training model. I'm going to deal with ITAC and the new industry training model later. In terms of permanent money — base money, core money — for the institutions, is it $12 million or is it $22 million?

J. MacPhail: Sorry. The only confusion I have around this…. We did agree earlier that it was $21-point-something million. I went back and read the news release, and on that one-time grant of $10 million, it said $8 million of it is unconditional. It wasn't clear if that was a one-time grant for one year or whether it was continuous flow.

Hon. S. Bond: No, that $10 million is one time for the one year. It was, as you know, garnered out of the '02-03 budget as savings. We transferred that immediately upon knowing we had those dollars. The unconditional part was that they could choose to use it to the best advantage which the institution found. That is not ongoing money. That is one time.

J. MacPhail: So the $21.7 million is what the colleges and universities have to create 3,154 new post-secondary spaces?

Hon. S. Bond: The institutions now have block funding. The additional dollars that will be added to the base provide them with the entire envelope they have to create those seats. This was added to their entire block funding, and that's the entire amount they have to create the new seats.

J. MacPhail: All right. Let's explore some of that, then. I have been participating in discussions about how much it costs to fund a single space, and the media are interested in this as well. How does the new government determine what it costs per institution, per faculty, per discipline, per space?

Hon. S. Bond: Institutions are now provided with block funding, and in the budget letters that we send to them, we have separated out and have excellent cost estimates around particular types of seats in particular. Those would include medical and health care professionals and computer science, and those we have funded to a very specific cost amount.

Other than that, we work with institutions, and we use the historical knowledge and database that we have, and we work to create a block-funding amount. We separate out the seats that have specific assessments of cost, and those are funded specifically. For the rest, we work with institutions and create the block-funding amount.

J. MacPhail: I did the calculation on the $21.7 million and divided it by 3,154 spaces. I know that's not the way it's done, but it's about $6,400 per space. I can't figure out any other way that an institution could calculate how much money they're given other than by taking the portion of that 21 million bucks they got and how many seats they have to create new and dividing the number of seats into the amount of money they got. That's the marginal rate of funding, let's say.

How did the government determine that? Was it by institution? Was each institution allocated a portion of the 3,154 spaces, and how did it break down?

Hon. S. Bond: I certainly do have the list of increases institution by institution, but I think the question is more about the process for allocating those seats.

The first thing we do is work with institutions to look at the capacity that they have and their ability to deliver new FTEs. In particular, we are looking for the specific needs that we have set as a high priority for government, including medical seats, training for nurses and doubling the opportunity, etc. What we do is work at where we can best fit those seats, and then we look at the capacity of institutions individually and their ability to deliver the increases that are expected.

J. MacPhail: Let's take one case, then, because as I was doing my research, Okanagan University College came up with quite a bit of media around it. The minister made the announcement on March 17 and 18, and I think…. Gosh, let me just read what it says here. This is from a report on March 19, so it was in response to the minister's announcements of March 17 and 18.

He's talking about a $12 million fund. Has that been corrected? Do the institutions now know, between the colleges and the universities, that they're getting $22 million — $21.7 million?

Hon. S. Bond: In terms of the $12 million…. One more time, I just want to make that clear for the record. The $12 million we announced was the lift that exceeded what institutions got in the previous year; $21 million is the amount that exceeds what they expected to get. In other words, they expected to actually receive fewer funds. In fact, we were able to work very hard and give them more than they got last year.

In terms of the per-student grant, as I've said, we are now using block funding. Certainly, if you do straight math and divide the number of students, you can look at the student FTE costs, but we have given institutions the ability to add students to sections. That is one of the tools. We've given them a number of things. They also look at external revenue. In fact, the $12 million was clarified, and hopefully, it's much clearer today.

J. MacPhail: I thank the minister for that, because I now understand it. Post-secondary institutions will receive $12 million more than they did last year, but it's $21 million more than they thought they were going to receive. The reduction is wiped out, and they're getting $12 million more. All right. That's universities and colleges. Everybody's nodding yes.

For that $12 million in new money, then, there will be a requirement to add 3,154 new spaces. One really has to divide to understand the marginal rate of funding, and I'm using that kind of like the income tax term. As you add things at the end, you pay more income tax if you earn more money. The marginal rate of funding is $12 million divided by 3,154, which is an average increase in funding per space of $3,805. All right. I've got that. That's just average, which doesn't mean anything in terms of individual institutions. But I do have it clear now — 12 million bucks and 3,154 new spaces.

Can we work it through what happened at Okanagan University College? What's happened with them now? Let's use their budget as an example. In '02-03, how much funding did they get? How many spaces did they provide? In '03-04, how much funding did they get, and how many spaces did they provide?

Hon. S. Bond: The first pieces of information are to do with Okanagan University College's budget. Their budget in 2002-03 was $45,395,851. In 2003-04 it is $45,434,098. Their FTE targets in 2002 were 6,480. In 2003-04 they are 6,604.

They're getting…. What's the lift? Can somebody better than me do that? Is it 30, 40 million bucks?

Something's wrong with my calculator. It can't be me. I get a marginal increase of $314 per seat. That can't be right.

Hon. S. Bond: As I explained, we don't fund by seat. When we looked at the capacity of Okanagan University College and compared them to university colleges around the province, we believe they have the capacity to increase very capably the number of seats that are included here. In fact, what we said was that we block-fund. We have given institutions the kinds of tools they need to be flexible about class size, and we expect them to deliver that number of FTEs. We think they have the capacity to do that with the block funding they've been provided with.

J. MacPhail: Yikes, my calculator was right. The marginal rate of funding these extra seats is $314. Then let's just work through the Okanagan University College's budget.

Believe you me, I don't want anybody to write in and correct the record. Nobody asked me. The college didn't ask me to do this, but there's been a lot of media around this. Let's just use them as an example. And the next example I'm going to use is Vancouver Community College, because we talked about them a lot last year.

