Hansard -- Monday, May 5, 2003 p.m. -- Vol. 15, No. 2 (HTML)



CONTENTS

	Routine Proceedings
		Page

Tributes		6465
	Rick Casey Hon. G. Cheema

Introductions by Members		6465

Introduction and First Reading of Bills		6465
	Advanced Education Statutes Amendment Act, 2003 (Bill 35) Hon. S. Bond Skills Development and Labour Statutes Amendment Act, 2003 (Bill 37) Hon. G. Bruce Judicial Compensation Act (Bill 41) Hon. G. Plant

Statements (Standing Order 25b)		6466
	Hawkair services in northern B.C. R. Harris Partnership network for community fundraising P. Wong Anniversary of question period D. Hayer

Oral Questions		6467
	Snuneymuxw agreement-in-principle M. Hunter Hon. G. Plant B.C. Rail and P3 partnerships P. Bell Hon. J. Reid Safety of Tasers T. Bhullar Hon. R. Coleman Child care subsidy applications B. Bennett Hon. M. Coell Regulations for storage tanks R. Lee Hon. J. Murray Relocation of RCMP E Division B. Locke Hon. R. Coleman Abbotsford hospital project J. Les Hon. G. Collins

Ministerial Statements		6470
	2010 Olympic Winter Games bid Hon. T. Nebbeling

Second Reading of Bills		6470
	Cam Glass Inc. (Corporate Restoration) Act, 2003 (Bill Pr403)

Committee of the Whole House		6470
	Cam Glass Inc. (Corporate Restoration) Act, 2003 (Bill Pr403) T. Christensen

Report and Third Reading of Bills		6471
	Cam Glass Inc. (Corporate Restoration) Act, 2003 (Bill Pr403)

Second Reading of Bills		6471
	M&M Insulation Ltd. (Corporate Restoration) Act, 2003 (Bill Pr404) T. Christensen

Committee of the Whole House		6471
	M&M Insulation Ltd. (Corporate Restoration) Act, 2003 (Bill Pr404)

Report and Third Reading of Bills		6471
	M&M Insulation Ltd. (Corporate Restoration) Act, 2003 (Bill Pr404)

Second Reading of Bills		6471
	Score Resources Ltd. (Corporate Restoration) Act, 2003 (Bill Pr405)

Committee of the Whole House		6472
	Score Resources Ltd. (Corporate Restoration) Act, 2003 (Bill Pr405) R. Nijjar

Report and Third Reading of Bills		6472
	Score Resources Ltd. (Corporate Restoration) Act, 2003 (Bill Pr405)

Committee of the Whole House		6472
	Court Jurisdiction and Proceedings Transfer Act (Bill 31)

Report and Third Reading of Bills		6472
	Court Jurisdiction and Proceedings Transfer Act (Bill 31)

Committee of the Whole House		6472
	Enforcement of Canadian Judgments and Decrees Act (Bill 32)

Report and Third Reading of Bills		6472
	Enforcement of Canadian Judgments and Decrees Act (Bill 32)

Second Reading of Bills		6472
	Business Number Act (Bill 36) Hon. K. Falcon Industry Training Authority Act (Bill 34) Hon. S. Bond B. Lekstrom J. Bray G. Trumper J. Nuraney

Committee of Supply		6483
	Estimates: Ministry of Forests Hon. M. de Jong P. Nettleton D. MacKay R. Sultan M. Hunter P. Bell

Committee of the Whole House		6495
	Forests Statutes Amendment Act, 2003 (Bill 27) J. MacPhail Hon. M. de Jong

Hon. G. Cheema: Yesterday in Victoria Mr. Rick Casey began an 8,000-kilometre bicycle journey across Canada to raise awareness for mental health issues. My colleagues the members for Victoria-Hillside and for Oak Bay–Gordon Head were present at the launch.

His goal is to raise awareness, to reduce the stigma of mental illness and to promote community support for people with mental illness. This trip is his way of honouring the memory of his daughter Kyla who, at the age of 19, died of a pulmonary embolism while she was a patient in a mental health unit in Ontario. Kyla had been diagnosed with a bipolar schizoaffective disorder shortly after her sixteenth birthday.

In recognition of Mental Health Week, would the House please join me in showing support for Mr. Casey's journey.

Hon. S. Santori: This afternoon it gives me great pleasure to introduce a constituent of mine from the beautiful city of Grand Forks. With us today we have Ian Moslin. Ian attends Grand Forks Secondary School. Actually, he's here shadowing me all week as part of his CAPP program workweek — a future lawyer, as Ian has said he's interested in pursuing a career in law. At this time I would ask that the House make Ian welcome.

B. Belsey: Many of us have had the pleasure of working with Tara Marsden in communications. She's a Prince Rupert girl. Today her parents are down here, I guess checking up on her. Susan Marsden is a curator with the Museum of Northern B.C., and Jim Bird is a welder at Broadwater in Prince Rupert. I'll have you all join me in making them both very welcome.

Hon. G. Hogg: I have had the privilege to stand up twice in this House and tell all of the members and the people of this province that the Earl Marriott's senior girls basketball team was the provincial champion, and the White Rock Christian boys were the triple-A boys champion, both from the riding of Surrey–White Rock — provincial champions.

I'm proud now to say — because I've heard many of my colleagues stand up and talk about the great feats of teams from their ridings, and I'm sure they are wonderful feats — that last week Basketball B.C. named the Earl Marriott's senior girls triple-A team as the team of the year in British Columbia. I hope the House will join me in sending our congratulations to those fine women.

Hon. S. Bond presented a message from Her Honour the Lieutenant-Governor: a bill intituled Advanced Education Statutes Amendment Act, 2003.

Hon. S. Bond: This bill amends a number of statutes administered by the Ministry of Advanced Education in order to reduce red tape and regulatory burden for public post-secondary institutions. In addition, the bill includes miscellaneous and housekeeping amendments to streamline administrative processes. These amendments will update the legislation governing public post-secondary institutions to more accurately reflect current practice. The amendments will also streamline approval processes in a number of areas, including designation of degree programs.

Finally, the amendments will implement the recommendation of the core review and deregulation task force to remove the requirement that government appoint members to university senates and university foundations. These amendments will enable the ministry to contribute to government's commitment to reduce red tape and regulatory burden in British Columbia.

I move that the bill be placed on the orders of the day for second reading at the next sitting of the House after today.

Bill 35 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. G. Bruce presented a message from Her Honour the Lieutenant-Governor: a bill intituled Skills Development and Labour Statutes Amendment Act, 2003.

Hon. G. Bruce: I'm pleased to introduce this bill today. This bill amends the Workers Compensation Act and the Employment Standards Act. In meeting our new-era commitment to a more responsive workers compensation system, we are making changes to ensure that surviving dependents are provided with fair

compensation. The changes include providing a lifetime monthly benefit to surviving partners under 40 years of age who have no children, increasing the amount of Canada Pension Plan survivor benefits a surviving dependent can keep and increasing the age limit for dependent children eligible to receive benefits. We're also ensuring that employees and employers will have the opportunity to use the services of lay advocates if they wish.

In the Employment Standards Act more steps are being taken to ensure that employment standards are fair, effective and enforceable for all B.C. employees and employers. This bill strengthens protection for employees, adds flexibility, and repeals outdated and unused parts of the Employment Standards Act.

In addition, government is making changes to the rules on employing children under 15. The changes to child employment rules were developed and refined in consultation with parents and employers.

I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 37 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. G. Plant presented a message from Her Honour the Lieutenant-Governor: a bill intituled Judicial Compensation Act.

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

Hon. G. Plant: I'm pleased to introduce Bill 41. Bill 41 moves the compensation provisions for Provincial Court judges and judicial justices of the peace from the Provincial Court Act to the new Judicial Compensation Act. The new act also changes the time lines and makes modifications to two judicial compensation processes: the judicial compensation process and the judicial justice compensation commission process. The time lines of these processes will be brought into line with government's budget and legislative cycles, leading to a less complicated implementation of the commission report recommendations.

Additional legislative amendments will improve these processes by adjusting time frames and having two commissions running simultaneously. Government staff time will be better utilized, and allowing the commissions more time to conduct their reviews will result in better products. I will elaborate further on the details of these amendments at second reading of the bill.

I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 41 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

R. Harris: Recently in the media there have been many stories around the aviation industry, and most of them have been pretty negative. Certainly, the experiences of Air Canada have left a lot of northern and rural communities wondering what is going to happen to them when it comes to air service.

Today I want to talk about a small regional carrier that has carved out a niche market that seems to be working well for everyone. Hawkair in Terrace started out in 1994 flying a Bristol Freighter. This marked the start of seven years of servicing remote mining camps through northern B.C. They grew from a staff of four to 22. But as we all know, as mining disappeared from this province, so did businesses like Hawkair. By 1999 they were back down to four staff.

This group of business people had a decision to make: change or disappear. They had a concept for delivering passenger service, a concept that would have a regional carrier situated in the north and a schedule that would be designed to reflect the best interests of passengers originating from the north. They had a concept that had planes, jobs, maintenance and head offices situated in the communities they serviced.

I'm glad to say that they took this gamble. In September of 2000, after achieving Transport Canada certification, they launched the first flight of their passenger service in a modern turboprop. In less than three years since they carried their first passenger, Hawkair has added two additional passenger planes and is now providing services to five cities in northern B.C. I know the member for Peace River South certainly enjoys the service he now receives in Dawson Creek. They employ more than 90 people company-wide, and about 60 of those are located in Terrace. Their payroll alone in Terrace is $1.7 million, and on top of that, they've purchased $800,000 worth of local goods and services. That's growing each year.

More importantly, they've opened up the north for professional employment in maintenance, operations, safety, management, administration, technical records and other disciplines. Prior to Hawkair establishing its passenger service, the opportunities for people to work in these fields of aviation were largely limited to southern B.C.

The Hawkair experience is still challenging. The history of regional carriers is one that certainly has no guarantees, but if we are going to reverse the trend of depopulation in the north, Hawkair is one example of some of the things that can be done to achieve this.

P. Wong: I'm pleased to report to the House that last week my colleagues from Burnaby-Willingdon and Vancouver-Fraserview joined me at an event held by the Vancouver Oakridge Lions Club and the Better Community Partnership Outreach Network Also in attendance were Mr. Justice Wally Oppal; Mr. Dirk Ryneveld, the police complaint commissioner; Vancouver police Chief Constable Jamie Graham; and Dr. Tony Gill, president of South Vancouver community policing centre.

The dinner was the first event of a series of unique and innovative collaborations that will be occurring with organizations throughout Vancouver-Kensington as well as many others. Over the last two years, many groups that provide valuable services in my riding have approached me about their need for more financial resources. During discussion with my colleagues and other concerned citizens in the riding, several caring and passionate individuals came to me with the idea of creating a network to match groups with financial resources with charities and non-profit agencies in need of those resources.

My office has taken a great number of calls from interested residents and the media. Many groups in the riding have expressed interest in a Better Community Partnership Outreach Network, and we have discovered a great amount of community support for the network and its goals. I am very proud of the Vancouver Oakridge Lions Club for coming to the table and taking the initiative to organize this first event, which has thus far raised $5,000 for the South Vancouver policing centre.

This week I'm going to present a total of seven scholarships to two high schools, John Oliver and Sir Charles Tupper. Six of them are $500, and one of them is $200. Over the weekend there were inquiries from individuals and organizations also expressing interest in providing financial incentives to the elementary schools in the Vancouver-Kensington riding. Through the network, not only will we be working together for the betterment of our community, but we will also be taking a real leadership role in helping each other to strengthen our civil society. It's my hope that other networks similar to the Better Community Partnership Outreach Network will emerge in other communities across the province.

D. Hayer: Mr. Speaker, I would like to bring to your attention that this House recently passed a historical date in the past 100-plus years in this Legislative Assembly. That date was March 5, the thirtieth anniversary of the first-ever question period.

The first question was asked by one of the most memorable B.C public figures to ever sit in this House. After 20 years as Premier, W.A.C. Bennett, in his unaccustomed role as opposition leader, got to his feet and asked the Premier of the day to withdraw several bills related to the new expenditures. Making the day even more historic was that the first question ever asked was ruled out of order.

Nonetheless, the first question period was a momentous occasion in opening up the government to the people of British Columbia. I am extremely pleased that we, too, are making our mark with a new era of open, accessible and accountable government, whether it is with the formation of the citizens assembly, fixed election dates, fixed budget dates, open cabinet meetings, active legislative committees or public written questions.

We are committed to ensuring that British Columbians have open access to the government. I, too, am committed to ensuring that I am easily accessible. Each year I meet with thousands of constituents, many community groups, businesses and social organizations in my constituency of Surrey-Tynehead office, in Victoria and at any number of events, festivals and functions that I attend each week. I meet with people from all walks of life, whether we share the same view or not. I am committed to bringing their voices to the government and to the Legislature. People can also share their views with me by dropping by without an appointment at one of my regular monthly coffee meetings, which take place at the same time and same location at the ABC Country Restaurant until April of 2005.

M. Hunter: About a year ago in the referendum on treaty negotiations, British Columbians voted overwhelmingly that hunting, fishing and recreational opportunities on Crown land should be assured for all British Columbians. Today critics of the Snuneymuxw agreement-in-principle have argued that the government is not being consistent and has, in fact, allowed for a race-based fishery to be created in that AIP.

Will the Minister Responsible for Treaty Negotiations clarify what the government is doing with regard to fisheries in the negotiation of treaties with B.C.'s first nations and whether the Snuneymuxw agreement-in-principle is a model for other negotiations?

Hon. G. Plant: I think the Snuneymuxw AIP is fully consistent with the third question in the referendum — that is, that hunting and fishing and recreational opportunities on Crown land should be ensured for all British Columbians.

There's one important respect in which Snuneymuxw is unique, or nearly unique, and that is that the Snuneymuxw first nation comes to treaty negotiations with existing treaty rights under a Douglas treaty. What the AIP does, assuming it leads to a final agreement, is move us away from the uncertainty that exists

with respect to those treaty rights into a world where there is certainty about how those rights can be exercised.

I share the concern, and government shares the concern that many user groups have expressed with respect to Canada's need to develop an overall long-term vision for the fishery and the fish resources in British Columbia. That's why my colleague the Minister of Fisheries and I, under the Premier's leadership, have been working with the commercial and recreational industry since late last year to develop the strategy for engaging the federal government in a process that will help ensure that fish resources are managed in a way that is sustainable and which provides fair and equal opportunity for all user groups. The Premier has written to the Prime Minister to seek his participation in that initiative, and I will certainly keep the House informed as matters proceed.

P. Bell: My question is for the Minister of Transportation. Over the weekend my colleague from Prince George–Mount Robson and I had the opportunity to attend the North Central Municipal Association conference in Prince George. It was a great opportunity to discuss some of the common concerns and initiatives that are going on in the north. One of the more prominent issues that was discussed was that of B.C. Rail.

The mayor of Mackenzie, Tom Briggs, was specifically concerned with the role a P3 partner might play in the economic development of the north and what vision a P3 partner would have in that economic development. Can the minister tell us and the people of Mackenzie what the expected benefits of a P3 partner would be to B.C. Rail and how that might play in the economic development of the north?

Hon. J. Reid: Thank you for the question. It's very important to bring clarity around the process of what we're doing with B.C. Rail. We want to see investment in the north. We want to see advantages to the users of the rail and to the communities along the rail line, which, of course, are the employees of the industries.

What we are doing is looking at what the public good is — the questions around the public good. We're using the mayors' council and the shippers' council to provide input into that. We're then going to do a request for expressions of interest and then a request for proposals. In that request for proposals we are going to take those concerns we've identified and put them out there to interested proponents to tell us how they would answer the questions of how they would ensure long-term sustainability of the rail system, how they would ensure there's going to be access and competitive rates, how they would ensure there are going to be benefits to the industries and the communities.

At that point, then, government gets to evaluate those different proposals. We do believe there are exciting opportunities for growth, for economic development. As we work through this process, we'll get to see what vision is out there, and then government gets to choose.

T. Bhullar: My question is to the Solicitor General. Approximately one week ago the RCMP had to use a Taser to subdue a suspect who subsequently died of a heart attack. Last year the Vancouver city police used one of the same devices on Daniel Matheson, who subsequently died of a heart attack. The device I speak of is a Taser. These devices are prohibited under the Criminal Code of Canada, Governor General's order No. 3. Can the Solicitor General please tell the House what legal authority the police have for carrying such devices?

Hon. R. Coleman: First of all, I can't comment on an individual case, but I can tell the member that there may be other health concerns related to the use of a Taser in the two instances the member refers to.

There are two areas. Probably, the common law of a constable in the use of force would be one, but more so is that the Police Act regulations allow us to deal with use of force for the regulations under the Police Act in the province.

The director of police services can approve use-of-force equipment, and that's how the Taser was approved, but not just in a vacuum. In 1998, in December, the Ministry of Attorney General allowed a six-month test with the Victoria police department, which was conducted. The Taser was used 14 times during that test — 13 of them successfully and one where the Taser failed to operate. Prior to approving the Taser, we also had our police services division review Taser use and its use elsewhere in North America and worldwide with regard to statistics.

The Taser is a non-lethal alternative to deadly force. In actual fact, the use of a Taser is the last choice before actually using a firearm, in most cases, with regard to the use of force. Police agencies and correctional facilities do use the Taser effectively, and our understanding is that it has had very good and positive use within law enforcement to date.

The authority is with the Police Act and the regulations under the Police Act — and other issues relative to the member. I am comfortable, having spoken to police services and having discussions with regard to the Taser, that it is being properly used in our environment.

B. Bennett: My question is to the Minister of Human Resources, and it's in regard to the child care subsidy. The Kootenay region is a very large and diverse region, and it's made up of many, many small communities and a few larger regional centres. Some Kootenay parents have expressed concern that in going to apply for and extend their child care subsidies, they may

have to physically travel to those larger communities to do that. I'm wondering if the minister today can just assure the House that there will be no interruptions in child care subsidy for those Kootenay parents.

Hon. M. Coell: I can assure the member that there won't be, and I'm pleased to take the opportunity to clear it up if there is a confusion. What we've done is move to a centralized service in the Kootenays — Golden, Sparwood, Cranbrook — so parents will now be able to phone a toll-free number to apply for child care subsidy or to renew it. That starts today, so any parents in that area or providers can have access to that number. They won't have to go to our offices. They won't have to make appointments. They can do it from their own homes. That, hopefully, will help with looking after children and also give better service to those areas.

R. Lee: My question is to the Minister of Water, Land and Air Protection. Last year I asked the minister about what the government was doing to prevent spills such as the one that happened at the Chevron refinery in Burnaby North. Protecting our groundwater from contamination is very important for the health of my constituents and their environment. Can the Minister of Water, Land and Air Protection explain what standards are in place and what government is planning to do to ensure that oil storage tanks are safe?

Hon. J. Murray: I would like to acknowledge the interest that the residents of Burnaby North have in this issue since an MTBE spill at the Chevron refinery a few years ago. The member for Burnaby North has provided a leadership role in bringing together the residents, the business, the regional representatives and ministry staff and satisfying some of the concerns of the residents.

In terms of the standards in British Columbia, we have the Waste Management Act. That act identifies the required result, which is no discharge of substances to the environment that pose a risk to human health or the environment. The act also describes the kind of enforcement that needs to happen should there be an accident and the kind of cleanup standards. We don't have a prescriptive standard for how to design a tank, but companies do have codes of practice and guidelines made available by the ministry that they can follow. The Canadian Council of Ministers of the Environment published an environmental code of practice for aboveground storage tanks in the mid-nineties, and that code is available to companies as they design and build their storage tanks.

I believe that we have an environmental management approach that is appropriate in British Columbia and that the system is effective in preventing spills and damage to the environment or threats to human safety.

B. Locke: My question is to the Solicitor General. I understand that the RCMP is looking to relocate E Division. The relocated headquarters could bring as many as a thousand jobs to the community they decide to call home. I'm sure that any community would appreciate having the RCMP headquarters in their boundaries. Can the Solicitor General tell us what the RCMP is looking for when they're considering the options for relocating E Division?

Hon. R. Coleman: It is a fact that E Division headquarters is due to move in the next couple of years and that somewhere between 900 and a thousand-plus jobs will be relocated out of E Division in Vancouver into a new world-class campus for policing somewhere in the province, more than likely on the lower mainland.

The biggest issue with regard to the relocation, members should know, is that the RCMP have said that part of the criteria is that they will move E Division to a community that has a long-term contractual commitment to the RCMP as their police force. The intent is to actually move it to a contract community where the RCMP are policing within that community. That is part of the selection process, which is the thing that really determines where this organization will go.

As we move forward with this, though, we're looking at opportunities to build on top of this campus world-class facilities with regard to policing and things like issuance of the Organized Crime Agency and what have you as we build the campus together sometime in the next couple of years.

J. Les: With respect to the last question, just on the record, I want to assure the Solicitor General that Chilliwack is ready, willing and able to assist.

My real question is to the Minister of Finance. Partnerships B.C. has been engaged in a process now for a number of months to identify a private sector partner to build and operate the new hospital in Abbotsford, together with the new cancer clinic that is to be built with that facility. The people of the Fraser Valley are excited that this new project will be built to provide health care long into the future to the residents of the growing Fraser Valley.