Somehow with Okanagan University College, after '02-03, the government came to the conclusion that they have capacity enough that they only need an extra $314 per seat for 124 seats. How did those calculations go? How was that determined?

Hon. S. Bond: As I mentioned, as we looked at the FTE utilization for universities and university colleges around the province…. In fact, when we looked at Okanagan University College, their utilization rate in 2001-02 was 89 percent. When you look at the other university colleges around the province, they're running at 102, 98, 105 and 102 percent. So when we looked at efficiency and the utilization rates of FTEs in the province, we considered that as we looked at the FTE assumptions we could make about Okanagan University College.

Hon. S. Bond: Yes, they do — of the university colleges. If you look at universities, their utilization rate is even more impressive. Universities range from 107 percent to 112 percent. The lowest in terms of utilization is the Okanagan University College at 89 percent, significantly below — as a matter of fact, almost 10 percent below — the other university colleges.

J. MacPhail: Okay. Well, we'll see what Okanagan University College says about that. Let's look at a university, then. The University of Northern British Columbia — if we could go through the same exercise: '02-03, grants, students.

Hon. S. Bond: All right. The FTE growth assumptions for the University of Northern British Columbia. In '02-03 the student FTEs were 2,618; in 2003-04 they're 2,811. So that we don't have to use a calculator, either one of us, the change in FTEs is 193. In terms of the dollars that were provided, the budget in 2002-03 for UNBC was $31,465,172, and in 2003-04 it is $33,019,630, for an increase of $1,544,458.

J. MacPhail: There's about $8,000 per seat extra. Is that correct? What makes them…? It's interesting to determine between those two institutions — the extra funding.

Hon. S. Bond: The difference there would be, again, as I pointed out, that we do separate out specific types of seats. As we know, the University of Northern British Columbia will be accepting medical school students. They also have a certain percentage of Doubling the Opportunity, which deals with electrical engineering–computer science graduates. The difference in the allocation reflects the different nature and the type of seats that are assigned to those institutions.

Hon. S. Bond: In 2001-02 UNBC operated at 112.6 percent, having increased their capacity steadily. There was a slight drop in 2000-01 as was fairly consistent, actually, across the sector. There was a slight utilization drop in a number of institutions, but right now UNBC is running at 112.6 percent.

J. MacPhail: So the explanation that applied for OUC doesn't work for UNBC because they're at overcapacity. They get 8,000 bucks per seat, but the explanation is that those seats are, I gather, more expensive to provide. How many of these 193 are new medical…? Are they physician training seats? Maybe the minister could go through the actual breakdown of the 193 and how much it is to provide those seats to the university. How much does it cost the university to provide those seats?

Hon. S. Bond: We'll be happy to provide…. We don't have it with us in terms of the specific breakdown of those. There are a significant number of Doubling the Opportunity, or the computer science and engineering. I should point out that obviously the medical school intake begins in 2004, so this is startup in terms of how we move the program forward. I should point out — I know the comment in terms of utilization rates — that in fact we're going to incent. Institutions that use money well and efficiently and provide seats…. Obviously, that's an important component in how you look at who best utilizes those dollars. So they have an excellent utilization rate, they have a new medical school program, and they also took a number of seats related to Doubling the Opportunity. We'll provide the specifics when we're able to get that information for the Leader of the Opposition.

J. MacPhail: I was up in Prince George just a couple of weeks ago, and I met with a group of university students who said that their tuitions now have been hiked so high that they're, I think, the highest in undergraduate areas. They're the highest in British Columbia — UNBC — in undergraduate…. So I was just wondering how, if there is…. That's why I'm particularly interested in UNBC, but I'll have to wait to get that information from the minister.

Speaking of enrolment targets, which are what the minister was just talking about, based on the fall 2002 enrolments, did all institutions meet their assigned enrolment targets?

Hon. S. Bond: We don't have the complete data on which to make that conclusion yet. We will receive that at the end of June. Universities have certainly continued to overproduce, and as we've looked across the sector, we have managed to meet the system-wide target across the institutions. We simply don't have the specific institution-by-institution breakdown until the end of June.

Hon. S. Bond: It's actually an annualized academic year, so it starts in September of '02 and ends in June of '03. That's why it's taking so long. We're not there yet.

J. MacPhail: The minister seems to think that the system-wide target is met, so what happens? Is it kind of like your ministerial accountability budget in that if the whole system meets it, there are no penalties? If it's an incentive program, are there any penalties for not meeting the targets?

Hon. S. Bond: We don't use the punitive approach. As you could see in the example we gave of Okanagan University College, we do ask institutions to begin to provide us with a plan to see them reach what we believe to be an appropriate utilization rate, and certainly one that's comparable with the rest of the institutions in the province.

J. MacPhail: The reason I want to examine this a tiny bit is because the minister has said there will be an incentive program. If the marginal rate of funding new spaces isn't enough to actually fund those spaces, and the universities and colleges have to take from resources across the broad institution, does the incentive program encourage them to fund the new spaces first perhaps at the expense of the other spaces? How does the incentive program work?

Hon. S. Bond: I think the initial discussion about an incentive program came when we talked about the accountability framework and whether or not, in essence, there would be a punitive approach if people didn't meet their targets and their accountability standards. In fact, there isn't an official incentive program in place. As we move to the point in the ministry where we're adding new dollars, that would be one of the things we would look at as people worked toward their accountability contract. We don't use the word "contract"; we use "budget letters" and "accountability letter." We're simply saying, in this case, that institutions that use public dollars effectively and provide maximum numbers of student seats…. We recognize that, and we are encouraging other institutions to work to a better utilization rate for their FTEs.

J. MacPhail: But an incentive system implies that there's an incentive. Is it a moral incentive or…?

Hon. S. Bond: In fact, there are no explicit incentives. I think perhaps the way it was described might be the most effective. We've found that institutions actually work very hard to meet their targets for one particular reason: they put students first, and they know that access is important. We've given them a number of other tools that they can use. We expect them to be efficient. In fact, we've found the success to be excellent. We look forward in June to not only meeting the system target, but the majority of institutions will have met their FTE targets.

J. MacPhail: Let's look at one more example. I have two more examples that I wish to look at with the minister. Both are in the lower mainland. One is Douglas College, and one is Vancouver Community College. Let's start with Vancouver Community College, because we spent quite a bit of time on this institution last year.

Hon. S. Bond: All right. VCC, I think, was the question from the Leader of the Opposition. In 2002-03 their operating budget was $43,521,550. That increased in 2003-04 to $44,374,700, for an increase of $853,150. Their FTE targets were — let me just get the right pencil line — 6,948 in 2002-03, and their FTE targets in 2003-04 are 6,990, for an increase of 42.

Hon. S. Bond: If I might just be permitted to introduce the newest staff person that's joined me. It's Arlene Paton, and Arlene is the director of public institutions in my ministry.

I want to point out — and actually, this should be good news for the Leader of the Opposition — that one of the things we tried very hard was to recognize the unique nature and situations and capacity of institutions. In looking back, when Vancouver Community College expressed extreme concern about their situation and I reviewed the situation, they seemed to have taken an inordinate reduction in what was called the learning opportunities fund. So we met with the institution to try to mitigate some of the circumstances they were facing. In fact, that's why you see the increase that you do and the very reasonable amount of FTE expectations that we had for VCC.

J. MacPhail: Good. Well, given the information, on the face of it, it is good news. I have not had an ability to focus on this. I have heard just recently some concerns, but I'm sorry, I can't raise them with the minister because I'm not well enough informed about that. It does seem that the extra funding should go a long way.

What happened to the…? I think English-language training and ABE were a concern there. What's the update on that?

Hon. S. Bond: I certainly don't want to imply that VCC does not continue to face challenges, because they do. As you know, this was one of the situations that we tried to work with them. My staff has spent a great deal of time working with VCC. As I understand it, as of recently they were going to make a very significant reduction in ESL seats. They have replaced those seats — a significant number of them — but they are still reducing the number of ESL seats. We've worked very hard with that institution, and there has been some mitigation of the circumstances that were made public.

Hon. S. Bond: Douglas College. The operating budget in '02-03 was $42,795,358. In 2003-04 it is $42,846,558, for a change in dollars of $51,200. The FTE targets were 6,810 in 2002-03, and in 2003-04 they are 6,889, for an increase of 79.

J. MacPhail: So they got a marginal rate increase of $648 per extra seat. What's their operating capacity?

Hon. S. Bond: My staff doesn't have the utilization rate for Douglas College here. We think it's about 98 percent, so they are doing very well in the utilization rates.

I think the point of the discussion — and I appreciate the opportunity to walk through four examples — is simply that we have attempted to assign block funding amounts to institutions based on their individual capacity and also the circumstances they face. We have

given institutions as much money as we possibly can and, in fact, more money than they anticipated and more money than they got last year.

We work with institutions individually because we do want them to be successful. We want them to reach their targets, and we hope that we've been reasonable in setting those targets and sending as many dollars to those institutions as we possibly can.

J. MacPhail: What are the new operating cost increases for institutions in '03-04 — any tax changes, wage increases or the like?

Hon. S. Bond: We don't have that information with us in the chamber, but we'd be happy to provide that to the Leader of the Opposition.

J. MacPhail: That's fine. It would be helpful. I don't know when we're going back into estimates again, but if that information could be to me before we go into estimates again, I would appreciate it.

Let me read some of the details of this. Now, this is general, and it's from the Canadian University Faculty Association of B.C. This was subsequent to the minister's announcements of March 18 and 19. I'll just read part of it, because we have had some explanation of how individual institutions are impacted. I want to talk about the changes this year as they then flow through to '04-05 — so changes in '03-04 as they flow through to '04-05.

That's before accounting for inflation or any extra costs. That's why I was asking what the costs were.

Just as an aside here, the reason why the Canadian University Faculty Association has reached that is because the marginal rate for funding the seats, when averaged over the cost of providing seats for all who attend, results in this reduction. Then it goes on to say: "Projections for '05-06 will see university enrolment grow by a further 2.3 percent." In '05-06 there's a funding increase of $15.4 million, but that will not offset the planned cut of $19 million in '04-05.

They come to the conclusion that after accounting for inflation, there will be 12.4 percent less per student in government funding in '05-06 than the funding of this year.

Then they come to the conclusion that provincial government spending per university student will be at a 30-year low in '05-06. They go on to emphasize that point — that funding per student will have dropped from $10,103 in '02-03 to a projected $8,853 in '05-06. That's calculated in 2002 dollars using the Minister of Finance's inflation rate projection.

I understand that that's an average across the system. But averages mean that even if it's not each institution being affected by that average, some are maybe doing better, but some are doing worse as well. That's before taking into account any increased costs over and above inflation.

Now, institutions. A large portion of their budget is the wage bill, so you can't put an inflationary cost on top of a wage increase cost. I understand that. But I assume that there are wage costs. What's the saving grace to that analysis?

Hon. S. Bond: Certainly, the challenge that we faced in '03-04…. We worked very hard. We mitigated the drop. My challenge to my ministry will continue to be that we will work hard to send every single available dollar we have to institutions. We did that last year, and we're going to continue to work hard to do that. We recognize that the most important place for our dollars to go is to institutions for students.

I should also point out that from our perspective, institutions are delivering the number of seats. They are overproducing. That is an excellent thing, and we want to continue to encourage that. In fact, many of our targets are just catching up to the numbers that are already in the system.