However, they have some questions and possibly some concerns about the new and innovative approach we're taking to producing this facility. The Fraser Valley regional hospital district is providing $71 million as part of the financing of this project. The residents of the valley would like the Finance minister to tell us today what measures are being taken to ensure we get the very best possible….

J. Les: What measures are being taken by Partnerships B.C. and the Ministry of Finance, along with the

Minister of Health, to assure that we get the very best possible facility for the taxpayer's dollar?

Hon. G. Collins: There are a number of things. First of all, the regional hospital district is contributing almost a third of the cost of the construction of this facility. It's important that they be involved in the process to make sure that we do get best value for the citizens that both we represent but, as well, that they represent.

The Minister of Health has been talking to the local communities, as have I. There will be a committee that will involve the local leaders — MLAs, etc., — but also the two members of the regional hospital district. Abe Neufeld as well as George Peary will be part of that process and sit on that committee to make sure that we get the best value and the best health care services for the people in the Fraser Valley who have been waiting a long, long time for this project.

I think that's great news for the local community, and I think the local community and the local taxpayers can rest assured that there will be great local involvement in making sure we get the best value for the health dollars we spend in that community.

In just 58 days the International Olympic Committee will gather in Prague. They will make the decision on the winning bid to host the 2010 Winter Games and Paralympic Games. It is a day and an announcement that we have worked towards for several years.

Last Friday, May 2, our bid reached an important milestone. This is on the road to the decision with the release of the IOC evaluation report. This report is the final detailed response before the July 2 vote. It gives us a final opportunity to further strengthen our bid based on their recommendations and suggestions.

In March British Columbia welcomed the IOC evaluation committee to Vancouver and Whistler. Our 2010 bid team gave an impressive presentation during their stay. The Premier led the provincial representation during the visit and played a critical role in assuring the IOC that British Columbia recognizes the proposal and has the full backing of the province. Our guests were very pleased with what they saw. They felt excellent venues in a spectacular setting and enthusiastic residents who very much would want to host the 2010 Games.

I think it is fair to say that we had a strong bid, but after the release of the report, we can truly say that our bid is even stronger. The IOC commented on the strengths of many components of the bid. It is an inclusive bid, and the IOC noted one thing in particular, and that was the involvement and participation of our first nations.

The report said our financial plan is sound and our guarantees are strong and noted that the independent office of the auditor general had said the same. The report also puts to rest the concerns about our bid transportation plan, saying it is logical, well thought out, and should provide for a high level of service.

The report noted that our plan to hold opening and closing ceremonies indoors would be a historic first for the IOC. As well as the MLA for West Vancouver–Garibaldi, I must say I was personally very pleased and impressed that the bid staff seized upon the opportunity to hold medal ceremonies in Whistler after the evaluation commission asked about that possibility. That means the Olympic spirit and pride will be shared among communities.

All in all, we can all be very pleased with the report of the IOC evaluation committee and very proud of our 2010 Olympic bid team. It provides great information as a report and will influence the IOC final decision on the host city for 2010. When in Prague, it will vote on July 2.

This bill will restore Cam Glass Inc. to the registry of companies so that the company can be joined in litigation arising with respect to a period before the company was struck from the registry.

T. Christensen: By leave, I move that the bill be referred to a Committee of the Whole House to be considered forthwith.

Bill Pr403, Cam Glass Inc. (Corporate Restoration) Act, 2003, read a second time and referred to a Committee of the Whole House for consideration forthwith.

The House in Committee of the Whole (Section B) on Bill Pr403; J. Weisbeck in the chair.

T. Christensen: I move the committee rise and report the bill complete without amendment.

Bill Pr403, Cam Glass Inc. (Corporate Restoration) Act, 2003, reported complete without amendment, read a third time and passed.

This bill will restore M&M Insulation Ltd. to the registry of companies, which will in turn enable the company to be added as a party to ongoing litigation with respect to events arising before the company had been struck from the registry.

T. Christensen: By leave, I move the bill be referred to a Committee of the Whole House to be considered forthwith.

Bill Pr404, M&M Insulation Ltd. (Corporate Restoration) Act, 2003, read a second time and referred to a Committee of the Whole House for consideration forthwith.

The House in Committee of the Whole (Section B) on Bill Pr404; J. Weisbeck in the chair.

T. Christensen: I move the committee rise and report the bill complete without amendment.

Bill Pr404, M&M Insulation Ltd. (Corporate Restoration) Act, 2003, reported complete without amendment, read a third time and passed.

R. Nijjar: By leave, I move that the bill be referred to a Committee of the Whole House to be considered forthwith.

Bill Pr405, Score Resources Ltd. (Corporate Restoration) Act, 2003, read a second time and referred to a

The House in Committee of the Whole (Section B) on Bill Pr405; J. Weisbeck in the chair.

R. Nijjar: I move that the committee rise and report the bill complete without amendment.

Bill Pr405, Score Resources Ltd. (Corporate Restoration) Act, 2003, reported complete without amendment, read a third time and passed.

The House in Committee of the Whole (Section B) on Bill 31; J. Weisbeck in the chair.

Hon. G. Plant: I move that the committee rise and report the bill complete without amendment.

Bill 31, Court Jurisdiction and Proceedings Transfer Act, reported complete without amendment, read a third time and passed.

The House in Committee of the Whole (Section B) on Bill 32; J. Weisbeck in the chair.

Hon. G. Plant: I move the committee rise and report the bill complete without amendment.

Bill 32, Enforcement of Canadian Judgments and Decrees Act, reported complete without amendment, read a third time and passed.

As the Minister of Competition, Science and Enterprise explained during the last reading, Bill 36, the Business Number Act, will provide businesses with a single identifying number to use in their interactions with multiple levels of government. Passage of the

Business Number Act will simplify the relationship between business and government by removing red tape and reducing the time it takes businesses to comply with government requirements.

The single business number initiative directly reflects a number of the British Columbia government's new-era commitments — such as, it restores British Columbia as a world leader in electronic government; it will cut the cost of paper flow, forms and information as much as possible, making the cost of doing business in British Columbia much more cost-effective; it will work to create a competitive climate for business and investment in British Columbia; and it will help contribute significantly towards our goal of reducing the red tape and regulatory burden in British Columbia by one-third in our first three years. Specifically, passage of the Business Number Act will reduce government red tape for businesses both large and small and make British Columbia a better place to do business. That's the bottom line.

This act will incorporate stringent security provisions to protect confidential information and will continue to respect the privacy of British Columbia's business community to ensure that it is not in any way compromised. Partners of the single business number initiative adhere to strict privacy legislation here in British Columbia.

Finally, Bill 36 demonstrates this government's commitment to an efficient and financially sound way of doing business. The Business Number Act establishes the adoption of the business number as the common business identifier for British Columbia businesses, based on a number that is issued by the Canada Customs and Revenue Agency, otherwise known as CCRA.

The act also establishes the information system known as the B.C. Hub, which is to be developed by the single business number initiative to support the business number processes. This initiative provides businesses with a single identifying number instead of multiple numbers and a single window through which information can simultaneously be registered with multiple levels of government. The single business number is used as a common business identifier in selected programs in New Brunswick, Nova Scotia and Ontario. Manitoba is currently developing a common business number identifier project using the federal business number.

Without this legislation, businesses will continue to have various numbers they are forced to use when accessing different levels of government and services, and business registration will continue to be complicated and time-consuming. Our Ministry of Competition, Science and Enterprise has worked cooperatively with the corporate privacy and information access branch of the Ministry of Management Services on this legislation with respect to the all-important privacy issues.

I would like to read into the record a quote from Chris Norman, executive director of the corporate privacy and information access branch, in a letter to our ministry dated April 15, 2003.

The single business number initiative is a key e-government initiative and has been developed in partnership with the province's chief information office and also with the CCRA, Ministry of Provincial Revenue, Ministry of Finance and the Workers Compensation Board. Other ministries and program areas have indicated their interest in future participation in this initiative. Local government has also been supportive of this initiative.

British Columbia businesses are strongly in favour of this legislation and look forward to a streamlined method of complying with government regulatory requirements. Bill 36 provides evidence that this government is committed to assisting British Columbia business to succeed. Passage of the Business Number Act will simplify the relationship between business and government. The initiative will create a competitive climate for business and investment in the province and is one more building block to restoring British Columbia as a world leader in e-government.

Hon. K. Falcon: I move that the bill be referred to a Committee of the Whole House to be considered at the next sitting of the House after today.

Bill 36, Business Number Act, 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. S. Bond: Over the past year and certainly longer than that, a great deal of attention — both media and otherwise — has been devoted to the subject of Canada's and British Columbia's impending skills shortages. It seems we are faced with a critical shortage

of skilled workers brought on in large part by an aging employee population. It becomes increasingly clear that in order to continue to prosper as a province, we need to explore new ways of producing the skilled workers that B.C. needs and wants.

At this point of the system we certainly have almost 16,000 apprentices in British Columbia, and thousands more students are enrolled in entry-level trades training at public post-secondary institutions. When we look at the creation of a new system, it is both complex and time-consuming. I can assure the members of this House that this has generated much debate both within our caucus as we've discussed the options and also within the province.

As a government, we need to ensure that any model — any new system — is flexible and responsive and that it meets, first and foremost, the needs of students and learners in British Columbia and that it responds in a timely and flexible way to the needs of industry. We know that in order to have our economy prosper, as we know it will, this system must be done in a thoughtful and progressive way.

The proposed system this bill represents will better align and match opportunities because it will be able to respond much better to the shifts in the job market, creating more opportunities for workers and students.

We have looked at a number of options around modular training and competency-based credentials. In fact, in the province as we are creating and looking at the legislation today, we have 16 pilot projects that will test practical applications for new approaches to industry training. In essence, we want to look at how we can do things differently to enhance the current system, and we want to try those out as we work through this process. Again, these pilot projects will help us develop a system that will not only meet industry needs but encourage people — young people in this province — to consider the trades as a viable and important career option.

It's been unfortunate that as we've gone through this process, there has been much information and some misinformation. Many who are not fully informed question any change at all to the system. I want to make it perfectly clear that the system we develop will not see the quality of training in this province compromised. Enforcement of safety standards and consumer protection in compulsory certification trades, which we currently have, will be maintained. We are not going to dilute the trades. In fact, current standards will be maintained, including the national Red Seal standards.

We are also proposing, where it makes sense, to work through industry and with industry to determine and expand the number of opportunities and credentials that are available to workers in this system. Before I speak specifically to the contents of the bill, I want to assure apprentices who are currently in the system that their training will not be interrupted. We are working on options to ensure that college-based training and examination services are maintained and, in fact, that expanded opportunities are available generally throughout the regions of this province.

The bill today will repeal and replace the Industry Training and Apprenticeship Act, which established ITAC, the Industry Training and Apprenticeship Commission, in 1997. At that time the need was identified for an industry-driven training and apprenticeship system. Unfortunately, and despite its best efforts, ITAC was unable to implement the changes necessary to fulfil its mandate. Government's subsequent review of the industry training and apprenticeship system revealed a number of problems. I want to articulate some of them for you today. Some of them are very specific, because as we look at legislation to create a new model, it's important to recognize the problems that the system was encountering.

We have training in the province called entry-level trades training. One of the things we discovered was that there was incredible variability of entry-level trades training duration. Two programs may offer the same training credit and yet differ in currency, quality and length of time. A significant concern was the lack of credit that entry-level trades training courses provided toward apprenticeship training. A learner may take a program of up to 12 months in length without any assurance that industry will give consistent recognition to the skills and knowledge gained. Credit may be as little as six to eight weeks of technical training, and it varied by employer and by trade.

We also discovered that there was an inability to meet employer needs for tradesworkers and to address skill shortages. Employer needs identified included multi-skilling, specific skill sets to meet current employment openings and increased opportunity to identify emergent needs and have training developed to meet those needs. We found there were often inflexible training methods — based on time rather than competencies — that have been a barrier to innovation in training, design and delivery.

Of concern to us was the fact that many people drop out of their training program and fail to qualify to work in their trade or occupation. This represents a significant investment of time and money simply wasted. Many learners have to start over again when they begin a new program or trade that overlaps with the knowledge and skills they already have. These learners are far less likely to be flexible in gaining new skills and are also less likely to complete training to the level of their personal goals.

Industry, in fact, is also not attracting young people. The average age of apprenticeship in British Columbia is 28; many are in their thirties or forties before they complete their training.

Lack of qualified workers is a continuing concern. Half the current apprentices do not complete their training to become qualified in a trade. As you can imagine, those are specific and fundamental problems that create challenges when we're trying to meet the

needs of learners in this province. Even more significantly, how will we actually provide the significant numbers of skilled workers that we need in the future of this province?

As a result of our review, it was determined that a new model was needed to govern the industry training and apprenticeship system in British Columbia. So what did we do about that? We put together an industry training transition advisory committee, and there were members appointed to that committee from business, from labour and education representatives to advise us on how the changes should be made and what changes were necessary to bring about a new and enhanced training system in the province.

The committee had significant input into the proposed framework for the new model and, in fact, set out some thinking in a discussion paper, A New Model for Industry Training in British Columbia. A series of eight regional forums were held in January and February of 2003 to solicit input from employers, apprentices, trainers and labour representatives on the proposed training model contained in the discussion paper. In order to solicit wider input, the discussion paper was also posted on the ministry website.

I have to tell you that the consultation process was one that generated a great deal of interest in the province. As the process moved around the province, we worked very hard to accommodate the fact that there were large numbers of people who wanted to be involved in the process and who had not originally been included in the process. I'm pleased to say that my ministry staff worked very hard to incorporate all those people into a series of meetings around the province.

The discussion was passionate, as well it should be. We're talking about significant change, about a system that has been in place for literally dozens and dozens of years in this province. But I think it's important for me to say clearly and to reassure the people of British Columbia that, in fact, what we want to do with the new industry training model is enhance the system that currently exists. In fact, where appropriate, the traditional apprenticeship model will continue to exist in the province.

We're simply saying that the way people learn and the credits and opportunities that individual learners have had over the last number of years, at least on the academic side of my portfolio, have changed. We've allowed and encouraged people to look at different opportunities. We've allowed them to look at how to learn on line, how to look at going back to school and using the credits they've achieved at another point in their lives. We're simply saying that on this side of my agenda, in the skills training agenda, it's time for us to look at how to encourage learners to utilize their competency, to be able to find a way to measure their skill set. It's not enough to base that simply on time. We have to look at competency.

I certainly appreciated the interesting and very vibrant debate that took place around the province as we talked about this model. I think that's healthy; I think it's important. I think the changes you see will reflect many of the opinions we heard in that consultation process. We tried very hard to look at the suggestions and concerns of participants at the forums and of those responding to the discussion paper through the website, and they have been helpful in developing the new model.

You know, the transition advisory committee proposed a mandate and a mission statement for the industry training system, and they couldn't have said it better, from my perspective. They suggested our mission statement should be: "To provide effective and efficient industry-focused training that meets the skill requirements of employers and the career aspirations of learners in British Columbia." They said it well, and I think it should absolutely be the mandate that drives the new system.

The new system and the evolution to a new system will begin immediately, but it will take place over time. The option for employers and for their apprentices to use traditional apprenticeship training models, as I've already mentioned, will be retained as appropriate, but new mechanisms for skills development, for assessment of skills and knowledge and for more flexible ways to build other credentials will be added.

Young people and their parents will be encouraged to recognize the real opportunities that are presented by the trades and technical occupations. Employers and/or sector associations will actively engage with parents and the secondary school system to promote and market trades training and career opportunities.

There are a series of key principles which have guided the development of the legislation and will guide the delivery of a new model for industry training in British Columbia. We believe that a closer relationship between trainers and industry will result in better training that is relevant to the needs of the industry, workers and our learners. Trainers will have more responsibility for program and curriculum development and design, working directly with industry clients. We also believe that the achievement of standardized competencies — standardized competencies with appropriate assessment recognition and crediting of those competencies — will be a key element of the new model.

An efficient and effective training system recognizes both formal and informal learning and practical experience. It is coordinated with K-to-12 education and the post-secondary education system. That helps us facilitate the transition from school to work, and it helps us attract youth into the areas of skill shortages which have very well-paid employment waiting at the end of that process.

The industry training act that we're looking at the second reading of today establishes the Industry Training Authority. The purpose of the authority will be to ensure the provision of effective and efficient industry training that meets, most importantly, the needs of trainees and learners in the province and also of employers. The authority will be composed of a nine-member board appointed by the minister, a chief ex-

ecutive officer appointed by the board and a small team of employees appointed by the chief executive officer.

The appointment of this small group will result in a much more streamlined decision-making process. The board members will be appointed on the basis of their personal experience and, most importantly, their expertise relative to the mandate of the authority. We're going to look for the best nine people that we can find in the province to be a part of the Industry Training Authority, based on their expertise, their excellence and their leadership in the area of skills and trades training. Their job will be to oversee training in the province, formerly administered through ITAC, including the development of standards for industry training programs.

The chief executive officer will be accountable to the board and be responsible for the administration of the authority. The board of the authority will appoint advisory committees on an ad hoc basis. These committees will have a specific mandate and time frame to address particular issues. They will be few in number and small in size, with members appointed, again, for their relevant personal experience and expertise. This process for appointing advisory committees will result in a streamlined and flexible advisory structure.

The act also contains general enabling powers of the authority relating to industry training and apprenticeship programs, program standards, examinations and assessments, and industry training credentials. These provisions will enable the development of a flexible and innovative industry training and apprenticeship system that is responsible to both employers and trainees' needs and, most importantly, addresses skill shortages.

The authority will designate recognized industry training programs and program standards for them. Recognized programs will include programs that are regional in scope as well as just-in-time and customized training to meet sectoral or cross-industry needs. Initially, they will consist of all training programs for the trades and occupations that were designated by ITAC, except those that are interprovincially recognized trades — the Red Seal trades.

The authority will recommend to the minister that a training program be designated as an accredited industry training program. The authority will develop programs and standards for accredited programs with program standards being subject to the approval of the minister. Accredited programs are ones that meet provincial, interprovincial or national standards. They will consist of the 45 Red Seal trades.

Red Seal trades have been designated by the Canadian Council of Directors of Apprenticeship for inclusion in the interprovincial standards, or the Red Seal program as it's known. The Red Seal credential, received on passing the Red Seal examination for that trade following an apprenticeship or after years of practice in the trade, facilitates interprovincial labour mobility.

The authority will develop examinations and assessment standards and procedures for recognized and accredited programs, including the Red Seal trades, and for recognition of training in another program or jurisdiction. The authority will also establish processes for program review to ensure that standards for training programs, examinations and assessments are met.

The authority will develop criteria to award credentials, including the Red Seal, and will award or authorize the following to award credentials: public colleges, university colleges and institutes, as well as private trainers. These credentials will include recognition to individuals for completing equivalent training in another program or jurisdiction. The criteria for credentials will promote laddering, transferability, portability and mobility.

Think about that for a minute. There are people who come to the province of British Columbia who have a particular skill set. Or they live in British Columbia already, and they have a particular skill set. What we're saying is that this particular model of industry training will allow recognition of those individuals' competency — the skill set they already have. That, to me, is responsible, it's appropriate, and it's absolutely one of the ways we are going to begin to address the skills shortage in this province as we recognize people's competency, not simply the time spent in a particular program.

A key element of our new training system will be a competency-based modularized delivery system. You should try saying that quickly.

Modularization of current trades curriculum into specific skill sets will allow for competency-based assessment at that level and receipt of progressive credentials with the option of working towards a full credential. For example, a trainee could earn a certificate as a framing carpenter or a level 1 carpenter and eventually work to gain a Red Seal credential as a carpenter, if they wanted to progress to that level.

There will also be articulation so that skills and knowledge learned in one trade can be applied to another trade. That is a concern we heard expressed repeatedly by employers in the province — that there needs to be portability of those skills from one trade to another. This is absolutely critical to increasing the number of trained workers in British Columbia.

I want to say it one more time. I've said it frequently over the past number of months. The traditional apprenticeship model will still be available. But a competency-based system, where trainees have the options of earning incremental or specialized credentials tied to a specific skill set, is expected to result in more young people being attracted to the trades.

We've found over time…. One of the things I'm most concerned about as a minister is that very often students don't consider a skill or a trade in this province as a viable or a significant option for them. We have to look at a way to open up the system to allow students to think about how they can not only participate but be successful in gaining the skills, qualities and credentials necessary to work as a skilled and trained worker in the province. You and I depend on them every single day in British Columbia, and I think it's completely unacceptable that in many cases students and parents look at skills and training as a third or fourth — or somewhere down the list — option. It should rank right up there as one of the number one choices that parents and their students consider, as they look to their future in this province. In fact, I think it's important for us to point out that we all have to do a better job of doing that.

I'm a parent, and when we start to speak to our own children about what their future aspirations or goals are, do we as a parent sit down and explore the trades as one of those options? As the Minister of Advanced Education I can tell you this: having had this portfolio for almost two years, I realize that it's not only important but absolutely essential that we start at home. We start by looking at those options and, as parents, recognizing that it's just as important that we have plumbers and electricians and people who look after the aircraft we fly on everyday or who look after the cars we drive as it is to have physicians who look after us physically and all of those things. It's an attitude shift that we need. We need to work together with industry, labour and educators to ensure we're making those changes that help students make those decisions.