I just want to point out that over time, while I understand the sort of urge to look at the funding per FTE…. As I looked back over the history of the system, the FTE grant in fact dropped irregularly over a number of years — '95, '96, '97, '98 — and there was still an assumption of hundreds of seats grown in the system. Really, it's a practice and situation that's occurred in the province for quite some time.

We are working hard to send as many dollars as possible to institutions, and in '04-05 we want to work as a ministry to mitigate the drop as much as we possibly can within our protected budget.

J. MacPhail: All right. Let's look at funding in another way then — institutional funding, if the minister wants to look at it that way.

The analysis that I have was done by the College Institute Educators Association who, in my experience, have never been wrong in their analyses. They're always accurate. They have done an analysis. This chart — and I expect the minister has it — does not include the one-time funding of $10 million, and based on our discussion, it shouldn't.

Every single institution save one, Malaspina University College, will have an overall decrease in institutional funding. BCIT goes from funding of $84.172 million down to $81.763 million. That's adding the new spaces as well, so it's not looking at it as per pupil, per student. It's looking at institutional funding. Every

single post-secondary institution but Malaspina goes down. CNC — $22.768 million goes down to $21.909 million. Kwantlen University College goes from $50.354 million to $50.204 million, and I think that by '05-06, there are 9,000 more seats expected for that less money. So there's another way of looking at it.

Yes, the system has always been asked to add seats with marginal funding. I'm not sure any institution could say that they've been in a situation where the overall funding is in real decline over the period of three years.

Hon. S. Bond: In fact, the discussion we're having now is actually about the '04-05 estimates debate that undoubtedly we will have. We were in precisely the same position last year. Institutions — all of them — expected to actually drop in their funding. That didn't happen this year. We worked very hard. In fact, they received more money.

While I respect the comment that we shouldn't include the one-time funding, one-time funding, while it isn't ongoing, does provide much-needed assistance, and it allows institutions to reallocate and look at dollars in a different way. In '04-05 I am confident that as we move forward to that estimates debates, we will continue to work hard as a ministry.

The other thing is that institutions, for the first time, now have a three-year outlook in front of them. While they may face challenges, they look at those numbers, and at least the information is there. The great news is that as we move forward to my third year out, our ministry will receive additional funds. We're working hard. That is an '04-05 estimates debate. We were in that particular place last year, looking forward, and we've worked hard to make sure that institutions actually got more money than they did last year rather than an anticipated drop.

J. MacPhail: The reason why the minister takes such great pride in a three-year fiscal plan is because it can be debated as a three-year fiscal plan. She can't have it on the one side, saying, "It's great that we give them a three-year fiscal plan," and then say: "But there shouldn't be questions raised."

Of course, the $12 million lift still has to be determined about what extra costs are associated, separate and apart from funding spaces. We have yet to have that information. We note that last year all the extra money given to institutions didn't nearly make up for the increased costs imposed directly by the government — not at all. We have a situation where that information still needs to come.

I appreciate the minister's optimism about having more money, except that this government has a $2.3 billion deficit this year, and it has to balance its budget next year, '04-05. This government has to, by law, 11 months from now, table a balanced budget. The economy is doing much more poorly than expected. The softwood lumber dispute has not been resolved. Forest revenue is on the decline. Income tax revenue, both corporate and personal, is on the decline as well. All of the signs….

If for some reason this government, in their next budget, decides to give more money to institutions, it means it's coming from somewhere else in the system. This government has a $2.3 billion…. Well, it's actually just finished a $3.8 billion deficit. That's what the real deficit is. They're predicting that the deficit will decline to $2.3 billion. We have no evidence of that. We're actually working with a…. The real deficit, as we speak, is $3.8 billion. I think these are all fair questions to be asked by the institution.

The other way of looking at the extra grant money for this budget is that…. What happens if a university comes to the minister and says that even with the extra money and the requirement to work at full capacity, they still can't deliver these spaces? What happens to that institution?

Hon. S. Bond: We do expect institutions to deliver their target. In fact, should they come to us and suggest that that might be a challenge, we sit down with them and work through a plan that would see them use a number of things. There are issues such as class size. There is external revenue. There are a variety of ways. There are efficiencies. We simply expect them to deliver a plan that would show us how they would meet those targets, and in fact, they've been outstanding at doing that. They recognize the importance of those seats to students in this province, and they've worked hard to deliver. I know that will continue to be the case.

J. MacPhail: According to Robert Clift, class size has already increased by a double digit, so that's certainly not an indication of good education. Of course, then, the only avenue left to the institutions is tuition increases.

Hon. S. Bond: Tuition certainly is one of the components that institutions consider, but they also consider that with the best interests of students in mind. They consider it in discussions with students. They're also expected to demonstrate the benefits provided directly to students as a result of any additional tuition revenue they might generate. In fact, it is one of the things that institutions consider, but I'm confident they do that with the best interests of students in mind. We do expect them to demonstrate direct benefit.

J. MacPhail: Yes, we're going to have a rather lengthy discussion on tuition increases, but we won't start that today.

Of the 3,100 new spaces that institutions have to add, how many are in the categories like health care, computer science and engineering — the professional class seats? I don't in any way mean to take away from any other seats, but I do want to get a bit into how much more expensive these seats are to provide.

Hon. S. Bond: The student FTE breakdown for '03-04 would be 825 Doubling the Opportunity computer

Hon. S. Bond: I'm sorry. I could actually provide this to you in writing, if you'd like. I can read it now. Would that be all right? There are 825 Doubling the Opportunity computer graduates, 130 in on-line learning, 20 social workers, 471 nursing seats and eight medical graduate seats. That leaves approximately — and it's slightly below, but it's just a couple below — 2,000 funded FTE seats across the system, other than those specific commitments we made.

J. MacPhail: These are the targeted seats, and then the rest are general increase. Is there a difference in how much these seats cost versus the general liberal arts?

Hon. S. Bond: Not all of them are more expensive. Obviously, the computer graduate, electrical engineering, and nurses and medical graduates in particular are expensive. Social workers and on-line learning, while they tend to be a little more expensive…. It's certainly not to the degree of the other seats. But they are certainly expensive seats, when you're providing access at institutions.

J. MacPhail: When divvying up the $12 million that the institutions hadn't anticipated amongst the 3,140 added spaces, did discussion occur on an institution-by-institution basis about funding of these demands?

Hon. S. Bond: Yes, they did. We actually, in essence, negotiate with each institution. We look at it on the basis of a lot of factors that are included — things like: do we have lab space there, or do we have the ability to do clinical placements? Especially with things like nursing seats, you know, there are challenges with lab space, etc. We do work with each institution individually about their ability to actually deliver these seats. We want to make sure we meet our commitments and that the institution is also successful. It's very much an individual conversation, a negotiation about how to facilitate this number of seats.

J. MacPhail: Just looking at UNBC, what kind of discussions occurred about funding these seats and how that would impact tuition fee increases? One of the things I learned when I was up there a couple of weeks ago was that last year's tuition fee increase of 33 percent was going to occur again this year. I think it's a 35 percent increase.

Did the institutions say to this government: "If we have these seats and you fund them at the level you say you're going to fund them, we will have to increase tuition at this level"? Were you informed of that?

Hon. S. Bond: No, there wasn't a direct link between tuition and the seats, because in essence we negotiate the costs and we want to be able to facilitate these seats, and they are expensive. So that discussion was not directly linked to tuition with the institutions.

J. MacPhail: Madam Chair, this is a natural break in the discussions, and we're almost out of time. I see the Minister of Forests is eager, so I'll 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.

The bill that we are discussing as part of this debate makes some important amendments to the Forest Act. For the benefit of the House, I think I would like to speak about those amendments from the point of view of the mechanics of what they achieve and then, maybe more importantly, discuss the philosophy behind what has motivated those changes. In addition to the topic I will spend most of my time discussing, there are a couple of other smaller, specific amendments that are involved here.

In short, what this bill does is take what was formerly referred to as the small business forest enterprise program and place it on a sounder commercial footing, and it changes the name. It takes that small business forest enterprise program and changes it to where we now refer to it as the B.C. timber sales program.

Much of what the statute does represents amendments to the Forest Act that deal with the change of name. It also empowers the managers of the B.C. timber sales program, providing them with the authority that they require in order to carry out their job and to administer the timber sale program. For example, timber sale managers will be able, by virtue of the amendments contained in this bill, to issue timber sale licences and associated road permits, register or deregister or disqualify enterprises from participation in the B.C. timber sales program and suspend or cancel timber sales agreements or associated road permits. The legislation also ensures that the appropriate revenues collected from the timber sales program flow into the timber sale account, and it expands the scope of expenditures from the account to include the purchase of

planning information — for example, logging roads and bridges. Those are, broadly speaking, the practical effects or the mechanics of what the amendments to the Forest Act, and particularly those sections dealing with what was the small business forest enterprise program — now the B.C. timber sales program — are designed to accomplish.

Probably more importantly for the purpose of the discussion we are having today, however, is what has motivated the change. It is clearly a desire on the part of the government to ensure that we have an entity and a division of the Forest Service charged with the task of making timber available for purchase that stands on a sound economic and commercial footing. I think there was an argument that could be made, by virtue both of how it was structured and how it was administered, that the former program, the small business forest enterprise program, did not accomplish that goal.

Those who are watching this change unfold — and we have moved to reorganize in order to be in a position to implement following, hopefully, the passage of this bill — will know that what we are in effect doing is creating an entity which exists separately, more independently, from the Forest Service itself. In many centres around British Columbia there will in fact be a separate timber sales program office, staffed by a timber sale manager and supporting staff, charged specifically with the task of processing these sales and facilitating access, via this program, to our forest land base via the types of licences that are offered.

It will be a very challenging task. It will be a very important task, because it will be the timber sales program officials who will ultimately decide, by recommendations, what those licence offerings look like — the term, the size, the volumes that are put out, for what length of time, for what term. Looking ahead, I think it represents an exciting opportunity to do some innovative things to ensure that there are licences of a variety that we have not seen, which may address a particular need within the marketplace. It is also, as I say, an opportunity to ensure that we maximize the return on the resource to the people who own that resource.

I want to take a moment and talk about that as well. Three or four weeks ago, when we announced the forest revitalization plan, I set out a number of principles that guided the development of that plan and will guide us in the implementation of that revitalization plan. Firstly, we said that as a government, we are interested in creating new opportunities for the forest sector in British Columbia. That means new opportunities for the value-added community, new opportunities for communities and new opportunities for first nations, all of whom have a legitimate expectation and desire to be more closely involved in our forest economy — our number one industrial activity in the province, notwithstanding the challenges that it has faced over the past number of years.

We said that we wanted, secondly, to ensure that we were maximizing the value of the timber we harvested in British Columbia — that is, getting the right log to the right processing facility. I'll talk about that more in a few moments, if and when we discuss a subsequent piece of legislation.

But that combination — of creating new opportunities for people, agencies, companies, first nations and communities and ensuring that we are maximizing the value of this precious resource that we have been blessed with and that we utilize in British Columbia — represents two legs of the stool that this forest revitalization plan is built around.

The third principle, however, relates to ensuring that British Columbians can be satisfied in ways they perhaps are not now and that they are realizing a fair return on the sale of the resource or sale of access to the resource that they own, after all. British Columbians own the forest, via the Crown, and they need to know they are receiving fair value for the access they sell to that resource.

Similarly, people who work with our forests and work with our timber need to know that they are paying — are being charged — a fair price for access to that resource. Members will know that as part of the forestry revitalization strategy, we have made good on our pledge to move the province to a true market-based timber pricing system and that as part of that exercise, we are incorporating the use of an auction-based model which would see more fibre made available on the open market for those who are prepared to bid competitively for it.