Another important part of the process is a challenge process, based on competencies, that will recognize prior learning and credentialing through equivalency and assessment. It will include practical and/or written examinations which will be available regionally. Those who are not successful at challenging examinations will be linked to training to address the skills and knowledge deficiencies, to allow them to progress toward a credential.

We're going to allow someone in this province to say: "I think I have the competencies necessary to achieve that credential." Should they be successful, that's fantastic. Let's move them on either to a job or to the next step of training. If they are not successful, what will we do? We'll say: "There are some areas here that you need to work on and that we need to give you some help in." We're going to match them up to a training program that will help them bring their skill set to the level necessary to achieve the credential. It sounds like it makes a lot of sense, from my perspective.

I want to give you an example. I was recently visiting an institution in the province — I've visited just about all of the ones I'm responsible for — and there was a young man who was taking an automotive repair course. His instructor — who, by the way, under the current system was able to challenge the fourth-year apprenticeship program…. That instructor was successful and is now an incredible instructor in the system. He can't do that now. You can't do that in British Columbia now.

He pointed out a young man to me who was probably in his late twenties or early thirties, and he said: "I want you to know something. That young man has the competency level and the skill set to actually begin his training at the third year of an apprenticeship. He has all the skills necessary to do that." Do you know what he said to me? "The unfortunate part of it is that he can't do that under this system. He has to start at year one."

How frustrating is that for an employer and for a young man with incredible potential to be able to move forward to a particular process and to move ahead in that process? He has the skill set to do it. The process simply will not allow him to do it. This legislation will help us to address that.

Competency-based assessment will also allow us to look at dual credit, something that my colleague the Minister of Education has supported and is looking at expanding in the K-to-12 system. We want to look at dual credit towards apprenticeship and other certificates, diplomas and applied degrees. New credentials will be developed to reflect current workplace standards and skill sets.

In the new industry training system governed by the authority, training will include on-the-job training, upfront training, short- and long-term institutional-based training, co-op training combining classroom and work experience, on-line training, entry level and advanced training and training that leads to diplomas and applied degrees. That sounds like a lot of choice, a lot of flexibility and a lot more opportunity for the learners of British Columbia.

In carrying out its powers and duties under the act, the authority may delegate its powers respecting training programs with the prior approval of the minister, with one exception. The authority's power to designate a training program as a recognized program cannot be delegated, to ensure that consistent criteria for designated recognized programs are applied.

The authority will have the power to delegate curriculum development, assessment and issuance of credentials in recognized programs to public and private trainers and industry groups. This will allow for direct involvement by them in delivering training programs and credentials relevant to the needs of industry, workers and, most importantly, our trainees. It is important for the development of a highly skilled, employable workforce that industry work together with trainers and trainees to develop the priorities for training so that it is relevant and, most importantly, responsive to changes in industry and technology.

Delegation of the power to give recognition for training to provincial standards to the new Safety Authority will allow for their involvement in developing training programs and standards where public safety is an issue. Funding sources for the authority are ex-

pected to be multiple, including the $78.5 million training budget of our ministry. We expect to raise additional revenue from industry.

To ensure accountability for public funding, the authority will be required to submit to government a multi-year business plan and an annual report. The business plan will include proposed revenues and expenditures as well as assets and liabilities. The business plan will also include a statement of how the authority proposes to meet the goals of increasing the quality and quantity of training received by learners in British Columbia. The annual report will include the authority's progress in meeting these goals, which are targeted at addressing current and projected skills shortages.

Accountability requirements will apply to all of those who receive public funds to provide training. The new act will allow for a flexible system in which workers can demonstrate or achieve competency at different levels or in related trades. This is important for increasing the number of trained workers in British Columbia.

Public safety concerns will be addressed by the authority, ensuring that training meets the safety standards set by the appropriate ministry, agency or federal government department. The act requires the authority to maintain a register of trainees and industry training agreements.

Something that will be exciting…. Again, this morning we heard from one of the members about the importance of high-tech. We're going to look at an on-line self-registration system. This new system will allow for updating of a trainee's experience and education by the trainee, the employer or public and private trainers, as appropriate. We'll actually be able to track progress and look at the additional credentials so that an employee, an employer and the trainee can all have a complete record of a particular learner's skill set and accomplishments on one system.

The new system will reduce red tape as well as improve data accuracy and time lines. The collection of more accurate and timely data will result in improved reporting of information and also monitoring of funding.

In terms of appeals, the act provides for a two-tier process of administrative review by the chief executive officer and an independent appeal to the Industry Training Appeal Board. This will allow for a far more streamlined process where matters can be dealt with by the authority unless they require an independent review.

Transitional provisions are contained in the act to ensure continuity once the new act comes into force. These transitional provisions apply to the following: trades and occupations designated by ITAC, trainees and industry-training and apprenticeship programs established by ITAC, apprenticeship agreements registered by ITAC, credentials and exemptions granted by ITAC and appeals under the Industry Training and Apprenticeship Act. All of these will continue under the new act.

Before I close, I want to thank the members of the Transition Advisory Committee for all the hard work they have done and to say that their contribution has been valuable and has helped to shape a new industry-training model for British Columbia. I also want to thank all of those, as I mentioned before, who participated in the exciting and exuberant regional forums held around the province, as well as the many who responded to the discussion paper posted on the ministry website.

All of these comments have been helpful, and while there is certainly not a consensus or full agreement on many of the issues, there is one thing that is important to note. It became even more apparent as we moved through the process that the status quo simply will not suffice any longer. While it's important to maintain and enhance those aspects of the model which we are committed to doing, which are excellent and work well, it's time for us to open up new opportunities and to look at new ways of training in this province while maintaining those things that are important — Red Seal certification, the ability to be mobile, high standards, safety standards in place.

We're simply saying it's time for change. We want to do that thoughtfully, we want to do that carefully, and we want to look at a new path of industry training in this province. I want to reaffirm our government's support and commitment to an industry-led training and apprenticeship program that is designed to improve the skills and productivity of the workforce and therefore — and so important to all of us — to better position British Columbia for economic growth and increased prosperity.

B. Lekstrom: It's certainly my privilege today to stand in this House and support Bill 34, the Industry Training Authority Act, as presented by the minister. I'd like to thank the minister for her work on this initiative, one that I think a lot of people have had a lot of questions on. I commend the minister for putting the time and effort into answering those questions, not just for your colleagues but for all British Columbians, and giving them the opportunity to go out and express their concerns.

Certainly, there was unknown out there. There was a lot of discussion that took place, but it's very clear to me. People ask one simple question: why did we have to do this? The minister touched on that, and I think it became very clear for most people — 45 percent of the people that entered our previous system didn't complete it. That has to be reason for concern and reason for any government to reconsider the delivery model they were using to try and better accommodate the needs of British Columbians in our province here today.

An exciting format we've talked about is the ability for our children coming up through our K-to-12 system. We're going to focus now on not only having them focus on the need to go to university. In many cases, if that's their wish, it's very worthy to do that, but I think for far too long we focused on that. We made our children feel that unless they went to univer-

sity, they were taking a second seat to somebody that did when in fact, as the minister pointed out, we couldn't be more wrong in that concept.

Whether you want to be a millwright, a welder, an electrician, a plumber or a meat-cutter, all of those are very good ideas and good opportunities to make a living for yourself, to raise your family, and are opportunities and jobs you should be proud of. In British Columbia, like around the world, not everybody and every need comes from a university education.

I'm not here to say that university educations aren't worthy. We all set our goals in life, like our children do. But when we have children going through school and they hit grades 10, 11 and 12 and feel that maybe their desire isn't to go on to university, why should they even finish grades 11 and 12? We see a dropout rate, and that is an effective way to discourage a child from carrying on in school. They may want to go right into the trades, and now we're going to have a program that's going to allow our students in grades 10, 11 and 12 to focus in on what they may like to do with their future and to start getting credits towards a trade in British Columbia that they can work towards and be ahead of the game when they graduate from grade 12.

My key reason for looking at this and supporting it, among the many that the minister has pointed out, is what I've said earlier — 45 percent of our entrants into the previous system didn't complete. There was work that needed to be done, and I believe the minister, along with all of the people, has done a wonderful job in trying to come up with what I think is going to be a great alternative.

As the minister pointed out, the people who were in the existing system are looked after. This isn't about completely getting rid of one and only allowing the need for a new one. This is about combining both.

The issue of compulsory trades that are moving to be accredited. Many people had concerns about that and felt it was some move to deskill the workforce and try to take away compulsory trades, of which I believe 11 were recognized under the previous legislation. This is about allowing flexibility, as the minister pointed out.

Somebody that's worked many years in a trade and wants to shift their career and move into another trade may very well have the ability to challenge that at the third year or the second year — probably very rarely at the fourth-year level — but the previous system didn't allow that. They had to go back and begin at year one.

This new system we're putting in is going to allow flexibility. Rather than being based just on time, it's going to be based on how you're able to do the job, how capable you are, with the experience you've gained in the field along with your cohorts and the workers you've worked with. I think that's a very good move, and certainly again I commend the minister for looking at that and bringing something in that will implement something that is going to benefit British Columbians, not deskill our workforce.

I've had discussions with many people over this, and I certainly have a history of this. My father was an instructor at a college, and my brother is an instructor at a college in the trades training. I've had many people express concerns about new modularized training initiatives that we're going to see in different areas of the province — whether it be, as the minister pointed out, for a framer rather than being a fully qualified journeyman carpenter. You may just want to be a framer. There's a great need for those, particularly in the lower mainland where we're seeing a boom take place.

People have said that's going to deskill the workforce. I think they're wrong. I think they're off track when they say that. All you have to do is look at what takes place in welding today. If you go in, it's a modularized system already. You have your C ticket, your B ticket, your A, your pressure. You go through a modularized system that allows you to carry on as far as you want to go.

There's no mandate that says you have to go up here. If you receive your C ticket and that allows you to do the work you want to do, and you're making a living for yourself and your family, and that's what you enjoy doing in life, there's nothing that says you have to go back and upgrade. You can continue with that. We're going to allow the same flexibility for many other areas with our apprentices and our trades training in British Columbia.

The transferability from one trade to the other, as I pointed out, made very little sense — that a qualified person would have to go back to year one. If they spent 15 or 20 years in a trade of their choice and decided to upgrade and take on another one, they may well be able to transfer over immediately. Instead, what they're willing to do is challenge the test. Again, I want to reiterate how important that is.

There were a lot of people concerned about the Red Seal certification. The Red Seal certification is an interprovincial ticket that we get. This does absolutely nothing to change what's going to take place with our Red Seal certification. Red Seal certification is a national standard we have to utilize to make sure that if we take an electrician from British Columbia, for example, and they want to go to Alberta or Saskatchewan or farther east, they have that certification. We will not put in a system in British Columbia that will see an electrician in British Columbia not credentialed to work in Alberta or anywhere else if they have their Red Seal certification. I think that's vitally important for people to understand.

I think that when we get into issues like this, many, many people talk about "what if" and "what might" rather than actually dealing with the factual information. I'm proud to be part of this change today, and I think that in the years to come we're going to see more of our workers that enter the system of trades training and apprenticeship in British Columbia carry on to completion, which will correct the 45 percent dropout rate that presently takes place.

There are so many things and so many examples the minister touched on. She certainly covered a good portion of what I wanted to say today, and I know that

people listening at home and following our debate don't need to hear things two and three times.

In closing, I just want to say that this has been an issue with my family and my friends. We've talked about it. We've had much discussion right around the province. There's been a lot of concern. Again, I think that concern was legitimate, because that's how we find better modes to deliver services in British Columbia. Those concerns were listened to by the minister. A lot of work has gone into Bill 34, and I'm proud to stand today and show my support for it.

J. Bray: I, too, rise in support of Bill 34, the Industry Training Authority Act. I concur greatly with the previous speaker, the member for Peace River South.

The development of this bill. Perhaps that's where I'll start this afternoon. You know, sometimes the people watching wonder where legislation comes from. How does it arrive on the floor of the Legislature that we'll debate things like industry training and apprenticeship or any of the other things we debate here in the House? Where it comes from is when government, this government, identifies a problem, consults with the public and consults with stakeholders to arrive at a solution to a problem.

The problem facing our economy was one of a lack of skilled tradespeople coming up through the system. It was hearing from industries right across all sectors that the number one concern they had — other than taxes, of course — was a lack of skilled tradespeople. The average age of skilled tradespeople was rising every single year, and they did not see the flow of new people coming into the trades. The ability for our economy to grow, for communities to grow and for families to support themselves was going to be directly impacted by that.

I think many people in the public have had situations where they've looked for help on a project, be it a general contractor doing some work or even just trying to find a plumber to come and fix your sink, and found it difficult to find somebody who was skilled to come and do that work. Well, that's not just an inconvenience; that actually is a real threat to good, strong economic growth.

There has been a bias, I think, for many years to suggest that one must graduate high school and go to university or college — not either-or, but that was where you should go. We as parents have done a lot of that ourselves. We have actually created that ourselves by our own biases perhaps. The reality is that there is such a shortage of skilled tradespeople — and these are individuals who make excellent wages, family-supporting wages, community-supporting wages — that perhaps now is the time for us to recognize that the problem of a lack of skilled tradespeople starts here. With the emphasis that we place on apprentices — those learning the trades, those entering into the trades — how do we address that shortage in a way that complements the individual, complements the various industries, our economy, high school and our post-secondary institutions, and provides solutions for all? I commend the minister, because Bill 34 addresses all of those in a very comprehensive way to the betterment of everybody.

It's interesting to note — and I congratulate the member for Peace River South for raising this issue — that the trades are just as honourable as somebody with a college degree or certificate or with a university degree. Somebody who is an apprenticed journeyman plumber is in an honourable trade. Somebody who is a journeyman painter is in an honourable trade. Somebody who is a fully ticketed meat cutter is in an honourable trade, on par with every single person in this Legislature, on par with anybody in society. Our communities were built by people who worked in the trades, and our economy will thrive only when we have enough people with those skills working forward.

The problem with apprenticeships was that we weren't getting enough people through the system. We weren't getting enough people who were feeling they were benefiting by the system. Part of the reason was that the system wasn't designed and didn't evolve over time to the benefit of that individual apprentice. It morphed into a system that benefited various other parties for a whole host of reasons, but the structures at the end of the day actually meant, as the member pointed out, that almost half the people didn't complete the program. To me, a 45 percent dropout rate is not acceptable. We would never accept that in high schools. We would never accept that in universities. I'm glad that the Minister of Advanced Education has said we're not going to accept that for our apprenticeship program.

What does the new model that the bill brings in do? It actually recognizes the system is there for the apprentice and an apprentice who feels valued, who has access to the opportunities, to the training and to a system that meets their needs and will benefit the sector they're training towards. When they are benefiting the sector they're training towards, that benefits the whole economy. I think a new model that comes forward that respects the individual apprentice and the choices — not that employers necessarily want to make, not that government wants to make or that post-secondary institutions want to make or that unions want to make — that the individual apprentice wants to make is key to the success of this program, respecting that those individuals who choose the trades can make decisions for themselves, can choose how far they want to go, can choose to make career changes and can choose to move to different parts of the province to work. Now they have a system that will respect those choices, will support those choices and will enhance their opportunities in this province.

Recognizing that there are multiple players in the apprenticeship program is key. The union system is vital for apprentices, but it is not the only partner that's involved here. You also have employers who have emerging needs, changing needs — sometimes quite quickly — and they need some ability to respond. You have post-secondary institutions, some of the finest in

the world, who are moving forward and using technologies such as the Internet to provide opportunities to people. You have two-income families now, so the apprentice who maybe 25 years ago was going to be the sole income earner…. That's not the case now. Families can't just get up and move around simply to meet the demands of one wage earner. You now need to have the flexibility to recognize perhaps that portability, at any given point in time, isn't there.

We need to have a system that responds to apprentices and gives them the opportunity to get some of their credits through the Internet and some of their classroom time using the new technology. It gives them credit for the skills they inherently have — not just the piece of paper that government or an institution gave them, but actually gives them credit for the skill they inherently have. It gives them skills for work they've done, perhaps, in other jurisdictions. It gives them skills that are cross-trainable. You know, somebody who works with wood could probably do more than one particular thing in carpentry. So this system recognizes those competencies, gives them the ability.

It does something else that I think is very exciting. It melds the two systems we have created here. You're either an apprentice, or you go to a college or university. Heaven forbid that you ever connect the two, because one is a trade and one is academic. This actually recognizes that you need to have all skills to be a fully participating member in the community, and if you choose at some point in time…. Say, as an apprentice you've got your journeyman papers, perhaps in the construction trades, and you want to move forward and become a general contractor or do some other things. The system now recognizes that you can get some credits for your skills towards, say, a business administration degree. How novel to actually say: "You've been doing this for 20 years. I bet you've got some competency."

Now we actually recognize all the skills inherent in being a journeyman carpenter and vice versa. Perhaps you've gone to university for some time. You've done mathematics, some physics and some geometry, and you decide that you really would like to do something in the trades. Well, now you don't start at day one. Now you have the ability to get some recognition for some of that academic work. The flexibility provides that the individual, who should be at the centre of the whole issue of trades training, is now recognized in this.

What are some of the other benefits this provides to apprentices? Well, it provides them the opportunity to choose where and when they want to take training. They're not stuck in a regimented process that doesn't recognize that life is more complicated now. There are other issues that go on, and you sometimes can't fit into a rigid, autocratic system. This allows the flexibility that individuals need in today's society to meet family and community demands as well as training demands.

Certification will be based on skills and abilities rather than just the arbitrary measurement of time — to somehow suggest that if you've been there long enough, that's a trigger to say you're successful. It actually says that skill is what we're going to measure you on, and ability is what we're going to measure you on. In other words, we're going to look at your merits as well just some arbitrary measurement of time.

It also means that for some apprentices to be fully certified, to be able to demonstrate all the skills and abilities to be certified, your actual apprenticeship time may be reduced. You may actually be able to achieve your full certification quicker because we're now measuring you on skills and ability and not just time. As I said before, you can transfer your credits around to meet your own individual needs. It recognizes that cross-training purpose.

So I think that this is really an important piece of legislation. It will be one of the many pieces we're putting into place to advance the trades, to advance the looming skills shortages, to make the system responsive to the most important person in the entire system, and that's the apprentice.

I'm proud to be able to support Bill 34, and I congratulate the Minister of Advanced Education for consulting, for listening to the various stakeholders in what has sometimes been a very emotional and complicated system to meet the needs of everybody but to always keep the apprentice at the centre of the equation.

G. Trumper: In rising to speak to Bill 34, I want to say it is time that the programs for apprenticeship are modernized so that our trades work for business today, for employers and for the student who is taking up that road in their career. As you know, Mr. Speaker — and you yourself live in a community which is industrial-based — many of our tradespeople who came there many years ago are now retiring, and we find a huge shortage in apprentices and qualified tradespeople. Many of those people came from Europe many years ago, where they've always had a very good apprenticeship program for trades.

Over the years I believe that not only British Columbia but Canada has fallen back in making apprenticeship programs modernized and available for those that wish to use these as a career path. I do want to acknowledge that in my region, NorskeCanada has an excellent apprenticeship program, and I know they are doing some pilot programs at the moment. Also, North Island College was one of the first colleges to have the modular welding program in place some years ago.

One of the issues that I think has come forth with the discussion on this particular bill is that there has been a lack of understanding, or maybe it's just that change is challenging. I was at a meeting about a month ago where I certainly was castigated on this particular program. I won't use the word that was used to me at this meeting, but it's fair to say that I was told I was completely untruthful in what I was reporting on the particular program.

I hope those who have concerns and maybe don't quite understand the direction that we're going will

read Hansard, because the minister certainly covered it incredibly well as to the direction we are taking. The minister made it very clear what the standards are and how they will be accepted right across Canada, and that our tradespeople, as they reach their qualifications, will be accepted and will be able to work in any province in this country.

Most of what I wanted to say has been referred to recently, and I'm quite sure that most people don't wish to have it repeated. But a month ago I, like many of my colleagues, met with a particular group of people who were very opposed to this program, and so I issued them a challenge. I asked them to come back to me with some recommendations on modernizing the apprenticeship program. To date I haven't received anything from them. I do believe that criticism and concern about programs are always valid, but I also believe that you have to be prepared to make some recommendations.

Over the years we've looked at the apprenticeship programs. I can remember many years ago, when I was on the school board, we tried to encourage apprenticeship programs for young people. At that time the unions of the day were very set on the fact that it was seniority that was the most important thing, so you were getting people who, for whatever reasons, at the age of 45 were starting on apprenticeship programs. There was absolutely no opportunity for young people to get into the apprenticeship programs.

Times have changed; things have moved on. There is opportunity, but I also believe there is a great opportunity today for young people to look at the roads they're going to take, to look at the careers they're going to take. If you look at the trades that are out there, they are well-paying jobs. They enable many of them to move across the country, to move to other places to get employment. It gives them an opportunity, and it opens the world for them.