It is interesting that in the time I've had this job…. Of course, I've learned a great deal more than I formerly knew about forestry and some interesting numbers. The fact that 75 percent of our annual allowable cut — a significant 74 million being our annual allowable cut, when you consider the uplifts that have occurred around the beetle infestation — is captured by long-term, replaceable tenures. That is, I suppose, a very positive thing if you are in possession of one of those tenures; it presents some real challenges if you are not. One of the messages we have heard and I have heard time and time again from individuals who are involved in forestry or want to be involved in forestry is that the lack of access to fibre on a competitive basis represents difficulties for them.

So this move to create a timber sales program through which increased volumes could flow is, in part, an answer to that concern. The fact that it will also provide us with additional data we can utilize to drive our overall timber pricing system is, I think, an added feature, a positive feature and something that is consistent with the objectives we set for ourselves prior to taking office and following the election.

I don't think anyone is underestimating the complexity of the shift. This bill mechanically deals with the easy part. It creates the legislative framework around which the changes can be made and provides the authority that timber sale managers will require. It creates the structure around which those additional timber sales can occur.

The much more complicated aspect to this, of course, is the practical challenge associated with con-

structing a model through which the data will flow and provide accurate numbers that will be reflected in the stumpage the Crown charges for access to our fibre. There's a lot of work taking place now; there is a lot of work yet to be done. It is engaging, as you might expect, the attention of the Forest Service, of government, but also of virtually all the stakeholders and participants — the people that are going to be most directly impacted by the change.

We've already seen, with the operation of the timber sales program, some innovative suggestions from stakeholders around how we can increase efficiencies. I should say this. One of the objectives here, and one of the measures by which I think stakeholders and members of this House will be able to apply against the government, is the degree to which we can improve the efficiency with which timber flows through the system and is available out there on the market for access by those who want to make use of it. That objective is certainly part of this overall strategy.

Ultimately, the centrepiece of the bill is the creation of this timber sales program and providing the requisite legislative authority for the officials that will work within it. There are, however — and I'll just take a moment to do this — several other features of the bill worth emphasizing. One relates to the attention devoted to improving the restraints that exist around restricting raw log exports.

Specifically, what we are trying to do is address a problem and an issue that has arisen on the compliance and enforcement side around log exports with respect to traffic at the border. Under the amendment that is included in this Bill 27, the government will have the ability to define exactly what type of timber product can be exported.

I don't think I am misleading anyone by suggesting that we are trying to respond to a couple of specific scenarios. One relates to: what is a hydro pole? If a log arrives at a border crossing between British Columbia and Canada, is it a raw log? Or is it, as some would suggest, a hydro pole — which, I suppose, to the uninformed is a debarked log? And is that being used as a loophole to get around the restrictions that exist on the issue of log exports? The suggestion is that that is the case, and we are, by virtue of this amendment to the bill, creating the legislative authority to try and close that loophole to the extent that there are those who might wish to take advantage of it.

The bill also makes a specific amendment to some restrictions that have historically constrained the ability that woodlot owners have to process timber. In fact, my recollection is that under existing legislative provisions, there is a daily limit. I'm not sure what the rationale was for that. I can speculate that originally the objective with the woodlot was to provide an alternate source of growing and harvesting trees, not a mechanism for processing facilities to arise. At the same time, philosophically, it seemed to me that is a decision for the woodlot owner to make. If they believe they can operate a processing facility, I'm not sure what the argument is in 2003 for the state to step in and say they could or shouldn't do that and, if they do, for the state to suggest how much timber they should process.

Candidly, I see a situation developing where, if we meet our objectives in terms of expanding the size of the woodlot program, we may see some cooperative ventures arise within the woodlot family, the woodlot federation. That is something, obviously, we are exploring with members of the woodlot federation. But the restriction that has historically existed and exists today disappears by virtue of these provisions, and I think that is consistent with the desire we have as a government to allow those decisions to be dictated by prevailing market conditions.

Lastly, the bill also deals with a fairly specific situation, which has not arisen often, where the timber located on a parcel of land is owned by someone different from the owner of the land, and because of a historical anomaly within the Forest Act, the requisite timber mark required to remove that timber was not available or could not be issued where the owner of the timber was different from the owner of the land. So, there is a specific provision. I'm not sure there was any rationale for that on a historical basis, except that it was not a situation that arose. It has now on a couple of occasions, and that needs to be dealt with to take account of an emerging reality where timber ownership is different from land ownership.

But again, I would emphasize that does not in any way alter the restrictions that exist around the log export question. And, of course, I've just pointed out that we are trying to close some loopholes that apparently have been utilized in the past to manoeuvre around those restrictions.

An overall issue or objective being met by this legislation with respect to the timber sale program, which fits in with our overall revitalization strategy, and then a couple of other specific amendments I have mentioned that relate to some historical issues that required addressing. Those are my comments at this time.

J. MacPhail: There are two pieces of legislation of importance: this one, Bill 27, and then Bill 29. Most of my discussion and comments will focus on Bill 29, but I do want to put on the record at the second reading of Bill 27 some of the concerns that I will be raising in committee stage. I do thank the West Coast Environmental Law Association for assisting and analyzing Bill 27.

Here are some of the concerns. It seems that Bill 27 contains no parameters around the overall nature of the markets in timber sales that this bill expands — for instance, how big it will be, the mechanisms to avoid manipulation, what objectives are to be achieved in the setting of these markets for timber sales.

It appears that the bill does not provide — and I think the minister has said this — for a market in logs. It does provide for a market of standing timber but not a market in logs. The difference is that a log market is a key component in ensuring access for value-added manufacturers and in ensuring a flow of wood supply to mills. A market in standing timber will not do that.

Now, there are references, as the minister has pointed out, in the various bills to log markets. But there are no requirements established that I can find to ensure that log markets are transparent and at arm's length from tenure holders; that bartering logs is prohibited; and that packages put up for sale are accessible, including that the packages offer a variety of volumes, sorts and grades to meet processor requirements.

On first glance it appears that the structure set out in the bill is ripe for manipulation — for instance, in relation to the reporting of information. Also, surrogate bidding is not precluded. There don't seem to be any methods by which surrogate bidding can be prevented under this legislation.

There will be other particular issues that I'll be raising at committee stage with reporting requirements. Those concerns are that licensees must only report volume of timber, not the species. There are also issues that I will raise regarding high-grading. There's an ambiguity on whether the past practice of allowing companies to provide cost estimates rather than actual cost data is permitted or not.

This is the technical bill, and those will be the areas I will be exploring at committee stage.

P. Bell: I just wanted to take a very, very few moments to congratulate the minister for the good work that he has done in the development of this bill.

In a previous life I worked in the small business forest enterprise program which, of course, this particular bill replaces. I certainly found it somewhat restrictive in terms of my ability to function in the industry, to actually develop new opportunities in the industry.

There were limited amounts of fibre available. There were restrictions around it that didn't appear to make a great deal of sense. I think moving to this new model of the B.C. timber sales program, the design and structure of the program will certainly give not only the minister but the ministry the flexibility to create opportunities for people that will actually allow for growth in the industry. In my view, that's what this is all about — actually creating opportunities for new entries in the business and for new types of businesses to form.

Certainly, this province is going to continue producing dimensional lumber in a big way. I'm sure it always will. But there are tremendous opportunities in terms of structural building systems, in terms of engineered wood products, in terms of stress-rated lumber and all those kinds of components that can add value to what we ship. What the minister has done today is provide other sources of fibre to allow new entries to the marketplace, and I think that's extremely important. I think he should be congratulated for his good work.

I just wanted to touch on his comments, as well, with regard to the export of different wood products, and I agree that something needed to be done in this. The old legislation was put forward many, many years ago and is clearly outdated. There are different types of products that people have created loopholes for to ship across the border, and I don't think that's appropriate. I do think there is a role to move a product across the border — some unfinished building product. He's given himself the flexibility of doing that, and I think that makes a tremendous amount of sense.

Just to sum up, this is one more of about four or five critical steps to the revitalization of the B.C. forest industry. It's a significant one, and I certainly think that people 20 and 30 years from now are going to be able to look back at the opportunities that this minister has created in the business through this piece of legislation and really recognize that it's a pivotal turning point for the B.C. forest products industry.

Hon. M. de Jong: Thanks to the member for Prince George North and the Leader of the Opposition for their comments.

The member from Prince George is kind in offering his observations about where this may lead — where we hope it leads — and indeed he hits the mark when he talks about the opportunities that we believe this is going to represent moving forward.

Now, it's not going to happen overnight. He knows and many members of the House know it's a complicated business. Right now it's a pretty tough business to make a living at, particularly where lumber prices are and some other challenges that we are facing on the marketing end of things with respect to our largest market. Having said that, this does represent a significant change in philosophy. It says to people: "We want you to have access to fibre." I think I said in my earlier remarks that fully 75 percent of the fibre in British Columbia tends to be captured in long-term renewable tenures.

When we are done this process — and the member from Prince George correctly points out this is a multi-faceted approach to restructuring and revitalization, combined with some of the other things we are doing and changes we are making — the amount of fibre that is controlled via long-term replaceable tenures will over time drop closer to 55 percent and, I think, ultimately closer to 50 percent. That's a lot of additional fibre out there in the marketplace for people to access on a shorter-term basis.

Now, the Leader of the Opposition made some comments — based on, I think, information and advice she has received and credited to a particular agency — around concerns that relate to things like the variety of tenures that might exist or be offered. I think that is a legitimate point. There are questions and, I think, concerns that the additional fibre being offered through the timber sales program be available — or accessible is probably the better word — to a number of different players — that we be innovative. That is something the member from Prince George has been…. When I say preaching, I don't mean that in a derogatory way. He has been urging, along with other members in this House, a degree of innovation.

The timber sales program, if we operate it in the way that I would like to see it operated, will afford us an opportunity to practise that innovation. Even in the way we deliver the program, I think there are some opportunities here to do some novel things.

Bill 27 is, as the Leader of the Opposition said, a technical bill, but the philosophy behind it is important. It does represent, I think, a seminal departure from where we have been. I think it's necessary, and I think it's justified. One of the reasons I say that is, despite the positive or good intentions that motivated the creation and operation of the small business forest enterprise program, you could argue that it has enjoyed marginal success. You could also argue, as I would, that that is not entirely the fault of the program itself, but the fact that structurally our allocation of tenure did not allow for the achievement of the objectives that I think were at the heart of the small business forest enterprise program.

Changing the structure is part of what is required in my view. Changing the delivery model is part of what was required, but also changing how we hold the currency which lies at the heart of our forest industry — and that is access to the resource itself — is a fundamental part of this. This bill, combined with others that we have debated and are yet to debate, addresses all three legs of that stool. I believe it does represent, as the member from Prince George mentioned, a seminal departure and the creation of the kinds of new opportunities that our industry requires if it is to prosper in the way that it needs to, in the way that this government wants it to and all British Columbians require it to.

Hon. M. de Jong: I move that the bill be referred to a Committee of the Whole House for consideration at the next sitting after today.

Bill 27, Forests Statutes Amendment Act, 2003, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. M. de Jong: I said as part of my comments with respect to Bill 27 that the forest revitalization package that we introduced just over three weeks ago and which has driven the legislative initiatives we are now dealing with had at its heart or at its core three principles.