I do believe, as many people have said previously, that too often…. I don't believe we have encouraged our children to look at the trades, to look at the apprenticeship programs, for their futures. I am very pleased today to commend the minister on this new Industry Training Authority Act, to look at the way we are moving forward so that we can modernize the way we train people. It gives them the opportunity to do it in their own time, to recognize some of the training they may have had in other education programs. It gives them an opportunity to move on.

They can do it at their own time, not necessarily at the time and in the programs that other groups may need. They can take the opportunity to individualize their programs. I believe we are laying a great foundation for the young people, particularly, in this province to move forward to have careers that they will be successful in and also that will enable them to have good, fruitful lives and be successful in whatever they do.

J. Nuraney: I also rise this afternoon to support Bill 34, which is on the floor today. Just as my colleagues have said, it is a bill that is, again, a reflection of what this government is all about. If the status quo continues to be accepted, there can be no change. There can be no progress. I think that in bringing this bill forward, the minister has proven to us that she indeed has the conviction that the status quo has to be changed.

What she has done, more importantly, is identify needs and have the courage to move towards responding to those needs. We have in the past heard about the dangers that would confront us in time as electronics and the new technology enter the fields of trade and industry. There is that huge fear expressed some years ago that the labour force that was in these different fields would become redundant with the introduction of the new technology. The fear was: how are we going to retrain that labour force to make it more productive again?

In this bill I see that as a part of the response to that need. What we have now adopted here is a program that we can give to people who can very quickly be put back into the workforce with specialized training that is geared towards what the market needs right now. The market is shifting so rapidly in terms of its needs for resources in manpower. As my colleague also mentioned, which I think is very appropriate, one does not really gauge a person's success or qualifications by the length of the term of the time that one spends in institutes of high learning, but by the skills they develop and bring forward to become more productive members of society.

Once again, I think this is a bill that is striking the balance of also recognizing the traditional requirements and the traditional necessity of qualifications like the Red Seal — which continues to be accepted and recognized, and will continue to be offered — while at the same time offering to those people who perhaps do not have that kind of retention level of going through a three- to five-year training program but who want to be specialized in a particular field and have the ability to move forward in their lives and become productive.

I think this bill addresses all those kinds of challenges that we have identified and have seen in the past years. Once again, I think it is courageous of the minister to be able to respond quickly to the needs without fear and to have that conviction in her and her department that we have to move forward to meet the needs where they are being identified.

I once again want to congratulate the minister for bringing this forward and want to express my support for Bill 34.

Hon. S. Bond: I simply want to thank the members who made comments. I look forward to ongoing discussion, I'm sure, through committee stage.

I think it's best been said by my colleagues, in fact, and perhaps in a more articulate way than me. They have highlighted absolutely the principles and the thinking that have driven the creation of this bill and ultimately a new model. I think perhaps focusing on the individual and their ability to choose is absolutely critical to the thinking. The ability to retrain workers —

so important as people make life adjustments through the skills they have in more than one job in a period of time — is absolutely critical to what we're doing. I think the comments about change causing uncertainty and the fact that when we look at changing the status quo, often we react simply because it's change and that we haven't really thought through the necessity for that change.

I simply want to thank my colleagues for their comments, for their obviously thoughtful review of this bill and for their recognition of how important it is to support a system that reflects the needs of learners in this province. With that, I would move second reading.

Hon. S. Bond: I move that the bill be referred to a Committee of the Whole House to be considered at the next sitting of the House after today.

Bill 34, Industry Training Authority Act, 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. L. Stephens: I call Committee of Supply to debate the estimates of the Ministry of Forests.

Hon. M. de Jong: While various personages are assembling, I'm going to suggest that at a time when obviously significant changes are taking place with respect to forest policy management, I am looking forward to the questions I know members will have about some of those changes as they have been announced thus far and the significance of that from the point of view of ministry operations in the year ahead.

P. Nettleton: Mr. Chair, thank you for this opportunity to ask the minister questions with respect to the Ministry of Forests, a ministry of vital importance to the province and certainly to the part of the province I am fortunate enough to represent.

With respect to these estimates, the Ministry of Forests service plans are projecting three years ahead. So I am taking this as a jumping-off point to ask the minister to venture further with respect to his predictions with respect to his ministry.

Seeing that forest sector employment levels continue to weaken — and with B.C. experiencing increased world competition in forest product markets, along with mounting conservation pressures — and considering huge issues such as the softwood lumber dispute, what does the minister foresee happening with respect not only to the B.C. forest industry but to workers in that industry from various communities and various parts of the province over the next few years?

Hon. M. de Jong: Maybe before I go further, I can introduce the deputy minister, who is seated to my right; Mary Myers, on my left from the Forest Service; and Bronwen Beedle, directly behind me, as the staff who are participating in these discussions.

I think the member refers to an issue that is certainly on everyone's mind. It relates in large measure to the overall health of our number one industry in this province, and the trend lines over the past decade have not been positive. A great deal of what we are embarked upon with the forestry revitalization plan is designed to reverse that trend and is a response to what I think is an inescapable conclusion one must draw: if we do nothing, the trend the member has identified will continue.

In fact, ironically, for a host of reasons, at a time when we are certainly facing some serious challenges with respect to forest health — and the member knows about that firsthand from his own neck of the woods — and with respect to trade issues, notwithstanding those very significant challenges, the short-term employment numbers are actually marginally up. But I don't think we should kid ourselves about where the trend lines have been. I know the member hasn't, as part of his question. At the end of the day — and the member is correct to look out beyond three years — the objective is to allow industry and all facets of the industry to restructure and reconfigure in a way that will allow us to regain a competitive advantage not just vis-à-vis the United States but on a worldwide level. That is the new reality we live in as a forest sector. That's the challenge we face, and that's the objective we've set for ourselves.

P. Nettleton: Yes, and certainly that is the hope, I think, of communities and workers within the forest sector — that, in fact, the future does bode well for that industry, particularly in the context of the difficulties families and communities have experienced over the last ten or 12 years or so with respect to the forest sector.

Back again, if I may, to the service plan. There are about ten or so references within the service plan stating the importance of consultation with first nations when it comes to forestry and the forest sector. Those references state the need for consultation, not just because of recent court decisions but because it makes a lot of sense. First nations have an important constitutional place in our province. I'm wondering, then, why there is this gap or divide between the government's commitment to consultation and the first nation sentiment — their sense that such consultation is not hap-

pening. I'm thinking, surely, there must be some reason for those feelings on the part of first nations if further court action and roadblocks are on the back of the table. There's certainly been reference made to that by various first nations.

To the minister, then: what is his sense in terms of this growing frustration on the part of first nations with respect to questions in and around the whole issue of consultation?

Hon. M. de Jong: Thanks to the member for the question. I think it is fair to say that because it is a fact that some first nations have articulated a concern around the issue of consultation, as the member points out fairly, there is a recognition of the importance of engaging in that consultative effort within the service plan, not just because of the obligations that exist either constitutionally or via judicial pronouncements but also because, from an operational point of view, it makes sense to do so. I think, though, one has to, as well, analyze the parameters of what it actually means to consult. I'll address that in sort of two ways.

The obligation to consult is not, in my view, the equivalent of bestowing upon anyone a veto. Whenever one embarks upon an exercise designed to elicit the opinions of people, part and parcel of that is the recognition that there may be differing opinions and there may be different views about what the proper course of action may be. At the end of the day the government accepts the benefit of having received a myriad of different opinions and then proceeds in a way it believes best serves the interests of the broader citizenry. So that is an issue.

Here's another issue I know this member has been involved with and has turned his mind to, as have other members in the House: how do we find a model for consultation that is workable, that will enjoy broad-level participation amongst first nations and that gets beyond discussions that exist purely at a bilateral level between the Crown in the right of the province and an individual band?

Now, there are circumstances in which that is necessary and that is the correct and proper channel for those discussions to take place. But there are a whole host of other issues that relate to broader forest management policy in which it makes sense, in my view, for us to look at some vehicle or mechanism, perhaps initially on a regional level, that could then broaden into a larger provincial mechanism, where we are sitting down to discuss operational aspects of forestry, technical aspects of forestry, the Forest Act and the Forest and Range Practices Act — but that those forums take place on a larger or broader level.

We've begun some work in that respect, and I'm hoping we can gather some momentum. It won't be easy. Obviously, it is going to take a degree of collaboration on the part of both government and first nations. I have to say to the member candidly that I'm glad he asked the question. Of late I have seen good results. That doesn't mean we haven't got a long way to go, but the indicators in that respect are positive in my view.

P. Nettleton: Thank you for that update. Again, representing as I do communities that are resource-dependent — forest-dependent — we certainly hope that some of the mechanisms and models that are currently being explored will, in fact, be adopted and implemented and will lead to a resolution of some of the uncertainty in the forest sector with respect to first nations involvement.

For a lot of the communities — not only the non-native residents of those communities from which I hail, but for the first nations, of course — the forest sector really is the only opportunity in terms of being involved in a very meaningful way and finding some way to become involved in the economy and providing opportunities for members of the various bands. For that reason, we all want to see us move forward and prosper together. Certainly, we hope that will be the case.

Changing the topic then, if I may, the service plan talks about plans for the ministry's six seed orchards. I understand these were offered up for lease to the private sector, but there were no offers. My question would be: why lease when outsourcing — the term being used — is what we see occurring in other ministries?

Seed orchards work towards improving seeds for reforestation. Should this responsibility be better done by, for instance, post-secondary institutions? I think of UNBC, with which the minister is familiar, having been there on a number of occasions. He's familiar with their programs. They have a significant forest research component. Perhaps this could be a joint effort with the Minister of Advanced Education with respect to seed orchards.

Hon. M. de Jong: I apologize to the member. I wanted to try and get as complete a set of information for him as possible. In fact, I think the member's information is correct. There was an opportunity for submission of expressions of interest on the six seed orchards. Unlike the nurseries such as Skimikin where, ironically, there is both the nursery and the seed orchard, the private sector did opt to take advantage of the nursery component, not the seed orchard aspect of it.

The best I can offer the member with respect to that is that it would appear there is less interest in the commercial opportunity those seed orchards represent, and it may be a product of the amount of time, the investment required at the front end before a private operator would realize a return.

I think the second part of the member's question, however, related to whether or not these represent an opportunity for exploration of partnerships with post-secondary learning institutions. I think that's possible, and I'm happy to receive the member's suggestion in that respect.

P. Nettleton: Thank you to the minister. I would also like to ask, if I may, about Forest Service roads.

The ministry intends to hand off, as I understand it, the maintenance of these roads to the forest industry, to something called road user groups and to the Ministry of Transportation. What is the rationale for this?

Hon. M. de Jong: I think the member's question is a timely one. He will know that as part of the core review process of more than a year ago, we have undertaken a pretty serious examination of what the ministry's responsibilities are and should be with respect to the maintenance of a road network that I believe extends beyond 40,000 kilometres in the province.

A number of those Forest Service roads are roads that have been maintained by the ministry. In large measure, we have relied historically in British Columbia on participation by the licensees who use the roads. In fact, well in excess of a half of that network of 40,000 is utilized and maintained by the licensees who are operating out on the land base.

Our resources are taxed, and that's what happens when revenues decrease by the approximate $600 million per year that we've seen over the last number of years. We have looked at other avenues. The member will know — because I think he was involved in some of the brainstorming that gave rise to the birth of this idea — that we have designated a new type of road, a wilderness road, where admittedly, the maintenance standards will be somewhat less than on a conventional Forest Service road. The best way I can describe it is that you probably don't want to take your Cadillac Eldorado out on a wilderness road, but I'm not sure many people who want to access our outdoors in British Columbia are inclined to do that.

The bottom line is this. We have an extensive forest road network within British Columbia that British Columbians have had access to and want to continue to have access to. We are examining, in the best way we can, how to maintain that network. Admittedly, in some cases, we are looking at a new type of road that will be a little bit rougher and tougher to ride on. We're obviously looking for continued, even increased participation from licensees. But the member knows as well as anyone in this House the level of importance his constituents and British Columbians place on having access to British Columbia's outdoors via that network of roads, and we're doing the best we can to ensure that access continues.

P. Nettleton: Yes. Well, a Chevy pickup works for me. In any event, as the minister pointed out, these roads do provide access to folks, particularly those of us who live and work and play in northern British Columbia.

Will the Ministry of Transportation be afforded additional resources for maintaining any roads for which that ministry receives responsibility?

Hon. M. de Jong: In fact, those discussions are taking place with the Transportation ministry. There shouldn't be any secrets here; I hope there aren't. Some of these roads, which began as Forest Service roads, have evolved into something far different. They have evolved into almost arterial highways, connecting people to town. In those cases, the use that those roads are put to more closely resembles a highway, which would logically fall under the jurisdiction of the Ministry of Highways. On a fairly site-specific basis, we are engaged in some discussions with that ministry on that issue.

P. Nettleton: Right. Yes. Well, as the minister has pointed out, I believe Forest Service roads do, in fact, serve more than logging vehicles or provide access to the woods to industry. Northern residents — myself included, and other members of this House representing the north — use them as transportation routes. There are often campgrounds or outdoor recreational sites along these roads. These roads are often the only access points to some wonderful recreational opportunities for hiking for locals, tourists and others.

Of course, we're all concerned — those of us who live in the north — with respect to the standards established for use. If some of these roads are no longer maintained to a proper standard, we're concerned about what happens to those opportunities. That is something we will certainly be monitoring and will be in touch with the minister and his ministry as the ministry moves forward with respect to roads.

Finally, with respect to roads, are there any such road user groups coming forward to assume responsibility for a Forest Service road — for instance, a first nations band or community association? If so, would they have the resources to assume responsibility for roads that are particularly important to their group?

Hon. M. de Jong: I think I should state the obvious, which is that probably without exception, the preferred position for anyone that falls into the category of groups the member has referred to is that the Crown continue or resume or maintain responsibility for the maintenance of the roads. I suppose that is an obvious position for anyone in that position to take.

The kind of situation where we have begun to have discussions is where there might be a recreational group or tourism group, and I think I heard the member refer to these examples. It acknowledges that the road by which access to their particular location or activity exists is no longer a road that is related to any forestry activity. Therefore, there are no licensees providing the kind of maintenance associated with that, and the Forest Service has signalled that for budgetary reasons, we are unable to provide traditional maintenance.

In those cases, discussions are taking place, again on a pretty site-specific basis, as to how we might work together to ensure that access continues. It varies. There are situations, obviously, where you have some pretty isolated locations and a lengthy road, and that's really the only activity, the only occupant, at the end of the road. That presents a different set of challenges to

the situation where a number of homes, for example, have sprouted along a forestry road and there is traffic associated with that.

That's the kind of situation in which those discussions are taking place. I can acknowledge to the member that we haven't solved all of the problems, and we're trying to work through them as best we can.

P. Nettleton: The minister is quite right that they're very site-specific — some of these discussions. It has been my experience, and I'm sure it has been the experience of other members with respect to issues in and around roads and accessing some of these more remote communities, residences and what have you, that in the various ministries — that is, both the Ministry of Forests and the Ministry of Transportation — the personnel at the local and regional offices have been very helpful in terms of attempting to work through those on a site-specific basis. That has certainly been my experience.

I guess the concern would be that this might change if, in fact, the resources were somehow not there for those particular ministries at the various regional offices and community offices and so forth. But certainly, it has been my experience, as I say, that the personnel at those offices have worked very hard on working through those issues with folks.

A few questions to the minister, if I may, Mr. Chair, with respect to expanding markets for B.C. wood. I see that the government has taken up efforts to promote wood frame construction technology in China, for instance. There's one particular project, Dream Home China. What is the government's commitment to this initiative?

Hon. M. de Jong: Thanks to the member for providing me with an opportunity to highlight something that we are admittedly quite excited about as part of a market diversification strategy that we are following through on.

I should say, as well, that it was kind of the member to acknowledge, a moment ago, some of his experiences within the Forest Service as it relates to the roads issue he raised. I appreciate that very much.

We are looking to get into a new market. It is a complex place. I have only been there once, but one quickly garners an appreciation that this is not a task that is achievable overnight. It is a market that the world has identified. It is an emerging market with a growth rate that is nothing short of phenomenal. We in British Columbia and Canada view it as a logical destination for many of the products we produce. Based on where we are situated and the products that we produce in abundance — wood — we think there's a logical fit there.

It is also necessary to point out that the recent culture, at least, within China has not been to utilize wood products or wood frame construction in the way that we historically have in North America. There is in some quarters a suspicion around the durability and the fire hazard posed by construction with wood. We are serious about pointing out to our Chinese trading partners that we have a product here that they can utilize to satisfy a burgeoning home construction market.

The project we launched a couple of weeks ago and the Premier outlined in his announcement several weeks ago, Dream Home China, is designed to act as a catalyst for that marketing activity on, admittedly, a pretty colossal scale. It is a place where we will use engineered wood products for a showroom facility that can house and host various value-added products, various educational forums, various displays. Surrounding that display centre are homes, both single detached homes and townhomes — mostly finished, but also some that will display on a cross-sectional basis the technology we use to construct wood-framed housing here in British Columbia.

The commitment from the provincial government is, I believe, $12 million. We are initiating this project on a collaborative basis with industry, as I say, both primary industry and the value-added sector within British Columbia. Our hope and expectation, based on how we intend to go about this, is that the vast majority of that investment can be recouped at the time when the decision is made to sell the facilities that will be located around Shanghai at a site yet to be designated or obtained.

The hope is that we can be in the ground in September and have construction largely complete by the spring or summer of 2004. Those, off the top of my head, are some of the specifics of the project.

P. Nettleton: I recall, as well, in January 2001 the Premier — then opposition leader — making a speech to the Truck Loggers Association. A commitment was made at this event to direct, as I recall, 1 percent of all provincial direct forest revenues to a forestry marketing campaign. Is this China effort part of this commitment, and how much money are we talking about here with respect to the 1 percent commitment?

Hon. M. de Jong: The answer to the first question is yes. The $12 million figure I referred to extends over, I believe, a three-year — but it may be a four-year — period. So, yes, this is included within that envelope.

P. Nettleton: I understand, as well, that a major obstacle to opening up the China market is the building code in China. I understand that's an issue. I've also heard that this code is expected to change soon, perhaps this spring or early summer, to better facilitate building with wood in China. Can the minister then elaborate on this important aspect of expanding B.C.'s market in the China market?

Hon. M. de Jong: The member is bang on. I think there are really two issues. One is the cultural issue I

referred to, but that translates into, I think, a virtual absence of building code standards for the kind of wood frame construction we are used to. That's why there's been a pretty concerted effort on the part of the provincial government or organizations like COFI, and there has been provincial funding and, in fairness, some federal funding dedicated to addressing that fact and working with the Chinese officials.

Just to give the member an example, one of the issues that we are still grappling with, with our Chinese friends relates to the spacing of individual housing units. That goes back to the concerns that have been expressed around fire hazards and, I suppose, the comparative lack of experience with North America, where we of course have a very high level of comfort.

I suppose one could argue that we also have a fairly advanced fire-fighting capability in most communities. That's an issue we have to continue to work with our Chinese trading partners on. Obviously, the larger the spacing in a country as densely populated as China, the worse the economics for the use of the product. That's something we're working with them on.

The date for the finalization of the building code has tended to shift from the winter to the spring to the summer. I'm not sure I can help the member particularly in trying to pinpoint when that will be. Our hope is that it will be sometime…. We are talking about a matter of months as opposed to next year, but there is certainly ongoing work.

P. Nettleton: I will ask, if I may, one further question before yielding the floor to other members. I do have a line of questioning which I will bring forward at some point in the very near future within these ministries. I appreciate the minister's indulgence with respect to the topics that I've superficially at least pointed to as an opportunity for discussion, and for that I am grateful.

One final question, if I may. The service plan talks about targets for key legislation on page 35, and we've certainly seen a number of pieces of legislation from this minister and this ministry. Apart from what we've seen in this House to date at this sitting of the Legislature, though, what else might British Columbians expect to see in this regard with respect to future legislation?

Hon. M. de Jong: My pause was to ensure that I don't run afoul of parliamentary privilege rules.

The member asks a relevant question. I think this is the best way I can answer. The bills that have been presented thus far lay out, broadly speaking, the directional blueprint for where the government wants to go as part of its forest revitalization strategy, and we will, I'm sure, continue to have a healthy debate around those changes and those initiatives. What may follow relates largely to a filling-in of the details, the specifics around those initiatives.

But the member will know that we now have legislation dealing with the Forest and Range Practices Act, a results-based code, legislation that deals with the establishment of market-based timber pricing and other initiatives that significantly amend the Forest Act. As is generally the case, all of us in this chamber will be the first to see any subsequent pieces of legislation. There may well be some, but it will largely be of a nature that fills in the details of the main pillars that are now before the House.

D. MacKay: First of all, I'd like to commend the minister and his staff for the changes we are undertaking with the rewrite of the forest code and the Forests ministry itself. There have been some dramatic changes introduced in this House — some past, some pending and certainly long overdue given the state of crisis that the forestry industry finds itself in the province today.

Because I happen to represent the northwest part of the province, there are two regions of the province that are of interest to me. I'd like to start by asking the first question on page 28 of the service plan for the Forests ministry. On page 28 we talk about objectives, strategies, performance measures and targets. We talk about the percentage of high-priority bark beetle infestation sites treated.

When I read that, I had some recall of our recent pine beetle task force that travelled through the Lakes District, and it was my understanding that we don't treat the pine beetle infestation. It's either harvested, or we leave the trees on the stump. I'm just wondering if that's an oversight because of the lack of treatment available for the pine beetle that is literally destroying the lodgepole pine in the central interior part of the province. Is it an oversight, or should it be treated or harvested?

Hon. M. de Jong: I appreciate the question, because I think there may be some confusion about what one is actually describing when the word "treat" appears in the service plan. In fact, in this case, the treatment is the harvest. The member will know better than most that that treatment has met with marginal success. We think we have managed to slow the spread of this infestation, but we have by no means arrested it completely. The member will know that the infested area has grown appreciably in the last year.

The short answer to his question is that "treat" in this case largely means harvest.

D. MacKay: Again, looking at vote 25 in the estimates, we're dealing with forest health. I notice we have a budget of roughly just over $10 million allocated for forest health. Does that include the pine beetle infestation problem in the central interior? If so, when I look at the amount of money under line 60 for professional services estimated at $7.725 million, it doesn't leave a great deal of money allocated to the actual arrest of the pine beetle problem.

Hon. M. de Jong: In fact, there are a couple of other areas that we have to lump into our attempt to calcu-

late an overall allocation to this. The member has identified one of those sources and one of those amounts. In addition to that, at the district level there are, of course, personnel who devote a significant amount of their time.

In his part of the province I think it's fair to say that virtually the entire management and harvest strategy is now built around trying to combat the beetle and the spread of the beetle infestation. Strategically directing harvest activity to the leading edge of the infestation takes up a significant amount of the time of the officials on the ground.

In addition to that, the forest investment account, FIA, has an allocation of dollars available to it. The priorities for spending that money are set by the stakeholders within the timber supply area. That money is also diverted to combatting the beetle.

I will say this, however. The member has admittedly told me this in the past, and he is quite entitled to do so. When you consider the scale of the challenge that we are facing, it is, comparatively speaking, a very small amount of money. Though we think we have achieved some successes, we are by no means at this stage of the game winning this battle in terms of curtailing the spread of the infestation.

D. MacKay: I'd like to go to the other side of the riding of Bulkley Valley–Stikine, part of which is in my riding — the Hazelton areas, Terrace, Prince Rupert — dealing with the return of SCI to the private sector.

We went from SCI to NWBC to NSFP — New Skeena Forest Products — and during the transfer cycle of that wood from the government to NWBC or NSFP, there was a court challenge. The transfer of the SCI mill at Smithers to West Fraser was caught up in that court action. Can the minister tell me if the transfer of the mill and the licence that was attached to the mill are still held in abeyance, given the fact that the native group that challenged the transfer of the licence — namely, the Gitxsan — sent a letter to the minister advising that they no longer had any concerns about the transfer of the Skeena sawmill to West Fraser and the timber licence?

Hon. M. de Jong: The member has correctly identified the fact that the matter is, in a sense, still before the courts. That's why I've taken some time to ensure that I both answer the question as best I can and do so within the confines that one is placed in. In fact, the member is quite correct. The original transfer of shares which gave rise to the request for ministerial approval for the transfer of licences was a matter that has been considered by the courts and, in fact, is still before the courts. A subset of that issue relates to efforts that the new owners of SCI have been making to complete a transaction with a third party relative to a particular licence.

I think the best I can offer today for the member is that we are actively working with all of the involved parties, including the first nations that are involved. The member has mentioned one of them that has offered its position on that transfer. We are working with all of those individuals to facilitate that particular transfer.

D. MacKay: If I could ask a further question along that line then: are we waiting for the natives to agree to the transfer before we actually transfer the wood and the mill to West Fraser? Is it subject to the natives agreeing to it, or is it subject to the court saying we have consulted and accommodated?

Hon. M. de Jong: What I can tell the member is that we, meaning the Crown in the right of the province of British Columbia, are working to ensure that we have met our consultative obligations.

D. MacKay: Does that mean…? I'm still confused about who is going to give the final approval. We have to consult and accommodate to the agreement of the natives or to the agreement of the court? Who is going to determine when we've consulted and accommodated?

Hon. M. de Jong: I will repeat something I said earlier that may be relevant to this discussion we're having. "Consult" to my way of thinking does not equate with a right of veto. So that is the first thing. Ultimate responsibility for approval of the transfer rests, I believe, statutorily with the Minister of Forests. The member will know from having read the Tysoe decision that Mr. Justice Tysoe has left open the possibility of one or more of the parties to come back before him should they feel it necessary, but that is not in my view a prerequisite or a certain prerequisite for this or any other transaction proceeding.

D. MacKay: I'll try that one more time. I gather from the reply from the minister, then, that the decision to allow the transfer is subject to the minister being satisfied that the accommodation and consultation have been met to his satisfaction. Is he the final say in whether or not this transfer will proceed, given the Tysoe decision?

Hon. M. de Jong: The short answer is yes, though that decision is subject to a judicial review.

Again, going back to SCI and the fact that it's now back in private hands…. Given the selling price and the licence that went with the company assets, when we're looking at some of the changes that are coming about through this new legislation with the compensation for the 20 percent clawback that's going to take place, do we have any idea as to the dollar value of the clawback portion of the tree farm licence that the Crown is going to have to compensate the new owner?

Hon. M. de Jong: The member will know that as part of the legislation that passed through this House

earlier this session, we have laid out a process, a procedure by which compensation to licensees impacted by the takeback will be calculated. That is the process that will be applied to SCI. There will be a negotiation, I'm sure — as there will with the 27 or 28 licensees listed in the schedule. What I'm not going to do on the floor of the Legislature — I'm sure the member's not surprised about this — is lay out the minister's dictum on what that volume is worth. We will have that discussion, negotiation, as per the compensation provisions of the earlier legislation.

D. MacKay: Just to follow on that. I can appreciate the lack of desire to tell me what the value of the compensation package is going to be. Does the compensation package have to be in the form of cash, or can it be in some relief from stumpage? Does it have to be cash?

Hon. M. de Jong: I've taken a bit of time, because I think the member has seized upon an important feature of how this transaction, I hope, will play out.

What we've tried to do is signal, by virtue of the allocation of some pretty significant dollars, that we recognize there is an entitlement to compensation. We have calculated that entitlement on a provincewide basis, utilizing an existing formula that has been utilized in the past. We think we have budgeted an amount that is sufficient to meet that financial obligation. At the same time, what I have said as part of the debate in this House and to licensees impacted is that we want to be flexible as we address things like the selection of cut — the selection of areas that would be returned to the Crown.

On the one hand, what I think I want to convey to the members and others listening is that we have budgeted with a view to providing cash compensation. At the same time, insofar as that discussion needs to take place and that negotiation needs to take place, we are going to try and be as flexible as possible, recognizing some of the objectives we've set out for the Crown as it relates to the tenure reallocation.

D. MacKay: Again, to the minister. Dealing with cut controls and the inability of licensees to carry their undercut forward after the five-year period, I'm just wondering: with the inability of NSFP to get up and running to run the sawmills in Terrace and in Carnaby near Hazelton, will the ramifications for undercut apply to NSFP?

Hon. M. de Jong: I understand the member's question, and I am not meaning to be mischievous in responding in this way. There is an existing set of laws in place for dealing with whatever undercut might exist with respect to licences owned by New Skeena, as an example — and I don't really want to focus in on any single licensee — and the member will know that involves making application. That remains the procedure until the law changes.

Now, based on legislation before the House that I anticipate will be debated sometime in the near future — perhaps the very near future — that set of rules may change. It may be a question the member would like to re-put to me in the context of what the committee-level debate is and what the practical impact is of the change that this section of a bill represents. I may be able to answer it better in that context.

D. MacKay: Thank you. I will keep that question in the back of my mind for committee stage on those other two bills when they proceed through the House.

Another one I would like to address to the minister has to do with roadblocks on B.C. Forest Service roads. I heard you, in discussion with the member for Prince George–Omineca, dealing with Forest Service roads. I wonder: given the fact that we in the Hazelton area saw roughly 70 loggers put out of work because of the actions of one individual, is there a protocol in place that would allow for the removal of roadblocks on B.C. Forest Service roads, given the fact that they are public highways and public moneys have been expended on them?

I wonder if the minister could explain to me what the protocol to remove illegal activity is on B.C. Forest Service roads.

Hon. M. de Jong: Again, the short answer is that there is. The protocol is one that involves both the Forest Service and the Attorney General's ministry, and it — I must confess I could not authoritatively walk the member through step by step — does involve the obtaining of requisite orders. It does relate generally to involvement by the RCMP and ultimately the application for orders from the Supreme Court of British Columbia.

There are benchmarks along the way for how that protocol is carried out and who has the various responsibilities, both in terms of the Crown and the applicant in the scenario the member has referred to — generally the licensee. That protocol exists, and it is the one that is followed in the types of scenarios the member has referred me to.

D. MacKay: I wonder if the minister could tell me which ministry is the lead agency in dealing with issues of roadblocks on B.C. Forest Service roads. Is it the Ministry of Attorney General? Is it the Ministry of Forests?

Hon. M. de Jong: I'm going to answer the question in a way that, hopefully, is helpful. There is clearly Forest Service involvement at the early stages and quite possibly the latter stages, but when we get to a point where it becomes necessary to apply to the courts for any kind of order or enforcement order, the lead shifts to the Attorney General's ministry. That is not to say that the Forest Service doesn't play a key role in terms of providing information that might be provided to the court in affidavit form in support of an application, but

D. MacKay: Thank you for that response. I wonder if the minister could perhaps explain to me, then, because he used the words "when it was necessary they would go to the next step, to the Attorney General." Given the fact that that roadblock…. The roadblock I refer to, of course, was set up and was in place for a number of weeks. I suspect that if logging were to resume tomorrow, the roadblock would be back in place, keeping about 70 loggers from working in an already economically depressed market.

I just wonder if the minister could explain to me his understanding of when it would be necessary for the Forests ministry to get the Attorney General's ministry involved to remove the roadblock, to allow these people to go back to work on public lands.

Hon. M. de Jong: I'm not sure I can offer the member an authoritative answer around what constitutes the triggering event.

I may also have inadvertently left off some relevant information to the discussion we're having. That is that in some cases, depending on where the alleged infraction or roadblock activity is taking place, it may be the licensee that initiates the action before the courts.

There are potentially at least two different circumstances. I think it is fair to say that the Forest Service would examine the situation in concert with the AG's ministry and potentially obtain information from various sources, including the impacted licensee — the owner of the road, if it's not a Crown-owned road.

I will say this: the question the member raises is a legitimate one to the extent that there may be some standard triggering event. I will look into that and happily provide it to the member. I just don't have that answer at my fingertips at the moment.

D. MacKay: That concludes my questions to the minister. I look forward to the response, from the ministry, dealing with the triggering effect that would allow the ministry to get involved in the removal of illegal roadblocks.

R. Sultan: Minister, my friends in the forestry industry are intrigued by your new legislation setting aside $200 million for compensation of forestry tenure holders for the 20 percent takeback in the forestry plan. Some might do the arithmetic and conclude that by dividing $200 million by 20 percent, your plan implicitly values the annual allowable cut in British Columbia at a billion dollars. Is that what is implied by your plan and the bill?

Hon. M. de Jong: Again, I think the short answer is that that would not be the proper way of analyzing what the government has done. First of all — and this bears repeating — we are not talking about 20 percent of the provincial AAC because, of course, we have exempted certain licences. It is basically a calculation of 20 percent of the replaceable volumes over 200,000 cubic metres. That is the first thing we need to point out.

What we have done in coming up with the $200 million figure…. I should say in passing — and the member has vast experience in this area — that it's interesting how, when you're selling the product, your selling is said to not be worth much, and when you're buying or in this case buying back, it suddenly assumes an entirely new or different value. But that is a product of the negotiation.

What we have tried to do is apply a standard valuation technique that is actually embedded in the legislation — or has been for a period of years and has been utilized in the past — and applied that methodology to calculating what the global compensation figure should be. It is an estimate. We think it is a fair representation of what the compensable value will be as we move through this, though I'm sure the member is hearing, as I am, from those who will point out that their particular share of the profile is worth far more than this calculation might give them credit for.

R. Sultan: My second and final question, then, would be…. The $200 million is, as you say, an estimate. I suppose there is a possibility that that might not prove to be sufficient because of the uncertainty of this world. If that is so, how does this impact your ministry's estimates and three-year plan? For that matter, how might it impact the Finance minister's overall plan to balance the books in '04-05?

Hon. M. de Jong: I am reminded that — though this is not probably something the member's friends in the forest industry will want to hear — I suppose it could represent an overestimate as well. That is likely not the kind of challenge that those individuals making those submissions to the member are cautioning him about.

We have developed a methodology that incorporates, at the end of the day, where there's no agreement on arbitration procedure. The scenario the member has referred to is not outside the bounds of the possible. What we think we have, and have proceeded with, is a fair estimate. In the event that as we move through this, we have either overestimated or underestimated, this House will have an opportunity to assess and rate us in our efforts.

M. Hunter: I just wanted to canvass a couple of issues briefly with the minister to try and, if anything, increase my understanding of the forest business and maybe put a couple of ideas in the minister's head, because I know he's always receptive to new ideas.

One of the issues I wanted to canvass is a very sensitive one. It has to do with the export of raw logs. As the minister knows, in my riding I've been asked a lot of questions by individuals, union members and those

not associated with unions — not even associated with the forest industry, actually — who make the point that exporting raw logs is exporting jobs. I have been around long enough to know that if that is indeed a proposition which carries any truth, it's not a linear equation. I saw in my previous career that exporting of fish doesn't necessarily mean exporting of jobs from fish processing.

I've been trying to understand this issue. I know it's got many sides to it, but I have been approached by a number of private land owners — large and small — in my riding, who are affected, of course, by the private land export restriction.

What I really would like some understanding from the minister on is: how come the log market in Canada is so undervaluing our fibre? If I listen to the reports that I'm told about, in the United States and in Asia the same piece of hemlock or cedar that our mills might pay X for, the price is three X overseas. I really have some difficulty — and I think some of my constituents do — understanding that economic relationship. Maybe the minister could shed some light on it.

Hon. M. de Jong: Thanks to the member for raising the issue. I will say, as I have a couple of times in this House over the last couple of days, that the log export issue ranks right next to and slightly ahead of fibre waste as the two issues that drive British Columbians nuts, whether they're involved directly in forestry or not. The notion that logs leave the province unprocessed is something that for most British Columbians — not all, but for most — is fundamentally at odds with our desire to maximize the benefits and the value of the fibre that we grow in British Columbia.

Having said that, let me share, for the member's consideration, a second observation that I have made over the time I've been on this job. That is that the focus and the issue and the degree of attention the issue has attracted over the last period of time are largely a symptom of a sick industry. In other days, when our industry was earning a healthier return, the scenario that the member has quite accurately described didn't exist. In fact, it wasn't all that long ago that we actually imported more fibre into British Columbia than we exported.

Now, we have to be careful. We still exported, and the relative qualities of that timber were different. My recollection is that many of those imported volumes represented pulp wood, pulp logs, and there was still a degree of export. But while we are committed to maintaining those restrictions that presently exist around the export of raw logs, we must, I think, also accept that the objective we must realize upon is creating a competitive industry in British Columbia where we're actually in the market to bring fibre into British Columbia, where we are placing those demands on fibre outside of our borders. That has been the situation in the past. It can be the situation again.

In the meantime, however, British Columbians with certain exceptions — and the member has pointed to one of those groups: private land owners — have said that with respect to timber harvested off the lands that they own via the Crown, they want that fibre processed in British Columbia. Therefore, the restrictions that exist around the export of those logs are going to remain.

M. Hunter: Thank you, minister, for that. I appreciate the restrictions are there, and I appreciate the social and economic judgment of my fellow citizens that puts that demand on us. I guess the private land owners do scratch their heads, but I don't want to continue on the point. I think the minister's made the reasons quite clear.

I do want to ask a question that I think is related, because he talked about actually putting an industry together that's healthy, which would actually be demanding imports of fibre to produce market-ready goods. It has long been a concern of mine that the relationship between Canada and the European Union — of which I am also a citizen, by the way — has been eroding over the years from a trade point of view.

It was interesting that a week ago some of us were at a function where a quotation was given to us from the late H.R. MacMillan. One of the issues in 1932, 71 years ago, was that the B.C. industry was concerned about the displacement of B.C. lumber by the Russians in the U.K. market. Everything changes, but nothing changes. The French have an expression: plus ça change, plus c'est la même chose.

I want to ask the minister about the marketing initiatives that we're undergoing as a government and the assistance we're providing in working with the industry on Asia, because I understand the attraction of a billion people in China looking for houses. I don't understand why we would apparently turn our backs on our old former trading partners where there is also a market.

I was in the U.K. recently, and I learned that there is an expectation that in addition to new housing for the population increase, the U.K. housing stock is getting old. There are apparently four million houses to be replaced in the next five years. Now, I don't think we're going to replace brick construction with frame construction in the U.K. very quickly, but I do know that even brick-built houses need floorboards, rafters, joists. Have we, in our marketing initiatives, abandoned any possibility that Europe…? With currency exchange rates certainly very attractive, have we abandoned Europe, or are we still in there with the industry, with a hope that we can keep producing for that market?

Hon. M. de Jong: For a moment I thought the member was going to invite me to launch off on a dissertation of a Mitchell Sharp–like third-option debate from the early seventies. I think the member makes a reasonable point — that is, the need to consider existing markets whilst one explores new markets.

The brutal reality is that in Europe and increasingly in very close proximity to Europe, there is a fibre over-

supply which probably does nothing more than add to the competitiveness challenges we face from a price point of view. I wouldn't like to think that we are abandoning the European market. Depending on the products we're talking about, of course, the European market is fundamentally important for us. For pulp, for example, the European market is hugely important, and we devote a great deal of energy to sustaining and building up and expanding that market.

The other point the member raised, which I think is worth all of us remembering, is that you don't alter a building culture overnight. Having said that, I think we have to be imaginative about what it is we are trying to achieve in new markets, whether it is on the outskirts of London or the outskirts of Beijing. In some of these markets there is, or could be, a huge demand for finishing products — for flooring, for subwalls. In addition to the structural component of a new home, there is growing demand for some of the other things that go with wood-finishing products. In the Far East there are products from Europe competing with us for market share. Depending on what we're talking about, the European market remains as important as ever. But boy, the member was right on: we compete in North America with Latvia and Baltic State products, and the competition for a share of the European market, given the proximity of those producers to that market, is even tougher.

M. Hunter: I think I almost did get a Mitchell Sharp dissertation. I would like to know whether the minister plays the piano as well as Mitchell does.

I just want to pursue that, though. Thank you for the reminder about pulp and the importance of the European market. I guess that does raise questions in terms of our marketing initiative. Is our marketing initiative also aiming at maintenance of a Canadian presence beyond the corporate level in the European market?

Maybe I can ask my question in two parts, and then I will have finished. The other is…. My sense is that the difficulties of marketing that have to do with distance and different culture and the European Union and its processes arose at a time when, frankly, the Swedes and others — the Latvians latterly — were involved in certification programs. If you go to Europe, you will see that every Tetra-Pak has a little seal on it saying: "This was made from renewable, sustainable forestry resources."

It seems to me that from what I'm hearing from our industry, we are in an increasingly competitive position vis-à-vis certification. European consumers have lots of money to spend, certainly, by Canadian standards. I just want to make the point — and I appreciate the minister's answers — that I just think that to turn our back…. In the efforts that we are making in spending public money to help build our forestry industry, we should not be forgetting our European roots, not forgetting that there are new circumstances surrounding our industry that I think we can benefit from.

P. Bell: I have a series of questions and somewhat limited time, so perhaps I'll try and zip through them as quickly as possible. The Minister of Sustainable Resource Management has been putting a strategy together around the working forest concept. They have designated or established about 47 million hectares as the ability or, certainly, as kind of the growing area that might make sense for a provincial working forest.

I know it's in detailed consultation now, and I know it actually falls under a different ministry, but I wonder if the minister could give us an indication of how much of the existing provincial land base or working forest land base is classified as non-sufficiently regenerated or restocked — NSR.

Hon. M. de Jong: The information I have is that as of March 31, 2002, there was a total of 633,900 hectares of NSR lands, and that represented a decrease of about 6,500 for that fiscal year.

P. Bell: In the service plan I see there is a planned increase in the amount of land lost to wildfires in '03-04 and beyond. I'm wondering if the minister can just expand on what the logic is behind that. Did we have a particularly good year in the last year or two, or is there something he's anticipating that could worsen the environment as we move down the road?

Hon. M. de Jong: It's probably not a lot more complicated than this. Both in terms of the money that is spent on a year-to-year basis and projecting impacts of wildfires, we work on a system of five- and ten-year averages. We have, fortunately, been on the low side over the last number of years, and I suppose this is the bureaucratic equivalent of the day of reckoning.

P. Bell: I guess the concern by a person who is just reviewing the plan might be that the ministry was anticipating doing less in the future towards fire management and kind of cushioning the potential that may occur in terms of that. Perhaps I could get the minister to just expand on his plans around fire management for the '03-04 fiscal year. Does he anticipate any significant changes as a result of his existing plan and budget?

Hon. M. de Jong: The 30,000-hectare projection is based on that five-year averaging. Now, the hope is, of course, that we can continue to drive that down, to keep it well below that five-year average. For the purpose of budgeting and for the purpose of laying out objectives within the service plan, I thought it prudent to rely upon the data and the methodology that have been employed in the past. Presumably, if that methodology continues to be employed moving forward and the numbers remain as low as they have been, in subsequent plans that 30,000 figure will also decrease.

P. Bell: Could the minister outline for me what are the changes in the complement of compliance and enforcement staff within the Ministry of Forests?

Hon. M. de Jong: I think the first point I want to make — and I appreciate the question, because it goes to the heart of something I am trying to ensure that British Columbians understand — is that we will, in the year moving forward, have just over 300 compliance and enforcement officers working within the Forest Service. That is, admittedly, a slight decrease from where we have been in the past, but here is the point I want to emphasize. Unlike the past, those 300 FTEs will be dedicated full-time to the task of compliance and enforcement.

By virtue of some of the other changes we have made relevant to planning processes with the Forest and Range Practices Act, we'll actually be out on the land base to a far greater extent than we have seen in the past. That is in the process of being implemented. It calls for a degree of training that has been taking place. I guess the short response is that we are going to have a far greater presence with 300 full-time compliance and enforcement officers than we have had in the past with a slightly larger contingent of part-time officials.

P. Bell: That explains, as well, the strategy moving forward and how we are going to ensure that compliance enforcement is maintained or improved upon. That's helpful. I know that has been a concern generally out there.

I would like to move on for a few minutes, if I may, to a series of questions around the forest investment account, the first one being: when does the contract for PricewaterhouseCoopers expire?

Hon. M. de Jong: The agreement has been extended until March 2005, and my recollection is that there is a further option to extend to 2007, exercisable at the ministry's option.

P. Bell: I wonder if the minister can outline the criteria for the delivery of dollars as they relate to land base programs versus the cost of administration by PricewaterhouseCoopers. In terms of a percentage, how many dollars or what percentage is spent on the administration of the programs by PricewaterhouseCoopers and their various accessory organizations? How many dollars are actually delivered to land base programs?

Hon. M. de Jong: Overall, the administrative costs for the FIA funding allocation is 9 percent, and that takes into account the ministry's and PricewaterhouseCoopers'. With respect to the land base programs specifically that the member has referred to in his question, my information is that it works out to about 9.6 percent, but let me verify that.

P. Bell: So we have 9 percent on administration and 9.5 percent on land base. Then I'm presuming that FII also comes out of that account. I wonder if the minister can just give us an overview of what other expenditures are charged to FIA — forest investment account.

Hon. M. de Jong: Here is the categorization of the spending. We've already spoken about PricewaterhouseCoopers. The member has alluded to FII. There is the small tenures allocation. There is what we term the tree improvement. Finally, there is — I'm just going to verify for the member — a Crown land use planning allocation as part of that as well.

P. Bell: Could the minister outline for us the purpose of the small tenures allocation — what that money is used for?

Hon. M. de Jong: It provides small tenures like woodlots and community forests with a degree of capacity to access the same programming as the major licensees.

P. Bell: Just so I understand. If I add together, then, the dollars delivered through PricewaterhouseCoopers, the land-based programs that we spoke of earlier — the 9.5 percent, I believe, the minister indicated — the dollars that go into FII, the small tenures allocation, the tree improvement program and the Crown land use planning, that completes the funding for the program?

Hon. M. de Jong: It does, and I think there's a detailed breakdown available by category.

P. Bell: Could the minister outline for us what expenditures are included under the Crown land use planning, as he described it earlier?

Hon. M. de Jong: The information I have is that that funding is related to initiatives undertaken by the Ministry of Sustainable Resource Management — the central coast initiative, for example — and costs resulting from pursuing those sustainable resource management-related initiatives.

P. Bell: What portion of the budget does that represent — dollars and percentage?

P. Bell: Moving on, I'd like to pursue the issue of the audit process for FIA projects for a few moments, if I can. I understand that there is perhaps not an audit process but a monthly reporting requirement of companies and/or woodlots who participate in FIA–funded projects. Is that accurate?

Hon. M. de Jong: There is an audit process, but I think it would be inaccurate for me to convey that it takes place across the board on a monthly basis. In fact, there is an audit performed on a percentage of the FIA

activities taking place, and what we require from PricewaterhouseCoopers are quarterly reports that would compile their findings on the basis of the information they have requested and had provided by participants in the program.

P. Bell: I apologize to the minister. I had intended to say "monthly reporting requirement," not "audit requirement." My mistake.

Hon. M. de Jong: I think my response probably needs to be the same. The reports we get are provided on a quarterly basis.

P. Bell: If there were a monthly reporting requirement, that would simply be something that PwC is requiring, then?

Hon. M. de Jong: My information is that the report that accrues to the Crown is a quarterly report so that if there is a monthly reporting requirement, that relates to the relationship between PricewaterhouseCoopers and the various program participants.

P. Bell: That's helpful, thank you. Continuing on the line of FIA questioning, I understand anecdotally that FIA holds back 20 percent of its payment for projects over a longer period of time than is perhaps the norm for the industry. I'm also told many of these projects operate on a profit margin of somewhat less than 20 percent, leading to the project or the small company carrying the cost of subcontractors, and so on, for a substantial period of time. Is this a directive through the ministry, or is it perhaps something being done by PricewaterhouseCoopers?

Hon. M. de Jong: It's a good question. I don't know the answer. I'll try and find out.

P. Bell: Thanks to the minister. That would be good, because it has been problematic for a number of my constituents.

My final question, as it pertains to FIA, would be: just what exactly was the process of awarding the FIA management contract to PricewaterhouseCoopers, and what role does Forintek play in the management of FIA, and how was that awarded?

Hon. M. de Jong: I can answer the first question. I wasn't paying close enough attention to hear the second one. The contract was awarded on a competitive basis, and there was close involvement by the provincial government Purchasing Commission to ensure that the processes followed were the correct ones for a competitive bid process.

P. Bell: Thanks. The second question pertained to the involvement of Forintek in the FIA pool of funds and if, in fact, that was awarded competitively or not.

P. Bell: What part of FIA is Forintek involved in, and what do they actually do for us?

Hon. M. de Jong: I apologize for the delay. I was trying to get an answer that had the advantage of being succinct and accurate at the same time.

In fact, Forintek, as a result of being awarded the competitive contract a year ago, played a central role in the administration of this fund, so theirs was a very key involvement in the process. Of course, they have some other involvements as they relate to things like…. The member for Nanaimo was talking about the development of the building code in China that they have been fairly intimately involved in.

They also spearhead some leading-edge research activities. I think the question related to the administration side of the FIA division, and they clearly were awarded the contract to play a leading role in the administration of that account.

I'm wondering if the minister, first of all, feels comfortable talking about the new market pricing system or if we should leave that to, perhaps, committee phase of 29. Just an answer to that first.

Hon. M. de Jong: I'm certainly comfortable discussing it, although — as the member rightly points out — the legislation that gives rise, in part, to our ability to implement that model is presently before the House. That may be the more appropriate time to discuss it.

P. Bell: Okay. Noting we only have perhaps five minutes or so, I'll move on to some questions around the minister's service plan as it relates to area-based management.

I note that his objective is to move from 11 percent area-based management to 25 percent this year, 50 percent next year and 100 percent by '05-06. I'm wondering if the minister can tell us what some of the strategies are that he intends to employ in order to make that transition.

Hon. M. de Jong: I should say it's an important issue the member has raised, because it really does go to the heart of how we manage and make the shift from a volume-based world to an area-based world. I should point out to the member — and I know he knows this — that a small number of the timber supply areas are already being managed under an area-based model through some pilot projects and structures that were set up, and include innovative forest practices agreements and forest code pilots.

Originally, the intention was to bring defined forest area management into force through legislation. Then the expectation was that area-based management would build over time as licensees formed coopera-

tives within their timber supply areas where circumstances required that degree of cooperation. We have worked with and consulted with the industry over the past year, and we are still looking now at how we can, through a collaborative model, get to define forest area management or area-based management through that collaborative model and perhaps with some legislative initiatives.

In order to promote that, FIA funding is being made available to cover some of those costs and to provide them with an opportunity to form some of those necessary arrangements. What we hope to achieve is that over the course of the next year, 30 to 50 percent of those DFAM collaboratives will form — be working, be operational on the ground — and will create the kind of incentive that we need to create to attract others to the fold.

Hon. M. de Jong: I move the committee rise, report resolutions and seek leave to sit again.

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

The House in Committee of the Whole (Section B) on Bill 27; H. Long in the chair.

J. MacPhail: Does the minister or his staff have — I think it's called — a red-line version of the Forest Act? Let me just say why I'm asking for this. I'm not sure whether it's called "red-line" or whatever, but it's an amalgamation of all of the changes. It's up to date. Here's why. I'm working with these books over here, which are excellent books, but the act has been amended at least twice since these have been published. I'm wondering: does the minister have that?

Hon. M. de Jong: Thanks for the question. I think what I have that I can make available to the member…. I'm not sure it's a red-line version, but it is a consolidation that I think would provide her with an enhanced ability to track these changes. What I will need to do either while we begin or during a short break is try to get a copy of that to her. If the member is content with starting, I may be able to ask Mr. Grieve, Mr. Archdekin or Mr. Konkin to obtain that document for her.

J. MacPhail: That would be fine, because I have some probing questions under section 1 that are of a general nature in terms of consultation. We can carry on debating if that version can be printed, and I appreciate that. Just to note, the Forest Act that I'm working with hasn't been updated since November of 2001.

Of course, this is the second of a triptych of legislation that the government has said will profoundly change the way forestry is carried out in this province. We passed Bill 28, the Forestry Revitalization Act, at the end of March. There's this bill, Bill 27, Forests Statutes Amendment Act, 2003, and then Bill 29 will come after this.

It is my understanding that this legislation, as I read it, changes the Forest Act to impose, to put in place, the standing timber market — in other words, to change over the system to permit for a market through standing timber. It's fundamental. There's no question about it, so I want to ask some questions about this.

We had a news conference by the IWA, the CEP and the First Nations Summit this morning. They called upon the government to postpone passage of this bill, Bill 27, and Bill 29 because they said that there had not been enough consultation. I thought it was interesting to note at that news conference that they didn't say for the government to abandon its desire for change. They just wanted the government to slow the process down so that their voices could be heard on these matters and the concerns addressed.

Could the minister please outline what consultation led to Bill 27? What was the process that led to Bill 27?

Hon. M. de Jong: I will endeavour to answer the member's question, but I wonder if I might begin by placing this bill within the context of the change that the member has accurately described as taking place. Not to reduce this too much, but in fact the key feature of this bill is the replacement of the small business for-

est enterprise program with the timber sale program. Now, that is admittedly a different mechanism by which to sell access to a portion of the Crown-based harvest, but on its own it doesn't change anything beyond that.

Now, what does change, potentially as a result of other legislation, is the amount of volume that will flow through the timber sale program. We anticipate that to increase fairly significantly as a result of tenure reallocations. That's the first thing I think I would like to say. If we did nothing else but introduce this bill, what we would have is a different delivery model — admittedly a more arm's-length model for selling timber much as the Crown sells it now, although on a more competitive basis. I make that point.

The essence of the member's question, though, is: what has given rise to this, and what consultation has there been? Well, two things. This is about as specific a response to the pledge that was made around placing the small business forest enterprise program on a sound commercial footing as one can make. We have spent, and I have spent the better part of a year and a half discussing with stakeholders and participants in the small business forest enterprise bid program why we think this represents a logical change, and why we think it is necessary to place what was the small business forest enterprise bid program on a sounder commercial footing.

All of the consultation that the member and I have talked about in the past has taken place….

The Chair: Would the members please keep their voices down when the minister is talking.

So, consultation with all of the stakeholders, participants in the small business program, licensees, communities, first nations…. Anyone that has an interest in accessing Crown timber has an interest in the mechanism by which the Crown delivers that timber. I'm sure there are more specific questions, but why don't I start there.

J. MacPhail: The minister is right to say that on its own, this bill changes the way timber is auctioned, and it expands the small business enterprise program, which now covers about 13 percent of sales, to about 20 percent of sales. That is the fundamental shift toward a market-based system. It's included in this legislation, and with it are all sorts of corollary effects.

For instance, some would describe it as the beginning of the end to the social contract where communities directly benefit by law from access to that timber. That's why this news conference was a bit of a shocker this morning, if you ask me — a news conference amongst the IWA, the CEP and the First Nations Summit — because the very people the minister says he consulted with were at this news conference saying that they hadn't been talked to, that they hadn't been consulted and that it's time to slow down and let them have a say in this.

I have also, in other forums, debated with various ministers the effects of these forestry changes. For instance, with the Attorney General I debated the effect of these changes on treaty negotiations.

Can the minister be specific about how those consultations took place? Were they one-on-one? Were they in public forums? Was it band by band? Was it tribal council by tribal council? Did he have all the unions in one room? How did they occur?

Hon. M. de Jong: I think the short answer is: a combination of all those methods and more. I know this isn't the essence of the question, and it is probably dangerous for me to speculate about what might have been in the minds of the people who gathered and issued a press release this morning, but I will volunteer this to the member. Insofar as I understand the concern around the breaking of the social contract, it has less to do with the contents of this bill than it does with the changes that are contained in Bill 29. I know the member has plenty to say and submissions to make around Bill 29.

I think there are people who have expressed opinions around what the model for timber pricing should be in British Columbia. We, candidly, have undertaken a fairly comprehensive examination of the competing views — the log-based system versus a standing timber–based system. The system that emerges out of this is a standing timber–based system. We think there are sound reasons for that, but it was very much a subject of discussion with the IWA directly. Again, I'm not sure to what extent there is concern within an organization like the IWA about flowing more volume through a small business program — or a timber sales program, as it is now known — versus concern around the model for timber pricing and relying upon data from other transactions.

I should say, as I have said to the IWA, I'm not sure that anything here flies in the face of, is at odds with or is inconsistent with our drawing on some of that data. It is fair to say that the timber-pricing model we have signalled we favour is one that a group like the IWA does not, and they have said so. They have said so fairly clearly, but we have had plenty of meetings about that.

Similarly with first nations. Some groups — the summit, Chief Ed John — again signalling, discussing the direction that we want to go in…. Some first nations have reacted very positively to the direction we are headed in. Others have reacted quite negatively. Then there's a whole group in the middle who, I think it is fair to say, are taking the position: we'll wait and see where this leads.

Communities have asked: in addition to what the government is saying it intends to do around things like community forests, what does a system built around the timber sale program mean for us? I will

also say, as we're having a fairly general conversation at this point, that I think the essence of the concern I have heard around this shift relates not so much to what one reads in the pages themselves but to the acknowledgment I have made — sorry, that's incorrect; it is in the pages, and we will get to it — that this is very much a system built around offering timber on a purely competitive basis.

There are stakeholders — proponents — out there with whom I have had that discussion, who are troubled by that. It's a fairly fundamental difference of opinion. These changes do go to the heart of that question, and that is: on what basis do we offer timber for sale to people in British Columbia?

At all of the mechanisms, the public forums that took place — I don't have the list with me — around the province, that question was put fairly categorically by any number of people. It often went like this: "If you do that, I cannot compete." People made clear their concern around the move in that direction. I, in turn, would respond that I thought there were other facets of the package that provided additional opportunities.

At the end of the day, I offered my opinion that we have to compete. We have to offer the timber on a competitive basis. Admittedly, it is my view that that is the feature to this bill that people who are troubled focused on.

J. MacPhail: Well, this bill makes it possible for people now to go in and have access to standing timber unencumbered. They don't have to create a mill. They don't have to offer jobs. This creates the system by which that market can be created — the standing timber.

This bill is the bill that allows the government to say 20 percent of our timber will be sold on the market. That's what this bill does. I fully understand, as I said at the beginning, this is a triptych. These are three pictures — Bills 27, 28 and 29. The government can't operate without all three, and the public, the people I'm speaking with, are concerned about how all three work together.

The minister is saying there were public forums around this. I know there was a government caucus committee that went out and held hearings, but those were very early on, and they were about the Forest Practices Code and changes in that area. I re-read those public hearings, and certainly there was nothing in those public hearings that would have led anyone to believe that Bills 27, 28 and 29 were going to come forward.

There were discussions in the public around the softwood lumber dispute where the minister said what he was going to negotiate at the softwood lumber dispute, but certainly the vast majority of the areas that this government says it cares about were not at those discussions around softwood lumber negotiations.

In fact, the people who are approaching me now live in those very communities that this government seems to care about — the heartlands. I like to call it the coast and the interior. This government talks about the heartlands strategy every time it gets up, and yet it's these very people who are raising concerns about Bill 27 because of lack of consultation.

The actual Bill 27 concept of 20 percent of standing timber being put up to auction was put to public consultation when?

Hon. M. de Jong: I have done this, I'm afraid, rather clumsily, so I will back up a bit. To try and put this bill into some kind of context, the changes we are seeking to make, including the shift to market-based pricing based on a standing timber auction, we could do without this bill. The volumes would flow through the existing small business program, so it would be the existing delivery model. Based on the other pieces of legislation, we could flow that volume through the existing small business program and we would achieve the same result.

I don't want to mislead the member in any way. It is a key part of the shift to a competitive framework, but it is not, I think, as essential as the member has suggested to making the shift we want to make.

Again, the question relates to where the discussion was around the 20 percent. In fairness, the member has alluded correctly to some public forums that took place around the results-based code, some of the public forums that have taken place around the softwood lumber dispute. Between November and March a series of public forums took place around the province — and I can get the member a list — which I attended: Campbell River, Cranbrook, Prince George, Smithers. There are about a dozen where this was discussed specifically. That is, how do you sell timber to people? On what basis do you sell timber to people? What is the correct model for timber pricing?

About the member's specific question, the 20 percent, I can remember a number of those gatherings where people asked the question very pointedly in a crowd of 300 or 400: "Minister, how much?" My reply to them was that the advice I had then and have now is that in order to credibly drive a timber pricing system based on auction data, minimally 20 percent of your volume needs to flow through that system. For some that was too high, but for a lot more it was way too low. They suggested that in fact the volumes had to be higher. Wherever you fell on that line of argument, it was one that was had in communities right across the province, as I say, between November and March of this year.

The Chair: Leader of the Opposition, I'd just like to…. Maybe the line of questioning would be more appropriate under section 2 of Bill 27 rather than section 1.

J. MacPhail: Yes, I'm going to have further of this discussion in section 2, but the answers here will guide me in the other sections, Mr. Chair. If I could just….

J. MacPhail: Of course, this bill does change the social contract. We're getting ahead of ourselves, but clause 12 of this bill does change the relationship between tenure and what you have to do with that tenure for woodlot owners, for instance. This bill does that. Of course, that concept is exacerbated in other bills.

What the minister is trying to say here is that all sorts of discussions occurred about expanding how much goes up for auction, about having a log market or a standing timber market. But at no time…. Perhaps the minister can clarify for me: was it also associated with the breaking of what we like to call the social contract? What I mean by the social contract, so people know, is the longstanding agreement that public lands should be used for the public good. It's been in existence for more than 50 years, where if a company gets access to the publicly owned timber, they have to return public good to the community — either through job creation, mill placement or cut controls.

All of those were in place, and now the triptych is going to…. Actually, it's not a triptych; that paints a picture. This is a trilogy — one might say a trilogy of horrors. The trilogy of bills says that the social contract is no longer required. So sure, there could have been discussions about whether it should be expanding the small business enterprise program from its current 13 percent to 20 percent or whatever, but at no time did people say, "Oh yeah, make sure they don't have to manufacture it in my community. Make sure the jobs are gone. Make sure cut control is gone" — all of that.

Is it the minister's view, then, that major leaders like Dave Haggard, Dave Coles and Ed John missed those meetings and therefore all of the discussions about the consequences of moving to a timber auction were discussed in public forums?

Hon. M. de Jong: The first thing, if I could…. I have a rather weighty document, and we can get a better copy for the member.

No. Further to the member's comments, I'm not saying that at all. I am saying that at the numerous public forums and private meetings that took place with some of the individuals that the member is referring to, we talked about these issues.

The member attempts to summarize their positions on some of these questions, but you know, at various public forums around the province — and I know these are not things that the member necessarily wanted to hear — we heard from countless individuals who stood up and said that the present regime around cut control is nonsensical.

There are people with different opinions, and the government has clearly laid out its preference for one of those opinions. But on all of these issues there was a discussion, and submissions were received from proponents for any number of approaches. The member points out that there are individuals troubled by some of the choices we've made, and I know that with respect to some of the issues the member has just referred to — appurtenancy, cut control and licence transferability — we're going to have a wholesome debate. At the risk of repeating myself, I did not get the sense…. I'm trying to be fair about where there was concern expressed.

The concern I have heard expressed around the expansion of the timber sale program has tended to relate to the question around competitive offerings, where we are changing some of the provisions. Well, there was the bid proposal system, which we can talk about when we get to the appropriate section in the bill. There was a range of opinion expressed at these, and, yes, the member may not like it, and Chief John may not like it, but there is a whole host of people out there who believe that the changes this bill contains and others, if not perfect, are a move in the right direction to improve the competitiveness of the B.C. forest sector.

J. MacPhail: What we're talking about here is…. This bill does deal with the timber sale licence program, expanding it to 20 percent, and it doesn't deal with the 20 percent takeback. But this bill itself allows this government to claim that almost 40 percent will be up for competitive bid. This bill is a very key component of the government's claim to changing to a market system and the competitive bid system.

Well, you know, it's very interesting. For a government that says it wants to be open and transparent and accountable, and then they rely on going to meetings of 300 or 400 people, as the minister says, where there's a diverse range of opinions at best, and then take that and table legislation without any further discussion…. That's what has people just going crazy, up in arms — the people most affected by the forest industry, the first nations and the people who actually do the work in the industry itself.

What I'm trying to figure out is how that consultation in any way had any impact on the government that made these announcements pretty much 15 months ago in December of 2001. Not much has changed since then. So all of the consultation that the government claims to have done hasn't changed anything one iota.

Let me just say one other thing. I know there may be those advising this government, or the government itself, saying: "Well, after having these public meetings, if we have a policy in place that nobody likes, then we've done our job." I don't espouse that point of view. I think it's divisive. I think if you say, "Oh good. We've done our job because everyone is mad at us," it is simply inappropriate when we're talking about the largest portion of our productive economy in British Columbia. It's divisive, and it's wasteful to do that.

Let me just put this to the minister — a very concrete example, then, about what people, if any, embraced this policy of expanding the competitive bids for logs. To put this into context, Mr. Chair, what the First Nations Summit is saying is that they have been completely hamstrung in their ability to have their duty to accommodate recognized by these changes. They've been completely hamstrung by the government changing access to timber that may help settle treaties.

Here's the example: the Canfor mill at Houston. Now, I know that the member for Prince George–Omineca may be asking questions about this, and I apologize if indeed I'm stepping on his area of questioning, but this is what got people so concerned. It's an article that just appeared last week, April 30, 2003, and it's entitled "Canfor to Build the World's Largest Sawmill in British Columbia."

Of course, it's by a journalist that I happen to admire greatly, Gordon Hamilton. The article probably was edited like crazy, because it's all of the good news in the article. There's nothing about job loss here. But let me just read it. It says:

Okay, now let me just stop here. We have one mill, the supermill, that's going to increase its capacity by one-third. Where's it going to get the lumber? Where's it going to get the logs to do that? How does it work under the new system, and what happens to those communities that used those logs before?

The Chair: I would like to remind the member that the question here would be better answered under other sections of the bill. The section we're speaking to now is….

The Chair: Well, I think section 1 does not cover that. We could cover that in the other parts of the bill.

Hon. M. de Jong: I must confess, when I listened to the article re-read to me, I am not filled with the foreboding that apparently others are. The decision, I presume, is influenced somewhat by the AAC uplifts in excess of five million cubic metres, which are part and parcel of the incredible beetle infestation that is taking place in that part of the province.

Now, one can question how long that cut is going to be sustainable, and I think that is a legitimate question and something operators need to consider. But I think at the heart of the issue is a corporate decision that relates to a phenomenon we are seeing around the province, where operators are seeking to maximize the capacity of their processing facilities.

We have seen in many quarters, for example, the advent of the two-shift operation from the one-shift operation and the three-shift from the two. Finding ways to maximize those efficiencies and drive down the per-unit cost is a phenomenon that has begun. I think it has been accelerated by the anti-dump levy that has been imposed south of the border, and it is a phenomenon that I believe will continue.

There is a significant source of additional fibre that a facility like the Houston plant is undoubtedly going to rely upon moving forward.

J. MacPhail: Yes, except that Canfor is going to shut down other mills. This supermill is a supermill, where other, smaller mills are going to close down. I'm sure the member for Prince George–Omineca will have questions about this, because towns like Fort St. James are going to be affected by mill closures.

We have a situation where the social contract is now broken, and companies like Canfor can get into having one supermill where they gobble up a whole bunch of fibre — timber — at the expense of other communities. So "I'm all right" — Houston — but other communities are going to be very badly affected. In fact, the net job loss is in the hundreds. The net job loss, as a result of this supermill, is in the hundreds.

Now, I was interested in the minister suggesting that somehow it's the beetle kill infestation that's giving extra fibre, but that's a very different kind of fibre. I doubt very much if Canfor is investing $26 million in a mill upgrade relying on pine beetle–infested fibre. I believe Canfor thinks it's going to get a steady stream of fibre that it couldn't have access to before.

Mr. Chair, I do appreciate your guidance, and I will be moving on to section 2 very briefly.

One of the problems with this legislation is what is not in the bill. For instance, we're seeing an introduction of a new way of determining the price of timber, and yet there's nothing in any of the three bills that talks about local consultation around mill closures — for instance, the Canfor supermill leading to closure in other towns. There's no requirement anymore at all for the Canfors of the world to discuss the local effects. It's the absence of those requirements now that leads me to have this discussion with the minister.

We're moving toward a market system where the Canfors can build their supermill at the expense of other communities, and there's nothing in this legisla-

tion that will talk about local development being given a chance. Or is there — somewhere else?

Hon. M. de Jong: I appreciate that the member wanted to raise this issue, and I can tell her candidly that I have had a number of discussions with representatives from the IWA and other groups around the very issue she has raised. It is probably an issue better considered by us as it relates to Bill 29, because I think it is in the context of Bill 29 that the groups who have been advocating this proposal would seek to have those kinds of provisions included.

Getting back to the point the member was making earlier around the risk associated with expansions of particular mills. First of all — and I am relying upon things that I have learned in the last couple of years — one of the biggest costs associated with the processing of timber, particularly in the interior of B.C., is transportation costs. It costs a lot of money to ship logs here and there. That is a fundamental aspect of the economics of processing timber. It's a little different on the coast. Once it's in the water, it moves around a little easier. Those economics influence where processing takes place, and that is a fact.

The only thing that would change that fact is if the Crown were prepared — the Forest Service in this case — to alter what are called points of appraisal as it relates to the stumpage system. Now, if the Crown were to do that, then the economics around transporting the timber change, and there can actually be an incentive created for moving timber. Crown doesn't intend to that, and nothing in this bill allows for that. So the economics around processing timber in the interior of the province, closer to where it's harvested, are very real. There's nothing contemplated here to diminish those costs whatsoever. That is a key piece to this, which the member needs to take into account.

I will say this last thing in passing. The example that the member offered with respect to the Houston facility versus the Fort St. James facility. My recollection is that only a few months ago the Fort St. James facility added a third shift as well. I'm not privy to what has motivated some of those decisions — and I don't think the member is either — but underestimating, at this point, the impact of a beetle infestation that now tops 108 million cubic metres of wood is something I don't do, because it is on a scale that the province has never seen before.

J. MacPhail: I wanted to make a couple of points about transportation. Things are not going to get any better in that area if this government privatizes B.C. Rail. They are simply not going to get any better for an industry that either privatizes B.C. Rail or actually shuts it down. Towns in the interior will be left with a huge, huge shipping and transportation problem. I would also suggest that companies would be left actually worse off if the rail line is privatized, as well, and doesn't share….

The Chair: I think the member should stick to the questioning on the bill, please.

J. MacPhail: Yes, thank you, Mr. Chair. I was actually responding…. It was the minister himself who brought up the issue of transportation, but thank you very much for that.

What information did this government receive about Canfor's supermill? Did Canfor have a proposal about a business plan that shows where they're going to get their timber from?

J. MacPhail: Surely Canfor must have had discussions with someone in the government about timber availability — about access to timber — because they're increasing their capacity at this mill by a third, by 150 million board feet. The laws of the land are still in place. The new laws, where they don't have to worry about appurtenancy or cut control, are still in place. So are they amalgamating their cuts or what? Are they amalgamating the forest licences to supply one mill? How is it that the government doesn't know anything about this?

The Chair: Members, I think it's important that we move on to another section, because we're far beyond the scope of section 1 in this questioning.

J. MacPhail: I'll pretend I repeated my question. This is entirely appropriate. I take your advice, Mr. Chair, because this deals with timber sales now. All of these questions and more are appropriate.

Hon. M. de Jong: Well, the short answer…. This may be a departure from past practices; I don't know. I can only speak for my experience as minister over the past two years. I have been confronted by a number of decisions regarding operating decisions by licensees that, if they involve discussions with the Crown, certainly don't reach my level. I can find out for the member whether or not there were discussions at perhaps the district level, and I suppose I could speculate. Again — and I don't want to harp on this — I suppose it is conceivable that discussions around beetle uplifts and the spread of the infestation that…. The short answer, though, is that they had no discussions with me. I can undertake to determine whether there were any other discussions, but operators make these decisions all the time.

I should say to the member, though, that I'm not in a position where I can, for proprietary reasons, disclose the specifics, but I am aware of a number of expansions. In Prince George right now there's a new facility being constructed — Brink Forest Products. I am aware of several other proposals for expansion that are either

underway or about to occur. They are decisions that operators make based on their assessment of their ability to acquire fibre either from the Crown or, alternatively, from other sources.

Part of the package of legislation that we are debating now — and "the package" meaning the trilogy, as the member has put it — does provide some opportunities to access fibre from sources other than the Crown directly.

J. MacPhail: There's nothing nefarious about a government actually knowing what's going on with a publicly owned resource; there's nothing nefarious. In fact, in the old days it would have been required, because if mill closures are contemplated, there has to be a discussion about that. The district manager and the regional manager of the Forest Service would be all over this about what's going on.

Here's what Canfor has to say about the supermill. I'll just go on: "'By increasing capacity and improving efficiency at Houston, Canfor can lower its overall lumber production cost by 4 percent,' Emerson told shareholders." Just as an aside, Mr. Chair, this is when Emerson of Canfor was announcing a first quarter loss of $1.3 million, so he was under quite a bit of pressure from shareholders to show how he was going to reduce costs.

It's not as if Mr. Emerson hasn't been forthcoming about the strategy. A supermill closes other mills. In the days past and the law of the land that exists now would require some community planning around that. There would have to be some justification around mill closures. There would have to be appurtenancy discussions. There would have to be, I would assume, discussions about the impact on the community.

Taking a hands-off approach isn't the best approach always in situations like that, especially when the government knows communities are going to be directly negatively impacted by this restructuring. Is the minister's staff aware of any discussions that have occurred around the supermill and the closure of other mills as a result of that?

Hon. M. de Jong: The advice I have is that there have been no discussions in that respect.

J. MacPhail: So do I take it that the government has this announcement: they don't know where Canfor is going to get the timber; they have no idea about what it will impact on other discussions, on treaty negotiations, and they have no idea what it's going to mean in terms of loss of jobs or ill effects on a community?

Hon. M. de Jong: In fairness, I think it's a very telling exchange. I'm not disputing the fact that we are embarked on a pretty significant change in philosophy.

The member speaks to a day where government used any number of means to coerce a particular set of decisions out of the industry. I'll give you an example. We're going to get to it in another bill — section 71. Now, no government ever used it, but it was there and was ostensibly a penalty that was designed to be imposed for a corporate decision being made.

I understand that the member is defending a regime that was in place for a long, long time in this province and had the government play a pretty central role in making business decisions. I have asked myself, as I have read through the statistics around mill closures and the impacts on communities, just how successful the Crown has been. My conclusion, which won't surprise the member, is that it has not been particularly successful, particularly over the last ten to 15 years.

If what the member wants me to admit is that there is, as part of this overall package, a greater degree of flexibility built in to make some of those decisions, then that is true. If she wants me to admit that I didn't require a licensee to ask permission before making an announcement to increase the capacity of their mill, then I plead guilty. I did not require Canfor to seek permission or to engage in a discussion to obtain by tacit or explicit approval to make this announcement. Nor, by the way, did I require Mr. Brink in Prince George to engage in a discussion with me before he announced the expansion of his facility. Nor did I ask the Cheslatta lumber company to ask permission or to engage in discussions with the Crown before they announced their desire to increase their capacity.

Yes, I suppose in another day or under another government, that is what would have taken place. I do not require that, and the regime we are moving towards certainly provides a greater degree of flexibility for licensees to make decisions, coupled with the fact that in the regime that will be in place when we are complete with this, you can have a processing facility and not hold any timber rights — not a stick. There are companies that operate on that basis now. They purchase their fibre from various sources. Under this regime, there will be more sources. They don't log at all. In fact, I am told that one of the most efficient, competitive primary processors in British Columbia in recent memory had no tenure rights at all. It was an anomaly. It was difficult under the previous regime where, as the member correctly points out, you were essentially compelled by law to do both. If you wanted to process, you had to have harvesting rights. If you wanted to harvest, you had to process. This will change that. You

will be able to harvest, if you want, and sell that fibre. You will be able to process if that's what you're good at. Or you will be able to do both. The government's not going to tell you that you have to do both, and yes, that is a big change.

J. MacPhail: Somehow the minister thinks this is all happening in a nice, sterile environment, where all of this change can occur without consequence — the bad old days. The regime of the past was bad, and this new hands-off, let-the-market-prevail is good. But there are lives that are affected by this change. There are communities that are affected by this change — hence, the announcement this morning by three major stakeholders about how this change has gone ahead without any understanding or any listening by the government to what the consequences of the change are.

I am not standing here to suggest that the past must prevail in its entirety and that change cannot occur, but what this government is doing is moving to a change in which there seems to be only one winner. That's the large companies that can build supermills, like Canfor, and we're going to get to that in a minute. This government seems to think that moving to a market system, where everybody's free to do what they want with a publicly owned resource, will only produce good. That's not true. It is simply not true.

As the Houston supermill goes ahead, hundreds of jobs are lost elsewhere. In Prince George it's the same thing. The mill there that's going ahead to expand will be at the expense of other mills — just slightly outside of town, but at the expense of those mills and communities that have built up around them. What I'm asking for is the plan for the ill effects of this transition. The good effects will probably show up, and hopefully Canfor will make a profit this time instead of a loss, the way they just did. That's the good news for Canfor, but what's the news for the towns that will be affected by the closure of their mills?

Why is it that the district forest manager doesn't know where the supply of fibre will come from? Doesn't that affect treaty negotiations? Isn't that what Ed John, the political executive leader of the First Nations Summit, is saying — that the government is moving ahead and giving away fibre supply without knowing what effect that's going to have on treaty negotiations, on certainty, on duty to accommodate? That's exactly what they're saying, and the minister has just confirmed that.

The minister and I have already had discussions about who is going to benefit from these competitive bids. There are those who would say that the move to a market-based stumpage system in no way will positively help the little guy or the little gal. It will be the big companies that will actually benefit from this move. Here's how: the larger forest companies — including ones that are based outside Canada, like Weyerhaeuser — could actually go in and outbid smaller, locally based companies for the cutting rights or for the standing timber cutting rights. The result will likely be further consolidation of the forest industry into the hands of larger multinationals. We're already seeing that in this province.

Let me ask about the studies. Let me ask the minister here. Here we are. We're talking about the B.C. timber sales agreement in section 2. That's where, as the minister puts it kind of benignly, the small business enterprise program will be renamed, I think, and expanded to now mean that there will be 20 percent uptake under the program, where the small business enterprise program will offer this 20 percent to competitive bid. Where are the studies? What is it the minister is basing his logic on, which will show that this will help the smaller companies or those that aren't the large multinationals?

Hon. M. de Jong: For the people who are riveted to this channel, they will be pleased to know that our local heroes, the Canucks, are up 1-0. But don't touch that dial.

Let me put a different twist on the question that the member has raised. She has brought a criticism to the floor of the House that is one that I have heard as well.

Hon. M. de Jong: However, this too shall change. Well, we all must go on, mustn't we?

The scenario that the member described in critical terms is where larger firms step in and bid on this timber — this increased volume that is being made available.

In fact, I have heard almost as much criticism from the different perspective, which is that in a system where stumpage rates are driven by the data we collect from the auction of this timber — and that means stumpage rates for the larger volumes that major licensees control over a longer term as part of a longer-term renewable tenure — the nervousness is that the smaller players, who are able to move quickly and identify niche markets and are sort of the corvettes out in the field that can dart and change direction quickly, will step in and upbid those increased volumes and that that will translate into higher stumpage rates for the major licensees. So there's something of a check and balance.

I suppose one can argue that the scenario the member describes could occur, but in charging up those smaller volumes, the major licensees are directly contributing to a significant increase in stumpage rates on those larger replaceable volumes that they hold. Part of the advice that I received as we moved through this discussion is that it is important to build in some checks and balances from that point of view, as well as — we'll get to this later in the bill — checks and balances against speculative bidding — surrogate bidding.

On any system built around the auction, the member will know, the challenge is to ensure one is getting accurate, non-perverted data, and we can have a discussion about whether — whatever one's view of an auction-based system — we have accomplished that. We think we have, perhaps not perfectly, by virtue of some of the other provisions in the bill.

J. MacPhail: Well, we certainly will get to that about surrogate bidding because, of course, there's all sorts of anecdotal evidence out there that under the small business enterprise program, surrogate bidding occurs and goes to the large corporations even when the program was meant to supply the smaller operators.

This expansion of the small business enterprise program, now called the timber sales agreement, in my calculations means that there will be a doubling of the volume on the coast available for competitive bid and about a third increase in the interior. Is that your estimate too?

J. MacPhail: We have a situation now where the expansion of this program to about 20 percent of volume is supposed to guide a market-based pricing system. I've got a list of people, and I want to know who he has been in touch with for a reaction to this. What about the U.S. Commerce department? What are they saying about this?

Hon. M. de Jong: At the end of the day, the response I have received is not at all dissimilar to what the member has read about. The response I am more interested in, assuming we get to that point, is the final draft version of the policy bulletin and, subsequent to that, the results of any changed circumstance review that might follow the publication of that bulletin.

I should say one more time something I have said earlier. There was extensive debate, discussion and examination of some of the options around how to achieve a market-based timber-pricing system. The first test I felt our decision had to pass was: are we adopting something that represents sound domestic policy? Does it meet with the objectives we're setting, particularly maximizing the return to the people that own the resource?

Thereafter, there was an obvious relevance on the timber-pricing side of the equation to the ongoing negotiation and discussion with the Americans, but I have nothing to offer the member insofar as a formal response. Mr. Aldonas has made some public statements about wanting to examine this, feeling that it is a positive development — but certainly nothing more concrete or definitive than that. There have been responses from the U.S. lumber coalition that are of the sort you would expect to hear from a trade adversary engaged in a dispute of the sort that we have been involved in over the last couple of years.

J. MacPhail: I know this government likes to say it's proceeding with these changes regardless of the softwood lumber dispute or the trade dispute it's having with the Americans. However, the first British Columbians heard of these changes was in a context of this minister replying, putting forward a negotiating position to resolve the softwood lumber dispute. Let me ask this: is there some alternative set of negotiations separate and apart from this, where if these change were not made, this government could still proceed to resolve the softwood lumber dispute?

I assert that these changes are being made to appease the Americans under the softwood lumber dispute. The government likes to say: "Oh, no, no, these changes are long due in our forest sector." The workers disagree with that; the first nations disagree with that; some community leaders disagree with that. I'm asking the government this question: with all those people disagreeing with these changes or wanting more consultation, and if this isn't being done to appease the Americans, is there some other proposal that could go forward to resolve the softwood lumber dispute separate and apart from this?

Hon. M. de Jong: I am going to take a moment to point out to the member that while I have at no point tried to dispute the fact that there are people out there who have expressed either their hesitation, anxiety or outright opposition to some of these changes, there is a whole host of people — community leaders, licensees large and small, first nations — who have provided a pretty strong endorsement for the direction in which these changes take the forest industry and forest economy in British Columbia.

Change of this magnitude is certainly going to attract a degree of anxiety. Anyone in their right mind would want to see all the details associated with how it works out and how it fits together, but I'm going to reject categorically the assertion the member has repeated — or the impression, I should say in fairness, that the member would attempt to leave — that these are changes that have been criticized in every quarter, because it's just not so.

With respect to the negotiations that are taking place, the strategy has not changed. We have two tracks taking place. One is to rely on the international trade tribunals of the WTO and NAFTA. We are expecting decisions as soon as the end of this month from the WTO. We expect those decisions, as were the decisions last year, to be favourable to our cause.

In the meantime we've said to the Americans that we are interested in negotiating an interim deal that would see us address this tariff, this combined countervail duty and anti-dumping duty that has influenced behaviour on both sides of the border and caused pain on both sides of the border.

Is there some secret negotiation taking place? No. My hope is that in short order formal talks will resume, but they will only resume if we have some reason to believe that they will lead to a fruitful conclusion. We

are focusing, informally at least, on issues relating to the replacement of the CVD and anti-dump with some type of border agreement. The parties are still some distance apart on that front.

Of course, there's the question of what happens to the significant dollars being held in trust on the American side right now. That is obviously a big issue for all of the players involved, and sadly, I can't tell the member that we are anywhere near close to resolving that issue.

J. MacPhail: That leads to several questions I have. I want to ask questions about the softwood lumber dispute and how it relates to this legislation, but I want to back up.

The minister said that he conveyed to me what the U.S. Commerce department said. He made a slight reference to Mr. Aldonas and the U.S. lumber lobby, but the industry here in British Columbia…. I've actually scanned the papers to find out what the industry reaction to it was, and let me be clear that I know what a lukewarm reaction is. I'll tell you that I didn't get any heat off any of the reaction from the industry. I know Mr. Emerson, at a provincial congress, was very excited about the changes. But other than him, who is? Can the minister tell me what the industry reaction from here in B.C. has been?

Hon. M. de Jong: I'm not going to speak for anyone, and I'm not going to discourage the member from contacting stakeholders on her own. The member apparently has consulted the press clippings that followed the announcement on, I think, March 26. I can obtain them for her and repeat what I thought was the predominant message from community leaders, licensees large and small, independent licensees, family-owned licensees, who said to me — and, my recollection is, said publicly: "This is a move in the right direction. That is not to say that we do not have concerns about what a market-based timber-pricing system is going to mean for our company and that we don't want to work with government around the issue of transition." Of course, that is what any intelligent business person would say.

Are licensees thrilled about losing 20 percent of their AAC? I suspect they are not. Yet my recollection of the response I have received from them — from woodlot owners, from proponents of community forests, from many first nations but by no means all first nations — is that it is the right thing to do. It is a movement in the right direction. Earmarking revenue-sharing dollars for first nations is the right thing to do. Identifying more fibre than any previous government has ever identified and creating a mechanism by which it can be directly awarded to first nations — something no previous government has ever done — are the right things to do.

I dare say that if you went to any single licensee, any single stakeholder, and presented them with this trilogy of legislation, there is something they would find that they don't support. In some cases they might find more than one thing, and there are a few people who would say the whole thing offends them. On balance, however, I will say to the member — and I don't expect her to acknowledge or concede the point — the response has been that the status quo wasn't an option, the move to a more market-based timber management policy is the right step to be making, and they want to work with government moving forward through the implementation stage.

J. MacPhail: What has the federal government said? Is the federal government still working with this province in terms of the softwood lumber dispute?

Hon. M. de Jong: It has been my experience that insofar as forest management policy is concerned, the federal government understands it is a matter that falls exclusively within the jurisdiction of the province. They do not, and they have not — insofar as I am concerned or insofar as my experience, limited as it is, reveals — ever tried to influence the direction the province takes with respect to management of our forest resource. They are our agents, at the end of the day, based on our constitutional division of powers when it comes to the negotiations that take place bilaterally with the Americans. To that extent, we familiarize them with the policies and the changes we are making, but we do not seek, nor do they attempt to influence those choices.

J. MacPhail: I'm a little bit surprised at that, because the government's relying on them to cough up a whole bunch of bucks, I would assume, in terms of the pension bridging for workers, for instance, in the reorganization of this sector of the economy. At least that's what I was led to believe under Bill 28 — that there's an opportunity for the federal government to come in here and help workers with their pension bridging. So I would assume that they would have not some say but some view of the direction.

Now, we also heard under the softwood lumber negotiations that it was all for one and one for all amongst the provinces — a united front. What are the other provinces saying about this proposal?

Hon. M. de Jong: I'll answer the question. We are straying rather afield from the specifics of section 2.

The province has made choices around how it intends to offer for sale a resource owned by the Crown in the right of the province of British Columbia, and that is as it should be. Other provinces will similarly make decisions around how they manage the resource that they own.

J. MacPhail: I'm sorry; I disagree with the minister that we're straying at all. This section gives fully half of

the credibility of this government's claim that they're moving to a market-based system, a competitive bid system. I assume the reason we're doing this is exactly the reason that this minister gave in December of 2001, and that is to — I would use the word "appease" — appease the Americans. He might use the words "to resolve the softwood lumber dispute."

It's directly on point. That's why I asked the minister whether there was some alternative plan to resolving the softwood lumber dispute, short of this legislation, and I didn't get any answer. It is this legislation that's going to solve the…. Well, I got answers about how the minister is proceeding on other fronts as well as this legislation.

Other provincial governments, I'm sure, would be very interested. I know Quebec is interested in these changes that this government in British Columbia is making. I know other provinces are interested about whether this government is going directly into one-on-one negotiations with the Americans in terms of solving the softwood lumber dispute.

Let me ask this: if this is the move to a more market-based stumpage system — and that's this government's language — and that just happens to match a demand that the U.S. lumber lobby has been making for years — this offer has been on the table for a year and a half at the softwood lumber table — what studies has the ministry done to prove or demonstrate that this change will actually provide the requisite volume of timber to have a real competitive bid market-based pricing system?

Hon. M. de Jong: I'm sorry. I wasn't paying attention, but I think the question is: what comfort do I have that this volume is sufficient to drive a market-based timber-pricing system? At the end of the day, I have to rely upon the advice I have received on that matter from a range of experts, both within the government and outside of government. There are different opinions on the matter.

Some would argue that done properly, you can achieve the same result credibly and accurately with 15 percent. Others say it requires 25 or 30 percent. The advice at the end of the day that we've chosen to rely upon and act upon is that which relates to 20 percent. Again, I say that whatever the volume, I hope the member isn't losing sight of the fact — and I'm certain she isn't — that the delivery model we are discussing by virtue of this bill makes other significant changes that go beyond simply the amount of fibre that is sold, but also how it is sold.

J. MacPhail: Yes, thank you, and we will get to that discussion in those sections.

Now, one of the bones of contention between the minister and me was the fact that he got to keep his salary because this was a corporate decision and that his own budget would not be affected negatively by this. All right. That's past. We've dealt with that.

But a corporate decision must have involved this. This government must have sat around that table in the west annex, and this minister must have had to demonstrate to the cabinet, in order to make a corporate decision, what the average stumpage rates will be as a result of this change. What did the minister offer, or what studies has the minister done to demonstrate what the average stumpage rate will be over, let's say, the next five years?

Hon. M. de Jong: The member, I know, will not be surprised to hear me say I'm not going to give her a blow-by-blow account of the discussion that took place within cabinet, for obvious reasons. I can help to this extent, however. We do budget now over a three-year cycle, and those revenue projections exist moving three years out.

Stumpage will, under a market-based system of the sort that is contemplated by the trilogy of legislation, track the performance of the market. There are some variables, some serious variables there, and we're seeing a good example of that over the last week as it relates to currency rates and the influence that can have on the sector.

The resolution, or not, of the softwood lumber dispute through any one of the mechanisms will impact. I should say that the projections we have included for budgetary purposes are not based upon an assumption of a settlement of the softwood lumber dispute. If, and we hope, that turns out not to be the case and we do get a settlement, that will have an impact.

I would say this as well. The member will know we have an AAC, an annual allowable cut, in the province of about 74 million now, but that includes some of the beetle uplift. We don't cut nearly that amount. Part of what one is trying to achieve here is to increase the utilization of the provincial AAC, and that will have a positive impact on revenue. Those are the variables. The best I can do in terms of specifics is point the member to the revenue projections that flow three years out and which are not based on a settlement of the softwood lumber dispute.

J. MacPhail: Yes, I understand that there are variables that affect market share. For instance, the currency rate affects market share; it doesn't affect stumpage.

What I'm trying to get here is, from the minister's own studies, whether his studies confirm that point of view held by people who say the big lumber producers, the multinational corporations, are going to come in and undercut smaller bidders and therefore set the stumpage rate at a lower rate through underbidding but volume-bidding the smaller guys. There's the other point of view that the minister himself articulated, which is that stumpage rates will go up by competitive bidding.

Is there no study that the government has done that says stumpage rate, in and of itself, will be affected by the competitive bid system? I do recall that you can isolate variables.

Hon. M. de Jong: I think there is an obvious interest and relevance. What I don't have with me, I'm afraid, for the member is neither some data that I could provide beyond the general reference that I've made nor the officials that could provide reliable information to the member, and I apologize for that. But I don't want to leave an incorrect impression about what those numbers might be.

J. MacPhail: I'm sure we'll have time to get those. The debate's not going to end tonight.

Now, my understanding is that waterbedding will be a thing of the past because of this new timber sales agreement. Just for the benefit of those watching us, waterbedding is kind of a pejorative term for a built-in concept that started under the Social Credit government, I think in the 1950s — maybe the 1960s, but I think it's as far back as the 1950s — that there will be a rate gathered through stumpage. A certain amount will be set to be gathered through stumpage. If stumpage goes up in one area of the province on the coast, for instance, then stumpage can be lowered in another area of the province — for instance, in the interior — because there's only going to be a set amount collected by the administration.

Now, when I say "a set amount," I mean that the administration will always allow for more revenue based on increase in market share, etc. That's the concept. I guess it would actually have to be a concept of the sixties, because waterbeds weren't around before that — were they? Maybe it's a modern name for an older concept. But I assume that waterbedding is now a thing of the past, so the minister could perhaps confirm that for me. I'm wondering what the impact will be of the combination of the elimination of waterbedding and the auction-based stumpage system. I'm particularly interested in those two factors affecting interior producers. Give me the view on interior producers and then coastal producers — separately.

Hon. M. de Jong: By the way, my understanding is that the waterbed concept was something that emerged in the latter part of the 1980s, so it is not quite as ancient as the member might think.

I'll answer the question but do so on this basis. Nothing in this bill eliminates the waterbed — not this section or this bill. Now, I have repeatedly stated and confirm today that it is a feature of stumpage calculation that will be no more, but it is not this bill that represents the mechanism for doing that.

I think the answer I would give, though, to the member's question — and I'll go quickly, given what I've just said — is that the Crown becomes…. As we have asked the industry to expose itself more fully to the market, so does the Crown. It was, at the end of the day, a means by which the Crown protected itself from the market by ensuring that a target rate was set and that revenue was collected by hook or by crook either from that part of the province or that part of the province. In terms of the effect of eliminating that feature of stumpage, it does create, I suppose, a fiscal vulnerability to the Crown.

J. MacPhail: There is a potential for vulnerability in terms of revenue collection and the effect that has on the budget. That's why I'm interested to know what estimates this minister has for that effect on budgets three years out. If I hear one more Liberal MLA stand up and say: "It's this industry that pays taxes so we have health and education…." I want some proof of that. I want some proof that these changes are not going to interfere with revenue collection to pay for health and education, for instance.

I assume there's going to be some demand by this government to have the Crown benefit through use of a publicly owned resource. I mean, this is still a publicly owned resource until further notice. The government has not yet given further notice that it's privatizing the industry, although many would suggest it is the direction they're heading in. But this government has said: "No, no, no. It's still a publicly owned resource." So I would assume there's some calculation somewhere showing the effect on revenue.

I would just suggest that it cannot be discerned by looking at the fiscal plan of the Minister of Finance. It cannot be discerned what effect this new market-based system will have on revenues. I asked the Minister of Finance those questions during his estimates, and he himself could not tell me.

The waterbedding — it will be eliminated. The minister is right: there's nothing in the legislation that says waterbedding is outlawed. But theoretically it is supposed to be an outcome of a move to this system.

Has the industry spoken with one voice on this matter? Or do coastal producers have a different point of view than interior producers on the elimination of the waterbedding effect?

Hon. M. de Jong: I can only candidly relate to the member my experience in terms of the contact I've had with a myriad of participants in this industry. I have yet to meet anyone who has vigorously defended — or defended at all — the waterbed. Virtually anyone I can think of disliked the waterbed. Some disliked it more, but I have yet to find someone to stand up before me and vigorously defend the maintenance of the waterbed. That was something I think the previous government heard during their term in office and we heard while we were in opposition. It gave rise to, again, a pretty specific pledge in the electoral document, the New Era document, to eliminate the waterbed.

Now, the impact of doing that, as the member might expect, is…. What flows from that, what emerges from that…. She's asked some questions around that. People who have the responsibility for

paying stumpage are working with us to ensure that we have, through the transition, a good understanding of what that means. I have to say to the member candidly that I can't think of someone who has come to me and said: "Oh, and of all the things you're doing, what you have to do is maintain the waterbed." I just haven't heard that from anyone.

J. MacPhail: How was the volume of timber to be available under the timber sales agreement process determined? What did the ministry go through to set it at the 20 percent level?

Hon. M. de Jong: I think the first part to the answer…. Forgive me for repeating myself. It was based on an analysis of what volume of timber in your entire AAC, what percentage of that volume, must flow through the structure or the model so that you can obtain reliable data to drive your overall stumpage system. It's probably inaccurate to suggest that one would take that in isolation, because the other feature to this package relates to what happens on the other side of the equation — that is, how much of our logs are flowing at arm's length. Right now we have about 75 percent of the AAC controlled in long-term replaceable volumes. That minimizes market activity. Licensees can rely upon the fibre from their own replaceable licensed sources.

As that number comes down and the amount of our timber locked up in long-term replaceable volumes moves closer to 50 percent, you also see a lot more short-term market activity in the buying and selling of logs. Now, the question is: is there a means by which you can incorporate that data into your overall timber-pricing system? I'm not ruling that out. I think there's an argument for doing that. Admittedly, we're not there yet. The model that is being proposed as part of this package relies, at this stage, on the data derived from the 20 percent. The most honest answer I can offer to the member is that is a figure — it might be a minimum figure — that I am advised one needs to have to achieve sufficient data, and it's got to be representative of a whole bunch of things. It's got to be representative of the timber profile. It's got to be representative of different circumstances — topography, geography and all of those things. It's not just a matter, as I'm sure the member appreciates, of taking 20 percent of the timber in a particular area. It does have to be a representative sampling.

J. MacPhail: The minister made reference to the AAC, the annual allowable cut. He may have thought he answered this question that I'm about to ask, and perhaps he has. He may need to just clarify it a little bit more for me.

Over the years the office of the chief forester has developed a complicated but scientifically based system to determine the allowable annual cut. The minister made reference earlier about the cut being around 74 million cubic metres. For the last several years the annual allowable cut has not been met. It is a system that I would say, or I have been convinced, enjoyed considerable success in determining the trade-off between what needs to be maintained for the ecological integrity of the forests as well as the need to have a continuous source of fibre for industry.

It also set the reforestation requirements. There was a host of other social and economic factors too, not the least of which, as I understand it, was to provide a reasonably accurate forecast of stumpage revenue to the provincial treasury. In other words, it was through the setting of the AAC that governments would receive predictions of the stumpage.

What changes with the move to the timber sales agreement? How does that affect the work of the forester in making predictions about what will be anticipated stumpage revenues under this new system?

Hon. M. de Jong: The chief forester — and I don't think I'm going to contradict what the member has said — is essentially the scientific officer who says: "This is how much timber can be harvested from Crown land in British Columbia on a sustainable basis." That has been the case; that will continue to be the case.

I am told and advised that what has happened in the past is that while the chief forester makes that determination about what could be harvested, it is the other officials within the Forest Service that predict how much will be harvested, and then the calculation flows from that. I'm given to understand, and it makes sense to me, that that won't change under the system being proposed here. The chief forester will continue to set the amount that is available for harvest, and the Forest Service will continue to make predictions around how much of that AAC will actually be harvested.

J. MacPhail: Does the minister think that anything will change with the ability of the chief forester to predict stumpage revenue as a result of this changed system?

Hon. M. de Jong: Yes. I am told — and this is consistent with my understanding and impression — that the chief forester doesn't have anything to do with the prediction of stumpage revenues.

J. MacPhail: Okay, so the minister is saying that others in the bureaucracy do that.

All right, let's look at the "timber sales manager" definition in this act. The timber sales manager "means (a) the deputy minister of the Ministry of Forests, or (b) a timber sales manager appointed under the Ministry of Forests Act for a B.C. timber sales business area." This assumes that the deputy minister will be the timber sales manager for the province. Or is it more likely to be a delegated authority that the deputy minister will have and the authority will be delegated to another person in the Forest Service, and if so, whom?

Hon. M. de Jong: Here's what's intended to occur. We are in the process, and I think we have recruited 12

individuals to serve as timber sales managers. At an operating functional level, they will function within the timber sale program in the same manner that a district manager functions within the forest districts located around the province.

J. MacPhail: So there are 12 forest districts, and therefore there are 12 timber sales managers. Is that it? Or is it by a TFL or a TSA? What's their jurisdiction?

Hon. M. de Jong: We're just trying to get the other section, section 34 of the bill. The business districts that fall under the jurisdiction of the timber sales manager are not the same as forest districts. There are more forest districts than 12. In section 34 of this bill, that is the authority for the creation of the business districts for the timber sales program managers.

Hon. M. de Jong: They, in effect, become responsible for every facet of offering Crown timber through the timber sale program — setting the sales, the size, the term, finalizing the offerings for bid.

There's another feature to this that we haven't talked about yet but I think is worth emphasizing. They do operate separate and apart from the main Forest Service. There is a concerted attempt here to have the program operate more independently from the Forest Service than the previous small business program. In fact — and I'll check to ensure that I'm not miscommunicating — in most cases they occupy separate quarters.

I'm sorry. I'm glad I checked. In fact, where we could co-locate to effect savings, that's the case, but they do operate very separately, and the timber sale manager is ultimately responsible within that business area for every facet of the offering of timber through the program.

J. MacPhail: There'll be a timber sales manager, and then there'll also be the regional manager. How do they report to each other? Are there separate rankings? Who's in charge?

Hon. M. de Jong: I'm going to answer the question based on this understanding of the question. I thought that what the member was asking about was the relationship that exists between a timber sale program manager and either a district manager or a regional manager within the Forest Service.

There is no direct reporting — and the member's nodding her head — so the answer to that question is that there is no reporting relationship between those individuals. The timber sale manager has a set of responsibilities specific to this legislation and the timber sale program and does not report to either the district manager or the regional manager.

J. MacPhail: The minister says that he's recruiting 12 people. Have they been recruited, and if so, are they from within the Forest Service, outside the Forest Service or outside the public service? Where are they coming from?

Hon. M. de Jong: They have all been recruited, I am advised, from within the Forest Service — about half from the former small business forest enterprise program.

J. MacPhail: What are the qualifications? Are they different than what the people would be doing in the small business enterprise program?

Hon. M. de Jong: While it is fair to say that the basis upon which the timber is being offered for sale changes by virtue of this legislation, I think it is equally fair to say that the skill set one requires from senior management personnel of the sort that have been recruited here is largely the same. That may not answer the specifics of the question, but it is a similar function, albeit a different statutory regime or set of guidelines, that governs how the timber is being offered for sale.

J. MacPhail: How does the 20 percent get divided up amongst the 12? Do they meet and set sales targets? Are there revenue targets? How will this work?

Hon. M. de Jong: A fair question, and this does tie in directly with the discussion and negotiation that's taking place now with licensees as a result of the passage of Bill 28 and the tenure takeback. What we are looking for is a representative profile of timber to place within the program for sale to prospective licensees, so at this point it's not so much a function of the 12 timber sale program managers sitting down and divvying things up, because as yet we haven't got what needs to be divvied up. That's ongoing now.

J. MacPhail: We had discussions about the annual allowable cut. Does the timber sales management group have any effect on the chief forester in determining the AAC?

J. MacPhail: So the chief forester will determine the AAC, and then everybody else decides how the pie is divided up between the timber sales agreements and regular TFLs?

Hon. M. de Jong: That process has not changed, and I think the member actually described this fairly accurately. The chief forester will set the AAC, and we have been talking about situations in which the AAC increases. In other situations, the AAC can decrease. The Forest Act provides for the Forests minister, then, to apportion that increase or decrease to the various licensees.

The other definition in here is the small business forest enterprise account under this section. As I understand it, this is a special account held in the consolidated revenue fund now, so the small business forest enterprise account is going to be replaced by the B.C. timber sales account. It's in the definitions section, but section 21 of the legislation will spell out the nature and uses of that account. Actually, the B.C. timber sales account is not defined in this section of the bill. It is referred to under section 21. Am I accurate in saying that the B.C. timber sales account replaces the small business forest enterprise account?

J. MacPhail: And how much is currently held in the small business forest enterprise account? What was reporting out at the conclusion of '02-03?

Hon. M. de Jong: I don't have the figure for the member, though it is easily retrievable by us. I will say this, however. Under this regime that question will have an even greater relevance, because it should be far more transparent what the net returns were from the program, by virtue of how it is operated at arm's length from the ministry.

What were the expenses, and what were the revenues? At the end of the fiscal year, under this program, we'll be able to say: "Well, how much did the program earn?" I can get the number the member referred to as it relates to the small business forest enterprise program account for the conclusion of the fiscal year.

J. MacPhail: Yes, thanks. We'll discuss the operation of this timber sales account under section 21.

My last question in this area is: is the full amount transferred from the small business forest enterprise account to the B.C. timber sales account?

Hon. M. de Jong: I am told — and by quickly re-reading section 21 — that it is, in effect, a name change. Whatever funds were in or are in the small business forest enterprise account flow through and will be in the timber sale account.

J. MacPhail: My next questions are on the area of special forest products. I've got quite a few questions, so perhaps this would be a suitable place, noting the hour….

J. MacPhail: I move that the committee rise, report progress and ask leave to sit again.

Committee of the Whole (Section B), having reported progress, was granted leave to sit again.

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