The bill we've just talked about deals with the third of those principles. Well, it deals with two of them: creating new opportunities but also our desire to ensure that people receive a fair return for the sale of the resource they own — and British Columbians own the majority of our forests in B.C. I think we should all in this House be prepared, where we embark upon change, to acknowledge the significance of the change.

This represents a fundamental rewrite of some key provisions of the statute that largely determines how our forests, our most valuable resource, are managed. Members of this House have heard me make the argument in the past — happily, I believe — that the vast majority of my colleagues in this House agree that these are changes that are required. As we go through them — and we will in this debate, will in the committee stage examine them mechanically, examine them insofar as the implications for people in British Columbia in forest-dependent communities — I think we should acknowledge that what we are doing here is addressing policy issues that were decided in many cases three, four or five decades ago. What we are doing is responding to the change that has occurred around us.

In making these changes, we are not necessarily condemning either the original public policy choice or those who made it. What we are doing is acknowledging that the world has changed around us. The circumstances that guided the introduction of the original appurtenancy provisions and mill processing requirements and cut control requirements have changed. The competitive advantage we enjoyed in British Columbia 20, 30, 40, 50 years ago, which allowed us the luxury of managing our forests in the ways our Forest Act has provided for, all these years and all these decades, has largely disappeared.

I don't like saying that. I don't think anyone in this House likes saying that our competitive advantage has steadily disappeared, but it has. It has done so for a variety of reasons, some relating to decisions we have made in British Columbia and some relating to circumstances largely beyond our control, changed circumstances the world over. I like to say — and I'm sure members are tired of hearing it — that from a competitive point of view, I defy any member of this House to suggest with a straight face that 15 years ago they would have predicted we would be competing for market share with products from Latvia.

Hon. M. de Jong: The member for Nanaimo says his crystal ball told him that 25 years ago, but it was probably when he was backpacking across that part of the world — lost.

Those are changes that could not have been foreseen when these original policies were introduced. The situation within British Columbia has changed dramatically — really dramatically. There are more of us who want to share in this resource that we own — first nations, who have historically been shut out but who

look at this resource that surrounds them where they live and say: "We want to be involved."

Governments and Forests ministers have said that's a good idea and we should facilitate that, but it has been modest progress at best. Part of that relates to the allocation of tenure. I talked to that with respect to Bill 27. Good intentions have been there for a number of years. The ability to follow through on those good intentions is very much limited if governments are unprepared, as they have been to this point, to deal with the larger issues around tenure reform and tenure allocation.

My colleagues in this House have said we want to create new opportunities, and in order to do so, we are going to have to address some of those longstanding policies that perhaps made sense in 1950. We're not sure they make as much sense or any sense in 2003. I'll give you an example, and it goes to the heart of what motivates the introduction and, hopefully, passage of this legislation.

I did not grow up working in the woods, though my father earned his living, in part, from servicing the forest sector as an electrical contractor, so I was a member of a forest-dependent family. Ever since I was a kid I can remember hearing a couple of mantras, if you will, when people talked about forestry. They talked about how we've got to move away from exclusive dependency on primary breakdown facilities, we've got to move into value-added and we've got to maximize the value of the timber we harvest in B.C. I don't think anyone would disagree with the logic of those statements — no one I've talked to.

I've talked to a heck of a lot of British Columbians over the last couple of years about forestry matters, and I've yet to see someone stand up and say: "No, no, that doesn't make sense." What people say is that in a fully integrated industry, primary breakdown is always going to be part of that, and I agree. We've got some of the most efficient mills in the world, and that's going to remain. What we have to do, of course, is ensure that we always have the most efficient mills in the world. When I say that, no one disagrees.

When I say that we need to maximize the value we get out of the timber we harvest and that we have to promote an enhanced value-added sector, everyone nods their heads and says: "Yeah, well, that makes sense. Get the right log to the right processing facility." Yet we have these longstanding policies enshrined in a statute. It's not some policy behind some bureaucrat's desk that we apply selectively. We have as law in this province that a particular log harvested in a particular area must go to a particular mill and become a 2-by-4. I cannot reconcile those two notions. I cannot reconcile the argument that says we want to maximize the value of the timber we harvest in British Columbia with the notion that if you harvest a log in a particular area, it must go to a mill and become a 2-by-4.

As someone in the Cariboo told me one time, if that log has a higher value 30 kilometres down the road as a log-home component, for God's sake, why wouldn't we send it to that facility 30 kilometres down the road? It makes sense to me. Yet we have maintained policies for decades in this province that preclude that from happening. This bill will change that.

As utterly convinced as I am that it is the right thing to do, I am also compelled to acknowledge that that causes some people a great deal of anxiety. Though I have tried to the best of my ability, there are people out there — some, I believe, deliberately; others, I think, mistakenly — convinced that what we are doing by virtue of these amendments contained in Bill 29 is swinging the border open so that all of our logs can be exported unprocessed out of British Columbia. That is wrong; that is false. If people are saying that, they are either misinformed or they are deliberately misleading British Columbians.

What we are talking about is improving the flow of fibre within British Columbia. We are maintaining the restrictions that exist at the border which prevent raw logs from being exported off of Crown land in B.C. outside of British Columbia.

Similarly, Mr. Speaker, I think that the right thing to do, given some of the commentary that I hear taking place behind me, is to suggest that given the time, I adjourn the debate and reserve my right to resume participation in this debate. I so move.

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	YEAS — 37

Falcon	Coell	L. Reid
Hawkins	Whittred	Hansen
Bruce	Wilson	Hagen
Plant	Clark	de Jong
Nebbeling	Jarvis	Orr
Harris	Belsey	Bell
Chutter	Mayencourt	Trumper
R. Stewart	Christensen	Bray
Les	Locke	Bhullar
Wong	MacKay	Cobb
K. Stewart	Sultan	Hamilton
Kerr	Manhas	Hunter
	Masi

	NAYS — 1

	MacPhail

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY