Hansard -- Thursday, April 1, 2004 a.m. -- Vol. 23, No. 4 (HTML)


CONTENTS

	Routine Proceedings
		Page

Introductions by Members		10035

Recommittal of Bills		10035
	Budget Measures Implementation Act, 2004 (Bill 5)
	Hon. G. Collins

Committee of the Whole House		10035
	Budget Measures Implementation Act, 2004 (Bill 5) (continued)
	Hon. G. Collins

Reporting of Bills		10035
	Budget Measures Implementation Act, 2004 (Bill 5)

Third Reading of Bills		10035
	Budget Measures Implementation Act, 2004 (Bill 5)

Committee of the Whole House		10036
	Taxation Statutes Amendment Act, 2004 (Bill 6)
	Hon. G. Collins

Reporting of Bills		10036
	Taxation Statutes Amendment Act, 2004 (Bill 6)

Third Reading of Bills		10036
	Taxation Statutes Amendment Act, 2004 (Bill 6)

Committee of Supply		10036
	Estimates: Ministry of Human Resources
	Hon. S. Hagen
	J. MacPhail
	L. Mayencourt

Proceedings in the Douglas Fir Room

Committee of Supply		10049
	Estimates: Ministry of Education (continued)
	J. Kwan
	Hon. T. Christensen

Clerk of the House: Pursuant to standing orders, the House is advised of the unavoidable absence of Mr. Speaker and, further, that my grandson, Simon George Witt, is having a birthday today.

J. Bray: On behalf of my colleague the MLA for Oak Bay–Gordon Head and Minister of State for Women's and Seniors' Services, I am pleased to introduce to the House a group of grade 11 students from the great school of Oak Bay High. They're here today to have a tour of the Legislature, and I know that the sister of one of our legislative assistants has a very famous picture of me with her now, which she will probably display in the school. I would ask that the House please make all these students and their teacher, Ms. Pat Mathias, very welcome to the Legislature.

Hon. G. Collins: In Committee A, I call Committee of Supply. For the information of members, we'll be debating the estimates of the Ministry of Education. In this chamber, Mr. Speaker, I have a motion to move, which I can do, if you'd like.

Hon. G. Collins: By leave, I move that the proceedings in regard to the third reading of Bill 5, intituled Budget Measures Implementation Act, 2004, be declared null and void and that the bill be recommitted forthwith with respect to sections 25 and 28.

The House in Committee of the Whole (Section B) on Bill 5; H. Long in the chair.

Hon. G. Collins: I move the amendment to section 25. standing on the order paper in my name.

If you look at the bill as presented previously, in section 25 there is a sub (a), sub (b), sub (c) and sub (d). There are two subs (e) and two subs (f), which obviously leads to confusion. This section has just been renumbered to ensure that there's only one letter of each alphabet in the subsections, and it goes from subsection (a) to subsection (h). That is the only change in this section.

Hon. G. Collins: I move the committee rise and report the bill complete with amendment.

Bill 5, Budget Measures Implementation Act, 2004, reported complete with amendment.

The House in Committee of the Whole (Section B) on Bill 6; H. Long in the chair.

Hon. G. Collins: On section 31, I move the amendment standing in my name on the orders of the day.

Hon. G. Collins: I move the amendment standing in my name on the orders of the day to section 33.

Hon. G. Collins: I move the amendment to section 35 standing in my name on the orders of the day.

Hon. G. Collins: I move the committee rise and report the bill complete with amendments.

Bill 6, Taxation Statutes Amendment Act, 2004, reported complete with amendments.

Hon. G. Collins: I call Committee of Supply. For the information of members, we'll be debating estimates of the Ministry of Human Resources.

Hon. S. Hagen: Good morning. Before I begin, I'd like to take a moment to introduce my staff who are with me: Robin Ciceri, to my left, deputy minister; Andrew Wharton, behind her, assistant deputy minister of the policy and research division; and to my right, Randy McDonald, executive director of the corporate transition office and the financial and administrative services branch. These three, together with the others in the ministry, are invaluable members of my team, and I'd like to thank them and all the staff throughout the Ministry of Human Resources.

It is because of ministry staff's expertise and professionalism at ministry headquarters, in my office and in communities across this province that our clients are supported in achieving better futures for themselves and for their families. The Ministry of Human Resources is committed to providing assistance to those most in need and supporting people who are able to work to find and keep jobs.

Nowhere was this more of a priority than for low-income British Columbians most in need, so we got to work. In April of 2002 we enacted new legislation, the Employment and Assistance Act, to refocus the income

assistance program on long-term employment and self-sufficiency for those who are able to work. As part of this comprehensive legislation, ministry staff work with clients to establish an employment plan to help them plan for and find a job.

The employment plan is not just another piece of paper. It is the key tool that enables clients to identify programs and services that they need to succeed in getting a job as quickly as possible. Another important tool that we introduced was the two-year time limit, a powerful motivator in keeping clients who are able to work focused on employment.

Before we begin a detailed discussion of the ministry's estimates, I'd like to talk about our most significant accomplishments and how they are improving the lives of British Columbians in need of assistance. Looking back over the past three years, we have led a fundamental shift in the culture surrounding income assistance from one of entitlement to one with a renewed sense of personal responsibility. In the 1990s a growing caseload was creating a cycle of poverty and dependence for one out of every ten British Columbians, six out of ten single mothers in the province and one out of every seven British Columbia children. Equally alarming was the fact that this ineffective system was costing taxpayers $2 billion a year. What a waste of human potential and taxpayers' money. In 2001 this government knew that it had to do better. We believed that all British Columbians deserve to share in the new era of opportunity and prosperity.

The time limit policy is the first of its kind in Canada and includes 25 exemption criteria to ensure that no one who is unable to work, who is actively looking for work, will lose assistance. We believe the time limit policy is fair to taxpayers and fair to British Columbians who are unable to work and need support the most.

Our experience is that when clients make finding work a priority, they generally succeed. If clients are unsuccessful on their own, ministry staff work with them to identify any barriers they may have and to ensure access to appropriate ministry programs.

To address the new legislation's focus on sustainable employment, we invested $300 million in employment programs to provide our clients with the skills, the supports and the jobs they need to break the cycle of welfare dependency. In collaboration with our four job placement providers — Job Wave, Destinations, Kopar and ASPECT — we have been able to place almost 30,000 of our clients in jobs so far. These are good jobs such as painters, security guards, dishwashers, landscapers, retail clerks and administrative assistants — jobs that pay two to three times what an individual would receive on income assistance. Our job placement providers have almost 10,000 job vacancies ready to help more of our clients achieve independence and a better life for themselves and their families.

Coming in as the new Minister of Human Resources, I could immediately see how this ministry truly is the ministry of jobs. The expected-to-work caseload — people who are able to work — has dropped by almost 70 percent since this government took office.

Today there are 85,000 British Columbians who no longer rely on income assistance. That includes 37,000 British Columbia children and families — families who now have more opportunities to achieve their potential. It makes me proud that the great success government is having with our new approach to income assistance translates so directly into personal success for thousands of our clients.

At the same time as we started to make the changes to create the new B.C. employment and assistance program, we also introduced separate legislation to address the unique needs of British Columbians with disabilities. The Employment and Assistance for Persons with Disabilities Act marked the first time government recognized mental illness as a disability in legislation. In fact, as further proof of this government's commitment to addressing mental illness, I'm proud to say that British Columbia has the only minister solely responsible for mental health and addiction services in the entire Commonwealth.

Yes, people with disabilities are a top priority in this government and in my ministry. We are committed to providing them with sustainable assistance and support programs. In April 2002 we introduced a new employment strategy for persons with disabilities to support people with disabilities who are able to work and want to work at achieving greater independence. New initiatives as part of the strategy included doubling the earnings exemption for people with disabilities from $200 to $400 per month, establishing a $20 million Disability Supports for Employment Fund to enable more active participation in the workplace, implementing a full suite of employment programs and services for people with disabilities to assist them in reaching their goals and maximizing their independence and creating the Minister's Council on Employment for Persons with Disabilities to find ways to make British Columbia workplaces more accessible to people with disabilities.

Of course, we recognize that not all people with disabilities are able to work. That's why persons with disabilities receive the highest rate of income assistance in the province and the fourth-highest rate in Canada.

When you look at our caseload today in comparison to when we started, there are now nearly 90,000 fewer British Columbians dependent on income assistance because they are benefiting from government's emphasis on employment. At the same time, the number of people on the caseload with disabilities and multiple barriers who are receiving higher rates of assistance and support is increasing.

Now, I'm very aware that this ministry's successes are about people, not numbers. I'd like to share one of those stories with you today.

One of our clients, a first nations woman who has struggled for years with alcoholism, has lived on welfare so long that she had stopped ever dreaming of getting ahead. Her life changed when her employment

and assistance worker introduced her to Job Wave, one of our ministry's four job placement providers. For the first time in a long, long time, she was finally able to take control of her future. Job Wave helped her improve her computer skills and provided the new work clothes and transportation she needed to get to job interviews. For a little bit of help, her old life is just a glimpse in the rearview mirror. She now holds a full-time position working for this government to support herself and her son. She says she loves her job and looks forward to an even better future. This is one of the thousands of wonderful stories that confirms once again how our clients are bringing out their best through employment.

Before we address the ministry's estimates for the coming year, I'd like to take a few minutes to talk about another service of the ministry where we have great success — a service that we often do not focus on until we really need it. The need was never greater than this past summer during the most devastating forest fire season on record. I'm speaking of this government's emergency social services, a program led by a dedicated team of ministry staff who are professionals responsible for overseeing thousands of volunteers and providing front-line assistance to communities in need during emergency and disaster response.

I'm proud to say that we have over 5,000 trained ESS volunteers in 150 communities across the province who are ready to deliver essential services such as food, shelter, clothing and emotional support during an emergency. On average, ESS is involved in about 250 responses each year, which affect about 2,400 British Columbians. For comparison, during Firestorm 2003 nearly 6,000 dedicated emergency social services volunteers assisted over 37,000 evacuees at 17 reception centres and five group lodging facilities in the province.

Firestorm 2003 was the largest incident involving an ESS response in British Columbia's history. ESS volunteers responded from the communities as far north as Fort Nelson and Terrace, as far east as Kimberley and Castlegar, and as far west as Victoria and Courtenay to support local volunteers in the areas affected by the fires. These volunteers come from all walks of life, including information technologists, teachers, bus drivers and counsellors, to name a few. They were at the heart of the provincewide response to direct over $7 million in provincial aid to ensure that no person evacuated from their home went without food, shelter and a helping hand.

I know that all British Columbians appreciate the work that our ESS volunteers do. Certainly, those people affected by the fires this past summer do. As one evacuee in Kelowna said: "The reason the system worked so well was the volunteers. Hour after hour, day after day the volunteers worked, and they did not stop until all were safe." I know that all British Columbians will join me in once again thanking the ESS staff and volunteers for a job well done in a very challenging year. The ministry's achievements to date are a direct result of the kind of dedication and service that staff bring to all areas of the ministry, which creates the foundation for so much of the work that they do.

In the coming year, the Premier has asked us to continue addressing a number of priorities in the Ministry of Human Resources that honour the commitments this government has made to British Columbians. One of these commitments is to ensure that British Columbians have a fair, sustainable and affordable income assistance system. We are able to provide an effective system for continuing to streamline regional service delivery. By streamlining our regional systems delivery, we are providing levels of service that are more efficient for income assistance recipients and cost-effective for taxpayers.

We have almost 2,000 FTEs and over 100 offices across the province, and we are using new technology to ensure that resources are reaching those who need them the most, even in remote locations. In the past year we also completed a regional realignment to match our boundaries with those of the Ministry of Children and Family Development and the Ministry of Health Services. As a result, our ministry now shares common work assignment areas and is better positioned to explore innovative service delivery options in the future.

The Premier has also called for the ministry to respond to the changing profile of income assistance clients through employment planning and programming that support their move to sustainable development. The reality is that our caseload is changing. Those who remain on the caseload require more funding and supports from government. This coming year we will be spending more of our employment program budget on programs and services for multibarriered clients, focusing on life skills and pre-employment services. We will also be moving towards a more refined approach to our employment programs in the future, ensuring through open tendering that we meet clients' specific needs in a cost-effective way.

Finally, the Premier has asked us to continue to assist people with disabilities in maximizing their independence through not only income assistance but also employment and volunteer programs. Providing for people with disabilities is one of my ministry's top priorities. Here in British Columbia we are a leader in developing programs that advance these opportunities, and we will be increasing our spending on services for those most in need of our help.

I firmly believe that providing opportunities for people with disabilities is a win-win situation. It not only benefits the individual but also strengthens communities and moves British Columbia towards a more prosperous future. It is because we are looking to the future that the Ministry of Human Resources is committed to providing assistance to those most in need and supporting people who are able to work to find and keep jobs. In doing this and never wavering in that commitment, we are contributing to bringing out the best in what British Columbia has to offer to its citi-

zens, and the best is what all British Columbians have to offer this great province.

J. MacPhail: I must admit I was a bit taken aback that the government decided to schedule these estimates today on April 1, the day there are massive cuts being made to human resources — although I do see the public affairs bureau at work. I note on their fact sheet, which the minister actually reiterated as well, about the circumstances before this government came into office. Of course, it is completely misleading. It has to go back almost a full decade to describe the human resources system, and of course, much change took place in between what the minister just outlined as what the circumstances were mentioning — that six in ten single moms were on welfare, one out of every seven children, the caseload of 220,000. That is back almost a decade, and much change has taken place in between. I do understand why this government has to present itself in such an unfair way to what has already occurred in the system, because they have a very indefensible record that this minister now has to defend.

Mr. Chair, my first assignment when I was asked to sit in cabinet by then Premier Mike Harcourt was for the Ministry of Social Services, which included actually what this government now has as two ministries — the Ministry of Human Resources and the Ministry of Children and Family Development. While I have not had that responsibility since 1996, it is interesting to see just how far this government will go in attacking poor people and how far they'll go in their public affairs bureau spin to try to avoid what they have done.

Anyway, here we are on April 1, the day that a new stage of cuts kicks in. I hope we can actually have a debate that's about the facts. I fully expect the minister will want to give anecdotal evidence. That's fair enough, because there is lots of anecdotal evidence out there. We also have the facts before us — the facts as they exist in the service plan of this ministry, the facts as they exist in the material assumptions of the fiscal plan and the facts as presented from the financial assistance workers.

It was very interesting to listen to the minister this morning on CBC radio right after a one-day-retired financial assistance worker had put on record what exactly the circumstances were on the front lines, but we'll get into that in a minute.

From the general services plan, the Ministry of Human Resources is targeted for some of the deepest cuts in this B.C. Liberal government budget, if not the deepest cut. Here are the cuts for the Human Resources budget from just '03-04 to '04-05. There is a $117 million cut from last year to this year's budget. Employment programs have been cut by $38.633 million from last year to this year. The temporary assistance budget has been cut by $79.4 million. Yes, the disability assistance is up $42.4 million, and we'll talk about that, Mr. Chair. I was surprised to see even tribunal funds are up. That's an interesting point. I notice that capital expenditures for executive and support services are up as well.

Let's start with employment programs, because as I was listening carefully to the minister's remarks, he says that his is the ministry of jobs. This minister of jobs has cut employment programs by $39 million just from last year. I don't often do this, but I'm going to quote the Fraser Institute. I know that this government feels extremely comfortable with the Fraser Institute.

I was surprised in my research to come across this quote. It is from November 17, 2003, from Jason Clemens of the Fraser Institute. However, I bet his quote is even more salient today because the government has cut job assistance even further. Here's what he had to say, from the Fraser Institute: "In British Columbia we've done a good job on the stick side of incentive generally. We've done a rather poor job on the carrot side." He is talking about social assistance, Mr. Chair. He goes on to say: "If you don't get the two together, you're not really implementing comprehensive and cohesive welfare reform. Again, that is not the general experience in the U.S."

Also, let me just say that temporary assistance is still supposed to go down by a whopping $79.4 million. Given the fact that this government has added a twenty-fifth exemption — the exemption that one must be looking for work in order to still qualify for temporary assistance, and it appears that they've done a complete retreat on the original two-year policy — I will be asking questions about how the government intends to achieve these savings. The fiscal plan of the government certainly doesn't in any way encourage that kind of forecast under human resources — the material assumptions. It doesn't at all.

Then, of course, there is a concern that financial assistance workers are being forced to "do the government's dirty work" by making it extremely difficult to satisfy demands of this exemption, and the government has brought in many sanctions and punitive new policies and will be examining that through changes to the policy manual. I thought the comments of the retired financial assistance worker this morning on the radio certainly exemplified this Liberal government's requirement for financial assistance workers at the front line to bear the brunt of the government's dirty work.

Another concern is that the regulations for the two-year rule — as modified by news release two months ago now — have yet to be passed by cabinet. Some fear that if it remains at the level of policy, it can be manipulated by the government to achieve the government's forced savings. There is also concern about what happens to a person who gets a job and loses the job, as unemployment increases in this province, and then wants or needs to go back on social assistance — how much more difficult the new system makes that.

I'll be asking what the reason is that the Liberal government is keeping the much-cursed two-year welfare rule, even though they have introduced 25 exemptions. Consider someone who as of today, April 1, 2004, has been on welfare for two or more years and then was able to find a job. If the person lost the job the fol-

lowing week and reapplied for welfare, I am told that they would be told that they're not eligible again until April 2007. That's a result of section 13 of the act and section 27(3) through section 29 of the attached regulations.

Apparently, a ministry spokesperson contends that such a person would be allowed to reapply as long as they had not voluntarily quit their job, but I have yet to be able to find any support for a ministry spokesperson alleging that. Those who fully understand the ramifications of the two-year rule would have to think twice before getting off welfare unless they have secure and continuing employment, which of course we know in this province is just simply not available as unemployment rises. However, those who do take the risk and then fall on bad luck could end up in crime on the street to survive. That is the alternative given this government's regulations around who can reapply for welfare, as I understand it.

The exemptions introduced to prevent a crisis today, April 1, merely mean that the day of reckoning has been postponed until reapplications occur. Eventually the two-year rule may be overturned through a legal challenge. In the meantime, what will happen to those who are told that they can no longer get help and for whom there are no jobs and no job training programs?

A ministry spokesperson did confirm that the regulations for the two-year rule, as modified by news release, have yet to be passed by cabinet. I suggest that it's not too late for the government to do the right thing and simply repeal the rule. I will be talking about that.

I know the minister is going to take great pride in the fact that disability assistance is up by $48.4 million this year. Of course, it just does go to the point that $5 million of taxpayer money was completely wasted on a disability review. It is shameful that the government flushed $5 million of scarce taxpayer resources down the tube and put people with disabilities through incredible anxiety. That's not me fearmongering. That's what the auditor general said when they reviewed that whole disability review fiasco.

Of course, the review was based on ideological and untested assumptions, as attested to by the auditor general. The government, of course, thought that their punitive review would lead to pushing thousands of people off disability assistance, by their own records, confirmed by the auditor general — none of which, of course, came true, because there was simply no basis for that assumption.

We will be having an interesting discussion on all of these matters, the matters that the minister raises and the matters that I have just summarized. Because today, April 1, 2004, is a day for change in the social assistance regime — the B.C. Liberal government is imposing changes on the system — I will start exploring that area.

Today is the day that the two-year time limit was supposed to take effect. In fact, because the minister hasn't abandoned their premise of allowing people 24 months of income assistance in any 60-month period, I assume that it is in effect. Up until late last year, municipalities, churches and social groups were scrambling to prepare for the outfall of this radical policy — a policy that no other Canadian government has pursued and, as the Fraser Institute says, that this government has pursued with a stick only and no carrot.

As the pressures mounted, the government came up with more and more exemptions to let themselves off the hook of this radical two-year rule. Let's start with the minister explaining when the first exemption was made to the two-year time limit.

Hon. S. Hagen: First of all, I want to thank the member for her response. Let me say this for the record. If in fact the member, when she was the minister in this ministry, did accomplish what she said she accomplished as far as positive things, I'm perfectly willing to give her credit for those things that she did accomplish. I've been around long enough to know that no government is perfect and that over a period of time we all make contributions to the benefit of British Columbians.

In direct answer to your question, the first exemptions were brought in, in September of 2002.

J. MacPhail: What is the motivation behind this government's two-year-and-out social assistance rule?

Hon. S. Hagen: First of all, the time limits, as we call it, are guided by three factors: reasonableness, fairness and common sense. Time limits were introduced as part of the government's new emphasis on employment and personal responsibility. This is a very key part of this. I think most British Columbians would agree that the best social program is a job, by any stretch of the imagination.

I would like to reiterate that the only reason that people will be removed from income assistance starting this month…. By the way, I want to clarify what the member opposite said. Actually, the April cheques were sent out March 24, so the April cheques have been sent out to everyone who is on the roll. The people who will be removed from income assistance will be removed because they are refusing to work even though they're capable of working, they are refusing to actively look for work or they are refusing to participate in an employment plan.

J. MacPhail: In answer to my question, "When was the first exemption made to the two-year time limit?" the minister said: "In 2002." Can he quote where and what was the exemption? I'm going to go through a series of fact sheets that I've been able to glean from the government about how their exemptions have expanded to the two-year time limit, and I don't have anything as far back as the year 2002.

Hon. S. Hagen: I'll read into the record the exemptions that were in place in September of '02:

J. MacPhail: That's the list as of December 12, 2003. It wasn't the list according to their own records as of May 2003. I have the brochure from the ministry. "May 2003. Time limits. Once the time limit is reached, B.C. employment and assistance…."

Here are the exceptions as of May 2003. I'll read it. It's about how time limits work. Then it says: "Exceptions: time limits will apply to clients expected to look for and accept work. Time limits will not apply to a client who is (a) persons with a disability; persons 65 years or older; dependent child; child in the home of a relative; single parent with a child under three years old or caring for a disabled child; person temporarily excused from seeking work; refugee claimant who has not yet been granted permission to take up permanent residence in Canada — i.e., landed status."

That was expanded. Oh yes. That was expanded as the heat turned up. The list that the minister just read into the record is the list that was posted December 12, 2003. Perhaps the minister could tell us what happened between May 2003, which was the public document, and the fact sheet that expanded to 24 exemptions on December 12.

I might note that in October 2003— the ministry's own information again — the ministry's own time limit information had the seven exceptions only: May 2003, seven exceptions; October 2003, seven exceptions; and December 12, 2003, 24 exceptions.

Hon. S. Hagen: The member opposite was quoting from a brochure. I was quoting from the regulations. The exemptions were clearly stated in the regulations. They were posted on the website of the ministry. We did start out with 17 exemptions. We now have 25 exemptions. Those were added between the dates that the member opposite was talking about until this spring.

That's actually how good public policy evolves. You look at how the public policy is working, and then you make adjustments as you go along. We think that we have actually developed a very solid public policy around this issue.

J. MacPhail: Yeah. Public policy evolves when the public reacts with outrage to the original public policy. I'm just trying to get a sense of how this government did evolve and how much further they're going to evolve.

I need help here. Where on the website, as of October 2003, was there a list of anything other than seven exceptions? I'll read it into the record from the ministry's website, October 2003: "B.C. employment and assistance time limits." There are seven exemptions listed.

We couldn't find any other website analysis of anything more than seven exceptions. The first time that there were 24 exceptions to the time limit listed was on a bulletin dated December 12, 2003. Perhaps the minister could provide me with the website between May 2003 and October 2003, which people missed, that contradicted their own website elsewhere. Could I have that information?

Hon. S. Hagen: In answer to the member opposite's question, certainly we'll make that available. It was on the website. It was in the regulations. Those were all stated in the policy manual. I'd like to point out that one of the categories that she read out from the brochure was "persons temporarily excused." That summarizes a number of exemptions.

J. MacPhail: Is the minister saying that he is going to provide me with a B.C. employment and assistance website posting, post– or pre–October 7, that contradicts his own website information? That's where people go. Is that what the minister is going to provide me with?

Hon. S. Hagen: I'm advised that we can provide the member opposite with that, and it does not contradict what I read out.

J. MacPhail: That should be available now, please. I'll be happy to see how the minister's own website of October 2003 was wrong, because that's where people go. So let's have the changes.

In fact, I'll tell you what. We can resolve this whole problem by looking at the B.C. employment and assistance website of the ministry. For every time they made a change to the exemptions, could I please have a copy with the date of the change on the website?

J. MacPhail: As of December 12, 2003, we have the 24 categories that I got from the B.C. employment and assistance program on their website. When was the twenty-fifth exemption added, and what is that twenty-fifth exemption?

Hon. S. Hagen: The twenty-fifth exemption was added February 6 of '04. It reads as follows: "People" — who have a time limit count of 24 — "who have an employment plan, are complying with their plan, are actively looking for work but have not been successful in finding employment."

J. MacPhail: I can't remember. When was the minister appointed to the position of Minister of Human Resources?

Hon. S. Hagen: I'm sure my staff will remind me when I was appointed to be the Minister of Human Resources. I know it was in late January. It was prior to the February 6 that I….

Hon. S. Hagen: Okay. I'm advised by one of my colleagues that the auspicious day was January 26.

J. MacPhail: What discussions occurred with the minister at the time about adding a twenty-fifth exemption?

Hon. S. Hagen: Obviously, when a new minister comes into a portfolio, you have discussions with the previous minister and you have discussions with your colleagues. I had discussions with many people on a number of issues in the ministry. Actually, in our caucus we have a lot of interest in this ministry because it deals with people. I encourage all members to come and talk to me about issues that they have.

J. MacPhail: I would expect — and this is only my personal opinion — that any minister who was assigned this portfolio newly, with April 1 approaching and with huge outrage against the two-year time limit and all the anxiety amongst municipal politicians, etc…. Any politician worth his salt would ask his own government to back off on the two-year rule. Actually, I would have hoped this minister would have claimed credit for successfully negotiating the twenty-fifth exemption.

I'm going to refer to the B.C. employment and assistance Factsheet — December 12, 2003, "Time Limits." The minister actually read it into the record. That's the list he read into the record that he claims were the original exemptions. I don't agree with him at all. If these were the original exemptions, why did they keep them in such detail from people who were accessing the website? Why did they keep them from their own staff? Perhaps the minister could go through and explain the rationale behind the 24 exemptions.

Hon. S. Hagen: First of all, the member opposite is incorrect in saying that the exemptions were kept from staff or from the public. As I've said repeatedly, the exemptions are posted in policy and regulations and on the website. I don't know how she can make that claim. That mystifies me.

The rationale behind the 24, obviously, is to fulfil the guidelines of the policy — reasonableness, fairness and common sense. Let me reiterate that the focus that we have here is to actually give people the opportunity to go to work and contribute to the economic well-being of British Columbia and to the economic well-being of themselves and their families. For the life of me, I can't understand why the member opposite would be opposed to that.

J. MacPhail: There's no time for that kind of accusation, Mr. Chair — none. This is going to be a difficult enough debate on the facts. The minister knows that what he said is just simply ridiculous, based on my own record — absolutely ridiculous.

Let's just ask this minister while we're waiting for the bureaucrats, for whom I have a great deal of respect, to come up with the first postings on the website. Is the minister saying that the 24 exemptions were made available on the website for the ordinary citizen? As early as when?

Hon. S. Hagen: The reg changes are posted as soon as possible after they become law.

Hon. S. Hagen: That information is coming from staff with the other things we've asked for.

J. MacPhail: All right. Well, I'll save some of my questions about the procedure upon which regulations were added to.

Hon. S. Hagen: The 24 exemptions have cabinet approval. The twenty-fifth is pending cabinet approval.

J. MacPhail: What's the cabinet approval of the 24? When did that occur? Is this what I'm waiting for — the regulation change? The minister is nodding yes.

It will be interesting to see how the regulation change…. The regulation change around the two-year time limit that hasn't been passed yet is on the website. That will be very interesting.

The twenty-fifth exemption, the one that says, "People who have an employment plan, are complying with their plan, are actively looking for work but have not been successful in finding employment," I gather, is not in regulation yet, except that it is April 1. What are the front-line workers doing about this?

Hon. S. Hagen: The twenty-fifth amendment is in policy, front-line workers are acting with that policy,

and April 1 is not the deadline or the date in question. As I mentioned at the beginning, the April cheques have already gone out. They went out March 24. Any adjustments will be made during and before the cheque run in April, which would be for May.

J. MacPhail: Well, let me quote from Ginger Richards, the retiring financial assistance worker that was on CBC radio's Early Edition this morning, April 1. I've actually asked for a transcript because I heard her on the radio. She retired yesterday, and I gather Ms. Richards has been a longtime financial assistance worker.

Here is what she said. In response to a question from the radio host — "Why do you believe the government is still pushing people off welfare?" — her answer was this: "They still have budget cuts to meet. They did back off the automatic two-year time limit with the twenty-fifth exemption, but the message the workers have been getting is that it's business as usual, but the workers will have to do the job instead of it being automatic or the computer doing the job." Given the fact that the twenty-fifth exemption is not in regulation and doesn't have any legal status, how is the government going to enforce it?

Hon. S. Hagen: The member opposite is correct. Ginger was a longtime worker, I think 23 years in the ministry, and retired yesterday. I thanked her on CBC radio this morning for her service to the public and to the people of British Columbia.

I just want to remind the member opposite that the purpose of time limits, really, is to motivate employable clients to find a job as quickly as possible and to stay employed. I'm told — and I have visited with some of the people who deliver these programs in my ministry — workers have been giving feedback that they are happy that they have the tools such as the employment plan to help clients find the work that they need.

I think the proof of this is the fact that since June of '01, when we were sworn into government, the number of people on income assistance has decreased by 85,000. That means there are 85,000 British Columbians out there who are now working instead of being on welfare.

Hon. S. Hagen: Yes, the number of individuals on income assistance in June of '01, in round numbers, was 240,000. That has decreased by 85,000 to 155,000. Included in that 85,000 number are the nearly 30,000 clients who have been assisted by the job-training programs that the people of British Columbia pay for. During that three-year period, we've spent about $300 million on job-training programs.

If you think about that from a human standpoint, imagine if you have been on welfare for a number of years and then you are able to go out and get the help through the job-training program through one of the providers the ministry contracts with. All of a sudden now you're working instead of being on welfare. What a difference to a person's life.

D. Jarvis: I would like to introduce one of my favourite schools in North Vancouver–Seymour. That's students from Dorothy Lynas Elementary School. There are 27 grade 5s and 6s in French immersion. They are accompanied by their teacher Madam Guay and also parents Dan Jenni, Len Glass, Kim Thorne and Dan Brent. If everyone would make them welcome, please do so.

J. MacPhail: The minister said that there are 85,000 fewer people on welfare and they've got jobs. What's his proof of that?

Hon. S. Hagen: We have performance-based contracts with our job providers, and they report to us the numbers of people who are put into jobs and are working.

L. Mayencourt: The minister just raised a very excellent point. It just occurs to me…. Could I ask this question: how many people were on welfare when the Leader of the Opposition was the Minister of Human Resources?

Hon. S. Hagen: The number of individuals or people — and I think this was actually, in all fairness, just prior to the member opposite being the minister — on the welfare rolls in 1995 was 375,000.

L. Mayencourt: That would mean no one has kicked more people off welfare than the NDP. Is that true?

In June of 1995 there were 375,000 individuals on income assistance. In June of '01 that number had decreased to 250,000, which means that 125,000 people came off income assistance during that period of time. In January of '04 we're down to 165,000 people.

L. Mayencourt: I'd just like to correct what I really was…. When I said "kicked off of welfare" and "the NDP," I guess I was trying to use the words that had been used by the member for Vancouver-Hastings. Presumably, 125,000 people during that time also found work.

The issue that also comes to mind is the one raised by the Leader of the Opposition, and it has to do with the issue of disability. I am familiar with this because of my work in a non-profit sector. She spoke a little earlier about the disability caseload. When I was working in the non-profit sector, working with people living with AIDS and cancer and such, the NDP had a piece of legislation that allowed for disability benefits to be applied for under schedule C. It is my recollection that while schedule C was there, and it was viewed by the community as a protection against catastrophic illness, virtually everyone that applied for schedule C was rejected by the Ministry of Human Resources.

It seems to me that the definition we have put in for disability is much broader, and it allows for people to access disability benefits in a much more humane and compassionate way. How many people were on disability pensions in 2001, and how many are there today?

Hon. S. Hagen: In June of '01 the caseload for persons with disabilities was 42,899. In January of '04 it was 51,448.

J. MacPhail: I'm not quite sure what point either the minister is trying to make or the member for Vancouver-Burrard. Let's be clear about what happened in the 1990s. Yes, the number of people on income assistance was unacceptable. It was unacceptable to the previous government, and it was unacceptable to the then opposition. They were hammering the then government every day in the Legislature about income assistance. They accused people of fraud. Indeed, we bolstered the investigation into welfare fraud, but we also took the allegation seriously about change needed in moving people from welfare to work.

In fact, we conducted a full-scale consultation, months of consultation — a round table that involved clients, front-line workers, academics, economists, advocates — and we published a report that led to legislative change. What was included in that legislative change? The first-ever family bonus, or child bonus, in the country. What we learned was that six out of ten single moms being on welfare was encouraged by a negative policy, which was that moms on welfare got more money on welfare than if they went into the workforce, so we instituted the child-family bonus. I think it started out to be just a little over $100 a month per child. It was what the mom on welfare got for her child, and when she went into the workforce, she got that same support. It was hugely successful in moving single moms from welfare to work. In fact, it became the national model for the federal government to institute a child-family bonus system.

What was the cost of that investment? I think it was about $380 million per year to start. I'm doing that from memory; I'm sure the ministry officials will be able to back that up. That's $380 million of new money we invested in children and their moms going to work. They could only get the family bonus if they went to work, so we know — we have proof — that those moms went from welfare to work. That's the great news. Of course, now that is a model across Canada.

We also expanded child care for parents so they could go to work. We expanded employment training and the benefits that people could get going to work. We paid for the workboots, for instance. We paid for their bus fare, their travel expenses. I will be exploring whether any of those programs have been enhanced or whether they've been cut. I'll get to those questions.

I'm not quite sure what point the member for Vancouver-Burrard made. Is it tough policy? Is it tough politics moving people from welfare to work? You bet your boots it is. It was controversial inside the NDP. It was controversial. We have a party that actually holds its politicians to account and that makes its politicians justify the changes. Year after year the then government of the day was held to account by its own party. I have seen no record of that by this Liberal caucus or the Liberal Party — none whatsoever.

I'm very happy to have that debate, but let's be clear. The government can't have it both ways — simply cannot have it both ways. When I ask the minister what proof he has that the 85,000 fewer people on welfare have found jobs, I'd actually like to have those reports. I'm requesting those reports, because there has been nothing in public to justify that. In fact, the ministry has stopped giving its exit reports, as far as I know, about people moving from welfare to work. They started doing that, and then the media poked huge holes in those exit reports to show that less than a third of the recipients could even be contacted.

Mr. Chair, I note that there is a setup for an open cabinet meeting tomorrow. The Legislature is getting all ready for an open cabinet meeting. Will the minister be bringing the twenty-fifth exemption for approval via OIC to cabinet tomorrow?

Hon. S. Hagen: As the member well knows, that's future policy. I'm not going to discuss what I'm going to bring to cabinet anytime in the future.

J. MacPhail: What is the time line? I'm trying to figure out how front-line workers are to uphold the twenty-fifth exemption, which of course is a very key exemption. Let me read it into the record again. The twenty-fifth exemption is that people are exempt from the two-year rule who have an employment plan, are

complying with their plan, are actively looking for work but who have not been successful in finding employment.

Of course, I'm doing that along with the comments made by Ginger Richards, the financial assistance worker who said this morning that the government did back off the automatic two-year time limit with the twenty-fifth exemption, but the message the workers have been getting is that it's business as usual.

Given the fact that the twenty-fifth exemption is not yet law, could the minister tell me how the front-line workers operate as of today with regard to the twenty-fifth exemption?

Hon. S. Hagen: First of all, I have a lot of respect for the front-line workers in my ministry. I know that they are carrying out meetings with the people whose files they carry, that they are talking to those individuals about their employment plans and that they're on schedule with those employment plans. There's a training schedule in place for training the employees on the 25 exemptions, and that training will be completed before the decisions are reached at the end of this month as to who doesn't qualify for income assistance.

J. MacPhail: I might just add one other thing to the record of the New Democrats in terms of welfare reform. The bottom line was that anyone who needed welfare got it — that there were none of these exemptions, none of the two-year rule, three-week waiting periods. In fact, under huge pressure from the public, who were very concerned about people coming from other parts of the country and bolstering the B.C. welfare rolls by 2,000 per month, I actually went to Ottawa and met with the then Minister of Human Resources, who was Lloyd Axworthy.

I said: "Mr. Axworthy, if you don't start fully funding the federal share of welfare and stop putting the entire burden on the people of British Columbia, we're going to impose a three-year residency requirement." It was a huge step and a very controversial step inside our party, but not with the public. The public was fully in support of it, as were the advocates of welfare. They were dismayed that 2,000 people were coming each month from Alberta and Saskatchewan and Ontario and going on welfare in British Columbia and that the federal government had opted out.

Anyway, with that threat, the federal government was required to again fund its proper share of social assistance in this province, and it was on that basis that we were then able to move forward with real welfare reform. But at no time was anybody who needed welfare as a last resort denied it, like this government does every day with its three-week waiting period and two-year time limit. So the debate has to be honest, and it has to be comparable on the facts.

Let me then just urge this minister that in the open cabinet meeting tomorrow, he has the perfect opportunity to finally make law the twenty-fifth exemption and therefore not put front-line workers at risk with perhaps advocating a policy that is not law and that perhaps this government could reverse at any moment. Let me ask the minister for this reassurance. If a front-line worker applies the twenty-fifth exemption, will he or she be backed up fully by this government in spite of it not being law?

Hon. S. Hagen: There is no need right now to apply that, but certainly when they reach their twenty-fourth month on social assistance, our front-line workers will be carrying out instructions, which include the twenty-fifth exemption.

J. MacPhail: Mr. Chair, we're going to get into more stuff around employment and programs, but my staff just sent in to me the most recent MHR exit survey for people moving from welfare to work. It's the summer of 2003. Does the minister have a more current one than that?

Hon. S. Hagen: The latest one we have, I'm told, is November of '03. We're unable to confirm that it's on the website, but we will confirm that as quickly as we can.

J. MacPhail: Sorry. Just let me ask for a clarification. The website research and statistics say that the ministry released a report November 7, 2003, but that was the MHR exit survey of the summer of 2003. Is the minister saying he has one that actually is an exit survey of people in November of 2003?

Hon. S. Hagen: We have done a Q-7 or a quarter 7 exit survey. If it's not on the website — because we can't confirm that yet — it will be posted.

J. MacPhail: I note from the survey from the Q-6, quarter 6, respondents, which is the most recent one I can find…. Here's what the survey response was. It's on the basis of this that I am curious as to how the minister can say that 85,000 fewer people that are…. The minister is saying that there are 85,000 fewer people on welfare since his government took office and that they've got jobs.

I'm wondering how he can possibly justify that, because here's what the quarter 6 respondents survey said. The survey cohort was 2,281, and there were no phone numbers for 43 percent of those. A further 14 percent were unavailable for interview. The total contacts were 44 percent, and of that 44 percent, only 37 percent made a response. Then there were actually 2 percent of that 37 percent back on income assistance, so the number of interviews completed was 35 percent. About a third of the people were even contacted to decide their future. I'll be very curious to see the minister's justification for his claim that people who leave welfare have moved to work.

Mr. Chair, I want to ask the minister if he can give us the plan for making the cut of $79.4 million this fiscal year to temporary assistance.

Hon. S. Hagen: That will be accomplished by moving people through the job programs and moving them into jobs.

J. MacPhail: What is the regional breakdown for achieving the $79.4 million cut?

Hon. S. Hagen: I'm told by my staff that that information is not available yet. It's the start of the fiscal year, and those numbers are just being compiled.

J. MacPhail: Can the minister refer to page 152 of the Budget and Fiscal Plan 2004/05- 2006/07? I'm looking at table A11, "Material Assumptions." It's under "Human Resources." I'll just wait a second for the minister to find that, and then I'll proceed with my question.

I'm looking at "Human Resources." This is a chart, for the benefit of the public, where the Minister of Finance makes what he calls — and I agree with him; it's a legitimate term — material assumptions about being able to meet budget targets. We used to call it "risks." I think I did it when I was Minister of Finance — upside risks and downside risks. Anyway, whatever, it doesn't matter.

The material assumptions. I know here that under "Temporary Assistance," there are assumptions about how the minister is going to meet his budget cut in temporary assistance of $79.4 million. Could the minister explain this, please?

Hon. S. Hagen: I think the member is referring to: "The expected-to-work caseload is sensitive to fluctuations in economic and employment trends in the service sector." Is that what you're referring to? Could you ask the question again?

J. MacPhail: Yes. The area I'm exploring here is the fact that the minister has had imposed upon him by the Finance minister a financial cut in the temporary assistance fund of $79.4 million. I'm trying to find out from the minister how he is going to achieve that and what the regional implications of that are.

I'm referring specifically to the assumptions that the Minister of Finance has made about the ability to achieve that cut. What the Minister of Finance says — I'm paraphrasing, Mr. Chair, and feel free to push back at me — is that this cut will mean that the caseload will drop from 66,600 temporary assistance cases to 56,500, and that includes expected-to-work, temporarily excused and persons with persistent multiple barriers to employment — and that that level of caseload is sensitive to fluctuations in economic and employment trends in the service sector.

The ministry must have done some work about what those trends will be in order to permit them to make a $79.4 million cut in their budget.

Hon. S. Hagen: As the member pointed out, there are a number of external factors we have to contend with. The fact of the matter is that these clients are moving into employment. There are new jobs all the time. Our job training and placement contractors tell us there are 10,000 vacant jobs throughout the province at the present time, and there are opportunities for these clients to move into those jobs. We're confident that we can meet those numbers.

J. MacPhail: Unemployment is going up. There were 36,400 jobs lost last month in this province alone, so I assume the minister must have some predictions that override that.

I want to just go back to what Ginger Richards, the financial assistance worker, said this morning. I'm actually just quoting from the media interview she did this morning. She was asked about quotas and targets, the very topic we're discussing now. Here's what she had to say: "It's part of a closely enforced monitoring plan. There is tremendous pressure on workers to get plans done, to make sure that everybody on their caseload is eligible, according to the new restrictive rules put in place in 2002."

She was asked what the workplace was like these days. She said: "Morale is poor. The stresses of the workplace are horrendous. They have dumped a huge number of duties on workers in the last few months to get done before the end of the fiscal." The end of the fiscal was yesterday. The reason why I'm exploring all of this is because I'm trying to figure out what the plan is of the ministry to meet its budget targets of cuts and to do it in a way that actually meets the test of the 25 exemptions.

On February 13 of this year I remember hearing a worker who represents people who have been told their benefits would be reduced or cut. These are lawyers that are preparing a constitutional challenge of the provincial government's two-year time limit on welfare. They were seeking February clarification from Victoria on its latest changes to the plans. They're still disturbed that this twenty-fifth exemption is not law.

Here's what they said. The lawyer, Sarah Khan, represents several people who have been told benefits would be reduced or cut off. Khan says they haven't been told whether they are covered by the sweeping exemption for those actively looking for work. These are people who have been told previously that they would be reduced or cut off. "We have heard many stories of employment plans that are quite unreasonable and often unrealistic. And yes, we are concerned that the government might try to use these plans to still reduce or end benefits for many recipients." So you put that together with the comments of Ms. Richards this morning about the huge pressure being put on front-line workers as the fiscal year concluded…. This is why I am asking about how the ministry is planning to meet this $79.4 million cut.

Here is a further news release from the Public Interest Advocacy Centre, dated February 13, 2004. "In light of the announcement of the twenty-fifth exemption, we need clarification. Our clients are very busy working, looking for work and complying with their

employment plans," said Patricia MacDonald, staff lawyer with the B.C. Public Interest Advocacy Centre. "But they have not been informed that they're exempt from the application of the time limit. They are close to the 24-month limit and face being cut off or having their benefits reduced. They are extremely anxious."

It is very important for us to understand how front-line financial assistance workers are operating as of today. I appreciate that the minister said the cheques have gone out for April. However, the law is the law. It is April 1, and financial assistance workers are describing publicly that they're under pressure.

Hon. S. Hagen: I love to hear the opposition base their views on one out of 2,000 employees in the ministry — a former employee, who retired yesterday. I doubt very much….

Hon. S. Hagen: The criticism is actually of the member opposite, who takes one person that she's heard on the radio and uses that to form her thoughts and her policies on how she's going to present this.

Hon. S. Hagen: Having said that, in response to the member's question I want to talk a bit about B.C.'s labour market dynamics. As the member well knows, this province is number one in job creation over the past two years. It's number one in job growth. Now, that's not the government that's created those jobs. That's investors and companies and small businesses who, because of the confidence they have, have actually now started to grow and to hire people. Certainly, there have been a large number of new jobs created by business and industry in the province over the last two years — well over 100,000.

More than two million people are now working in British Columbia for the first time in British Columbia's history. Take-home pay is growing. Job growth in 2003 was almost all in full-time employment, which is another good-news story. Employment grew throughout the province in 2003, with the exception of northern Vancouver Island — which is now turning around because of government policies on market-based stumpage, and loggers are going back to work. The total number of job vacancies filled in B.C. during 2003 is expected to have exceeded 570,000 jobs. The job placement program currently has about 10,000 vacancies. We know the employment rate is continuing to grow.

I want to talk a bit about employment plans, because there were some questions raised by the member opposite with regard to employment plans. Again, I want to pay tribute to our front-line workers. I mean, they're not treating clients as if they were computers. They're actually meeting with clients, talking to them about their employment plans and helping them get jobs so that they can get off the cycle of welfare.

As I said before, I think every British Columbian, every Canadian would agree that the best social program in B.C. or in Canada is a job. The mandatory employment plan is designed to help increase the rate of leaving and to reduce the rate of cycling. The employment plan focuses the efforts of the ministry and the client on finding sustainable employment. Clients who are compliant with their employment plan, who are actively looking for work, will not be subject to time limit consequences. Most people actually don't want to be on welfare, but they may need assistance in finding work. We want to make sure clients are first in line for those jobs. Yes, clients are expected to work if they're able to work.

Ministry staff develop the employment plan with the client, using the employability screen and the client employability profile. They have been specifically developed to assist with employment planning. Staff work together with each client on an employment plan that will provide specific direction and suggestions to lead to employment and then independence. Plans may include referral to independent work search, job placement or training-for-jobs programs as well as non-ministry programs and services. Clients not required to have an employment plan can access services by signing a voluntary participation plan which outlines steps to help the client prepare for and participate in future employment.

K. Manhas: Today in the House I would like to introduce a very talented young individual. Matt McLeod is a management consultant with Deloitte Consulting and has been a core member of the strategy team that has been working closely over the past few weeks with the Ministry of Management Services on the renewed and very important work of building the B.C. government e-portal strategy.

Matt, having grown up on the east coast and then spending most of the last ten years in Montreal, came out to B.C. about two and a half years ago when he saw the splendour of what B.C. had to offer in terms of opportunity and lifestyle. As a young person he saw renewed hope and confidence in building a future in B.C. that rewards hard work, talent, new ideas and success after the election of the B.C. Liberal government.

Would the House please join me in making Matt McLeod very welcome here in the Legislature.

J. MacPhail: Mr. Chair, I must say that my staff is trying desperately to access the website in a way that will produce the documents that the minister is suggesting about time limits. I have to tell you that it's very confusing. My staff just did it. They just went to the fact sheets on the Ministry of Human Resources, and the most recent printable version that they're able to get off the website is not even in the December 12 update. It's the October 8 update for the printable version. I can hardly wait to see how the ordinary public is supposed to access all of this stuff about the changing rules that the minister says is available.

What is the rate of unemployment that the minister has for his prediction of meeting his $79.4 million cut to welfare, temporary assistance? What unemployment rate is he predicting to achieve that?

Hon. S. Hagen: We use the same number that the Minister of Finance has used in the budget forecast.

J. MacPhail: That's what the unemployment rate here is right now — 7.9 percent in British Columbia. What's the forecast? What happens to the caseload if the unemployment rate rises and at what pace? All of these calculations should have been done in order for the minister to meet his $79.4 million budget cut — to have any hope of doing it.

Hon. S. Hagen: I'm informed that we have not yet forecasted the impact for the new fiscal year, but last year the calculation was that for each 1 percent difference in the unemployment rate, it meant $12 million.

I want to give the minister a heads-up as to what I'm going to be exploring after lunch. It is a rather interesting search for information on how the ministry is giving its front-line workers advice on administering the twenty-fifth exemption. Let me work through this, and the minister can come back this afternoon, I assume — well, whenever we next convene his estimates.

I have a manual amendment letter, No. 16. It is dated the same day as the news release adding the twenty-fifth exemption. That manual amendment letter, dated February 6, 2004, is to all holders of the B.C. employment and assistance policy and procedures manual, re employment obligations.

It is the document by which they introduce important changes to the B.C. employment and assistance program effective February 6, 2004, which was the addition of the twenty-fifth exemption. I would like the minister to answer, after the break, what impact that has on guiding financial assistance workers in their dealings with people receiving financial assistance.

Then I want to relate that manual amendment letter, No. 16, to an e-mail from the assistant deputy minister on case management process sent February 10. That e-mail is from an Alison Meredith. That e-mail, dated Tuesday, February 10, says, "The details of the interview and related case management processes can be found in a practice advisory posted on the field guide under the 'What's new' section of time limits at…." Then it gives a URL.

Well, that advisory is no longer accessible. We've got access to the field guide practice advisory. That link is no longer there. I will be asking the minister to explain what the practice advisory advised and whether that practice advisory is still being applied in the field and then questions around the manual amendment letter No. 16, specifically as it relates to sanctions and penalties for people with employment plans or lack thereof.

J. MacPhail: Noting the hour, I was going to say we rise, report progress and ask leave to sit again.

L. Mayencourt: Thank you, Mr. Chair. I appreciate you noticing that I wanted to speak on this item. I wanted to….

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

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

J. Kwan: Yesterday we were dealing with the increased pressures for school boards. Particularly, I was asking the minister questions about salary increases. The minister's response was that the impact of the salary increase starting three years ago was approximately $50 million in each year. In the first year, the minister funded it. In the second year, the school districts had to account for that. In that time period, we also added $124 million in one-time grants to assist school districts with meeting some of their pressures, etc. I just want to go back to canvass that a little bit, because the information that I have on last year's estimates from the former minister seems to provide a slightly different picture from what the minister had advised yesterday.

On November 24, 2003, the former Minister of Education stated in the House that the total cost of the teachers salary increase was worth $338 million. The same minister also stated on the same day that the government funded about half — the first half — of the settlement. If that's indeed the case, that would be about $150 million. The result is a $188 million shortfall for school boards. The government paid for the first year of the increase. If the contract was worth $338 million, is that the total pressure the school boards face each year, since salaries are now 7½ percent higher than they were in 2001?

Hon. T. Christensen: Because it's 2½ percent in each year, it actually adds in $50 million more in each year. It's $50 million in year 1, $100 million in year 2 and $150 million in year 3. The $50 million in year 1 that the ministry funded — that $50 million we funded straight through. So it's $50 million in year 1 from the ministry, $50 million in year 2 from the ministry and $50 million in year 3 from the ministry. That would account for $150 million of the $300 million.

In year 2 school districts had to account for $50 million of it. In year 3, the year we're just ending, that ended yesterday…. I shouldn't say that. Actually, it's their school year. In this current school year it would be $100 million.

Hon. T. Christensen: Yeah. We had some good discussions yesterday about the school fiscal year versus the government fiscal year.

I do want, as we start this morning, to introduce the staff I have here, because I have one additional staff member here today. I'm joined again by Deputy Minister Emery Dosdall on my right and Keith Miller, who's the director of funding, on my left. Back on my right is Rick Davis, who's the superintendent liaison. Next to him is Ruth Wittenberg, who's an ADM in management services. All of them were here last night, but today we're also joined by Pat Brown, who is the manager of budgets for the Ministry of Education.

I do want to take this opportunity, as well, to clarify a couple of issues that we indicated to the member's colleague yesterday we would try to get answers to. We might as well get those into the record now.

The first was with respect to table A9 in the fiscal plan. There was a question from the member for Vancouver-Hastings last night regarding the $4 million deficit that is there in 2006-07. That's on page 142 of the fiscal plan. That number comes from our forecast of school districts' fiscal positions at the end of '06-07. That forecast was prepared in consultation with school districts and Treasury Board staff and was completed this last January as part of the drive towards accounting under GAAP.

It does reflect what school districts knew at that time. It does not reflect the lift of $150 million for '06-07 that will go to school districts, because that wasn't known when the number was prepared in February. We do expect that the lift in operating funding in '06-07 will mitigate that small forecast deficit. I'm told, as well, that the actual deficit is more or less within the margin of error in terms of calculating those figures, because it's a $4 million figure, and we're talking about well over a $4 billion enterprise. We certainly expect that as we do additional work through this year and as we approach '06-07, that deficit won't be there — making it consistent with sort of what's currently happening.

There was a further question that the member for Vancouver-Hastings had asked in terms of whether we take out the $35 million that is directed towards GAAP in each year moving forward. As I said yesterday, as we get through each year, a greater portion of that $35 million will actually not be encumbered by GAAP, because the school districts in each year will get closer to a zero balance in terms of their unfunded liabilities.

If we take that out and then just look at the average per-pupil funding moving forward in 2004-05, it's — and again, these are projections, because the enrolments can obviously change — $6,687 per pupil FTE; in '05-06, it's $6,793 per pupil FTE; in '06-07, it's $7,128 per pupil FTE.

That, of course, would be relevant to districts that have to take the full portion of their GAAP funds and put them towards unfunded liabilities. If you're in a district like Nechako Lakes or Surrey that has set aside most or all of the chunk of money to cover off those unfunded liabilities so that they already have a zero balance for their unfunded liabilities, their actual per-pupil average would be higher because they can use that money for programs because of their prudent management of their budgets in the past.

Finally, there was also a question in terms of the independent schools and what's happened there with enrolment. As the member may know, there are essentially four categories of independent schools. Group 1 is funded at 50 percent of the per-pupil amount that we fund to public schools. Those are typically your faith-based schools, independent schools that follow the B.C. public school curriculum. They saw an increase in enrolment of 3.81 percent in 2002 and then a decrease last year of 1.15 percent.

The group 2 schools, which are funded at 35 percent of the per-pupil FTE, are typically what I think we would refer to as the private schools. St. Michaels is probably a good local example of that. In 2002 their enrolment increased by 6 percent, and in 2003, by 5½ percent.

There are then the group 3 schools that we don't provide any funding for. They tend to be faith-based schools, but they don't follow the B.C. public school curriculum, and that's why we don't provide any funding. They're a relatively small amount, so these statistics are probably a bit skewed. To give an example, their actual enrolment in 2001 was 694 students, and in 2002 it was 677, which is a decline of about 2½ percent. Then there was a large increase in 2003, to 1,208 students, so presumably a new school opened. That actually shows a percentage increase, then, of just under 44 percent.

Finally, there are the group 4 schools which, again, we don't provide any funding to. They are the international schools, so they are bringing in international students. We're not funding them, although they do tend to follow most of the B.C. curriculum. Again, there's not a great number of students there, so the percentages are probably irrelevant. Overall, in terms of independent school enrolment, which would include all of those categories, we're projecting a percentage increase in enrolment of about 4.4 percent based on historic trends.

J. Kwan: Thank you to the minister for that information, because I wasn't part of the debate yesterday, and I didn't have a chance to go back to Hansard after we adjourned last night to read all that happened in this House today.

Could I get a clarification — and that might be a question that my colleague had already asked — on the funding increase for private schools, for independent schools? Is that all to do, then, with increasing enrolment?

Okay. Well, then let's get back to teachers' salaries — teacher salary increases. On the basis of the fiscal year differences, the minister is saying it's about $50 million if you base it on the school districts' fiscal year-end compared to the provincial government's fiscal year-end, but if you actually take in the full year, then the amount is really doubled. It's more than $50 million. You're really looking at about $100 million, so the numbers that were given from the previous ministers are more accurate. It's cumulative as well, so it's year over year, as it adds up. So there is a result of about $188 million shortfall which school boards are faced with.

Even with the one-time funding injection that the government provided, that doesn't cover for the entire increase. I would say that it covered about half — a little over half, perhaps — of the salary increase. Even with the extra $50 million this year, again because it's cumulative, it only covers a portion of the salary increase.

Maybe the minister can give me the actual figures that he sees school boards have to contend with, with the salary increase for this year and for all of the years since the legislation was brought in.

Hon. T. Christensen: The cumulative impact over the three years, including this school year that will end in June of 2004 — the school year we're currently in — is estimated to be $150 million. Now, I emphasize "estimated" because part of the challenge in this is that your actual teachers salary pressures depend on the number of teachers in your district, which will obviously depend to a good extent on the number of students in your district. We have seen declining enrolment provincewide, and in some districts very significant declining enrolment.

It also depends very much on the seniority of your teachers, because the longer you teach, the more money you make under the collective agreement. Those districts that have had more teachers retire and have brought in new teachers — their actual overall salary costs go down, as would be expected. So it is difficult to know. In terms of the actual salary costs for this coming year, we'll know those figures in October, and we could certainly provide them to the member at that time.

But there is the on-the-ground reality in terms of the teachers salary pressures that is very much dependent on the makeup of the district and where they're moving forward. The ministry does try, in

terms of our overall funding formula, to provide some equity around the province in terms of that pressure through an adjustment for salary differential that is built into the funding formula.

J. Kwan: It is a shortfall, nonetheless, then. Just on the teachers salary side, we've been able to identify that in terms of shortfall for the school districts — and that, of course, when you add up the other pressures that were previously talked about…. Hydro rates are an example, and MSP premiums and benefits and so on. Even with this one-time funding injection in terms of increase, school boards are still underfunded for these basic costs that they must pay — recognizing that, yes, various school districts may have variations in terms of the teachers salary rate, depending on their level of service, the years of service. Ultimately, school boards, generally speaking, are underfunded because of these increased pressures. As the minister identified, the cumulative impact for three years is $150 million.

There is this issue that I would like to canvass with the minister. I recognize the issue of declining enrolment, but we must also recognize that when we talk about declining enrolment, it doesn't mean necessarily for the school district that there is less demand for services. It doesn't mean, in fact, that the declining enrolment all falls in one class — let's say grade 4 students, and they're all in grade 4 — so you can do away with that one class. Oftentimes they're, you know, varying ages, and therefore varying demands are still needed, because the declining enrolment doesn't all just happen in one place. On that basis, classes are still needed, teachers are still needed, and services are still needed, and declining enrolment with the decrease in support doesn't help matters.

As far as we can garner, according to the press release from the government and as repeated by the Premier and the Minister of Education, education spending will increase by $313 million over three years. Then, of the $313 million promised for education over the next three years, the vast majority of that money is promised after the provincial election on May 17, 2005. For the year 2004-05, the increase, as far as we can gather, is $83 million, and only $50 million of the $83 million will go to public schools.

When you look at those figures, the new downloaded costs, which we were talking about earlier, include hydro rates, which, according to our calculations, are about $2.5 million; unfunded teachers' salaries, about $73.3 million; and MSP premiums, $18.3 million. When you add all that together, it's a downloading of $94.5 million. With the new funding of $50 million and also the grants that were given in March of $32 million, that's $82 million.

When you look at that…. Then, also, in that increase in funding, we have to account for the dollars that are set aside for GAAP, which is $50 million. So when you add up all of this stuff, the downloading costs and also adjusting for inflation, the real per-pupil funding is actually $165 less per pupil than in 2001. In the newspaper ads, the government is claiming that the per-pupil funding has increased by $532 since 2001. That's the lay of the land that we have.

Let me just stop there for a moment, and if the minister disputes the numbers and the calculation of these numbers, I would ask him to put that on record so that we can agree on where we're at.

Hon. T. Christensen: I want to clarify something around the teacher salary pressure. We're finding that the average teacher's salary…. Notwithstanding that the collective agreement called for a 2.5 percent increase, if you group all the teachers in the province together and the amount paid for teachers' salaries, the increase in year 1 was about 1.7 percent. In year 2, it was 0.7 percent. This year we're expecting — we don't know yet, but we're expecting — that it will decline. That's simply a reflection of teachers retiring. The younger teachers come in at a lower rate. We're expecting within the ministry, based on the information we've got, that the salary cost for teachers overall is actually going down this next year, so it's not an increasing pressure.

I don't know where the member is getting the numbers that she's working with. Certainly, there are a number of cost factors involved in operating any school district, and they vary from one school district to another. What we look at, in terms of the ministry and our goal, is to continue to increase education funding so that school districts have the funds they need to continue to improve student achievement. We're going to work with them on that.

Also, we've been pretty clear since this government was elected that we think school districts need to have the autonomy and the flexibility to make those decisions. There really are two general choices. One is that Victoria can set up a great long list of funding categories, and we can fund those things, manage those budgets and really leave school districts to not do much of anything. Or we can work to increase the overall education funding within the context of the province's overall finances and give school districts the autonomy to manage their pressures. Some school districts will have a very difficult time in doing that, and some school districts will have a relatively easy time in doing that. I shouldn't say relatively easy. It will always be challenging, but they will be more successful in doing that.

Not surprisingly, that's the way it's played in the last three years. That's the path that we've chosen. We think that's the most appropriate path in terms of allowing school districts to make choices that best reflect the needs of the region or the area of the province that they serve and the students that they serve.

Overall, if you take the number of students in the province and you take the funding that is going from the ministry to the school districts…. These aren't funds being spent by the ministry for central costs. This is the money going from the ministry in direct grants to school districts. We know that that simple calculation

shows that the per-pupil funding going from the ministry to school districts has increased by a little over $500 in the last number of years.

J. Kwan: The information that I have gotten has come from a variety of sources. Some is from press releases, the government's announcements, figures and information about projected estimates for salary increases based on the collective agreement language, information that we've received from a variety of research we've done in terms of the projected number of teachers that are in the system, etc. It comes from a variety of sources. There's no one specific source.

This is what we've got. If the minister is disputing these numbers and he maintains that the per-pupil funding, in spite of pressures, has actually increased by over $500, then I would like the specifics on it. I would like to get the minister's correction for me, and then let's go through this line by line in terms of where the funding formula has gone wrong. School districts tell me that for a lot of the kids in the system, their funding on a per-pupil basis has actually gone down in real dollar terms.

On January 30, 2004, the Ministry of Education announced an additional $85 million in funding for education for 2004-05. I think that's correct. That's from the government's released information. Over 40 percent of this increase — $35 million, that is — is allocated to pay for implementing the mandated accounting principles. That's GAAP. The remaining $50 million will be applied to district operating budgets, therefore bringing the total operating budget funding for B.C. schools to $3.875 billion for '04-05. That's the information I have.

When you look at increases in terms of pressures, electricity increases at a 7.23 percent rate increase in the year 2004-05, which will result in an additional approximate $2.5 million pressure to school districts next year. That's on the projected rate of a hydro increase, as we now know what we're anticipating.

The unfunded salary. The minister says — maybe that's where some of the numbers fluctuate, but I don't think by all that much — that on the collective agreement, it's a 2.5 percent salary increase cost for teachers and administrative officers and staff.

The minister says some of that might be lower on the basis of the length of time the staff or the teacher has served in the system, so therefore their pay scales vary. Some of it might be lower, and they may well go down in future years. But for the time being, the number I am using is the 2½ percent outlined in the collective agreement that was legislated by the government.

The projected cost is $73.7 million, and that is on the basis of the table that was derived from the government's preliminary budget operating expenditures from the Ministry of Education for 2002-03. Again, it's from a government source that we got that number. Then when you look at MSP premiums, increases will be about an additional $18.3 million in cost. We got that number from the Ministry of Finance and the Ministry of Health press release about the MSP premium increase to wage costs. That was provided February 7, 2002. That's how we calculated the $18.3 million for MSP premiums.

When you factor all these costs together and add them all up, the total is $94.5 million. The real per-pupil funding amount then drops by $62 over 2003-04 to $5,326 per full-time-equivalent student in 2004-05. The real 2004 per-student funding will then be $165 less than what it was in 2001, if we use 2001 as a base for comparison. In fact, if you use the year 1992, it's actually $355 less in per-pupil funding.

Let me stop there with these figures. If my projections are wrong, according to the minister's understanding, then I would ask the minister to give me the specific number — particularly on the pressures where it's increased — where I have gone wrong and what the correct increased pressure is in those areas.

Hon. T. Christensen: Some of the numbers the member refers to…. It sounds like she's referring to salary pressures that have been incurred in this last year, in '03-04, when there was a 2½ percent increase. I think the member referred to a $73.7 million figure. I don't know if that's the correct figure, but it may be in terms of the pressure faced in the '03-04 school year.

There's not projected to be any salary increase for '04-05. The 7½ percent increase from the last collective agreement has been completed, and there's not expected to be any further salary increase in '04-05.

The other, perhaps, disagreement here is how we're calculating per-pupil funding. We don't calculate per-pupil funding after taking into account every single cost that the school district has. It's never been calculated that way, because the reality is that the all of those costs that any school district faces actually end up…. Your per-pupil funding would end up at zero, because all of that money is somehow going to costs, whether they're staff costs, utility costs, building maintenance costs, staff benefits costs.

Certainly, in looking at the money we're giving school districts to allow them to manage the broad range of factors they have to manage in order to deliver education services to the children in their school district, we look at the overall funding we have. We try to maximize every single dollar in the Ministry of Education so that it's going from the ministry to school districts, to enable them to focus on services to the classroom. We clearly see that over the course of the last number of years there's been a steady increase.

If we look at the operating funding going to school districts and the number of students in those school districts over the course of the last number of years, we can see that in 1998 — I'm referring to the school year here, so it'd be the July '98 to June '99 year — it was $5,844; in 1999 it was $5,983; in 2000 it was $6,216; in 2001 it was $6,328; in 2002 it was $6,455; in 2003, $6,529; and now, in 2004, it's projected to be $6,748.

We've certainly seen a significant decline in students in the last five years, somewhere in the neighbourhood of 21,300 students. We've also seen, on

a per-student basis, a significant increase in the dollars going from the ministry to school districts — $904, in fact, between 1998 and what's projected to be the figure for 2004.

J. Kwan: That is exactly the issue that I want to highlight. Perhaps where the calculation differs is that when the ministry does their calculation, they don't account for increased pressures. They just go strictly on the funding formula for per-pupil funding, so therefore the minister sees an increase. While that is going on, the government has imposed increased pressures onto school boards — namely, benefits increases; teacher, support staff and administrative staff salaries that were imposed by this government; an increase in Hydro costs, which is related to the actions of this government; and so on.

These increases are anticipated increases caused by the government. Where we also differ is this. Prior to the 2001 election, the previous administration actually paid for these increases, so those costs didn't have to come out of the per-pupil funding as they do now. That's a significant difference. Those added pressures prior to this government taking office were never an added pressure for school boards.

Fair enough to say that school boards should manage their own affairs — and they do, Mr. Chair. They decide what programs to deliver, what school gets how much money, and all of those good things that they do. But they don't have to decide, with the increased pressure that government has foisted on them, with mandated costs such as hydro, MSP, teacher salaries, etc…. The previous administration paid for those increased costs, so they didn't have to come out of the classroom. The difference is now that those costs have to come out of the classroom.

When you net that out, the per-pupil funding in real costs for the child in the classroom has actually gone down rather than up, as the government and the minister like to claim. At the end of the day, where it really counts is what is going on in the classroom for the kids and how much money there is to support the kids in terms of their learning environment and their development. At the end of the day, it is that. When you calculate the increased costs into the per-pupil funding, it's a decrease in cost year over year, in spite of the fact that inflation is actually going up, that it costs more now to buy services than it used to.

That's the point I want to make with the minister. I think we have actually found where we differ in terms of that calculation, and I would say that that difference is a significant one and must be acknowledged by the government in terms of real impacts in the classroom. As I said, even when you account for declining enrolment, the fact of the matter is that declining enrolments don't happen neatly so that you can sit there and say that class can just disappear because all of a sudden 30 kids have disappeared — all in that one class. They don't. It's five kids here, two kids there, all in different levels. At the end of the day, the school districts still have to sit there and go, "Okay, I still have to have a class," even though three kids have disappeared from that particular classroom — or five or whatever. They still have to provide those services. Those costs are still there, and they don't just disappear because of declining enrolment, in that sense.

I think we've sort of set that straight. Let me then just put this on the record as well. The school board operating grants that were put out by the ministry show that a number of school districts actually have to deal with fewer operating dollars in 2004-05 versus 2003-04.

For the Southeast Kootenay area, their estimated budget for '04-05 is $43,615,236. In the '03-04 budget year, it was $43,981,080, so that's a decrease in terms of funding. The Rocky Mountain district is another district where their funding has gone down. I'll just round up the numbers rather than give the exact dollar figure, Mr. Chair. The operating grant for 2003-04 was approximately $29.5 million, and then the operating grant for 2004-05 is $28.9 million.

The Kootenay Lake area for '03-04 is $45.3 million, and for '04-05 it's $45.2 million. Arrow Lakes is $6.5 million for '03-04, and then in '04-05 it's $6.4 million.

Revelstoke's operating grant in '03-04 is $9.6 million, and the '04-05 year is…. For this one I need to go a little bit further. It's $9.67 million in '03-04, and it's $9.63 million in '04-05.

The Kootenay-Columbia area is $34.3 million in '03-04, and then in '04-05 it's $33.1 million. In Quesnel in '03-04 it's $32.9 million, and then in '04-05 they're looking at a $32.8 million operating grant.

For Powell River in '03-04 it's $19.4 million. For this one again, I need to go further. It's $19.499 million in '03-04, and then in '04-05 it's $19.465 million.

Central Coast in '03-04 is $4.2 million, and in the operating year of '04-05 it's $4.1 million. Haida Gwaii–Queen Charlotte is $9 million for '03-04, $8.8 million for '04-05. Prince Rupert is $23.849 million in '03-04, and then '04-05 it's $23.891 million. Prince George, '03-04 is $113.896 million; '04-05 is $112.956 million. Greater Victoria, $129.2 million in '03-04 and $128.8 million in '04-05; Gulf Islands, $14.131 million in '03-04 and $14.106 million in '04-05; Gold Trail district, $19.1 million in '03-04, $18.5 million in '04-05; Coast Mountains, $47.884 million in '03-04, $47.659 in '04-05; then Vancouver Island, $17.8 million in '03-04, and for '04-05 it's $17.284 million.

These are the numbers of schools that actually have fewer operating dollars than they had last year in spite of increased pressures that the government had put on them. These school districts will no doubt struggle even harder than some of the school districts that had an increase. But even those that had an increase, such as Vancouver…. I know that they're faced with a shortfall of somewhere between $9 million and $12 million for their budget this year, by way of an example.

These are the figures that are from the government in terms of the funding pressures. It's not for Victoria to micromanage, as the minister suggested last night,

where all the dollars should go, but I think it is the government's responsibility to fund education so that districts have the dollars and are able to provide the supportive environment that is needed for the development of children and for their educational purposes.

Hon. T. Christensen: I don't believe the member is wrong in the numbers as far as I could follow them as she read them out, but she's read out the figures in terms of a number of school districts. I think to be clear on the record — and this is all information that's already public; there's nothing that's new information here — let's talk about what's happened in terms of funding in every single school district, from the old '03-04 year, which will conclude in June, to the '04-05 year, which is the grants that include the increase in operating grants to those districts.

Certainly, if the member wishes, we can go through districts more closely to try and explain what's happened where a district has increased significantly or where it's decreased in terms of the overall operating funding. I can tell the member, though, that the vast majority of both increases and decreases, particularly on the more dramatic ones, are completely due to a change in the number of students that that particular district is providing an education to, particularly where the numbers are declining. Where the numbers are a significant increase, it's a combination of increasing enrolment, in some cases, and very much a consequence of increased funding from the province to the school district.

In school district 5, Southeast Kootenay, they will see a reduction this coming year of $365,000; In Rocky Mountain, school district 6, a reduction of $507,000; Kootenay Lake, which is school district 8, a reduction of $111,000; in Vernon, school district 22, an increase of $1.59 million; in Central Okanagan, an increase of $3.995 million; in Cariboo-Chilcotin, an increase of $1.184 million; in Quesnel a decrease of $31,000; in Chilliwack, an increase of $2.776 million; in Arrow Lakes, a decrease of $13,855; in Revelstoke, a decrease of $39,700; in Kootenay-Columbia, a decrease of $1.185 million; in Abbotsford, an increase of $4.175 million; in Langley, an increase of $3.911 million; in Surrey, an increase of $21.358 million; in Delta, an increase of $3.191 million; in Richmond, an increase of $3.285 million; in Vancouver, an increase of $10.179 million; in New Westminster, an increase of $1.451 million; in Burnaby, an increase of $6.026 million; in Maple Ridge, an increase of $3.050 million; in Coquitlam, an increase of $5.4 million; in North Vancouver, an increase of $562,000; in West Vancouver, an increase of $1.2 million; in Sunshine Coast, an increase of $605,000; Powell River, a reduction of $34,000; Howe Sound, an increase of $232,000; Central Coast, a decrease of $37,000; Haida Gwaii, a decrease of $175,000; Boundary, an increase of $124,000; Prince Rupert, an increase of $42,000; Okanagan-Similkameen, an increase of $80,000; Bulkley Valley, an increase of $264,000; Prince George, a decrease of $940,000; Nicola-Similkameen, an increase of $377,000; Peace River South, an increase of $183,000; Peace River North, an increase of $1.3 million; greater Victoria, a decrease of $379,000; Sooke, an increase of $2.2 million; Saanich, an increase of $1.4 million; Gulf Islands, a decrease of $25,000; Okanagan-Skaha, an increase of $811,000; Nanaimo-Ladysmith, an increase of $1.8 million; Qualicum, an increase of $995,000; Alberni, an increase of $65,000; Comox Valley, an increase of $952,000; Campbell River, an increase of $38,000; Kamloops-Thompson, an increase of $681,000; Gold Trail, a decrease of $519,000; Mission, an increase of $1.25 million; Fraser-Cascade, an increase of $427,000; Cowichan Valley, an increase of $1.2 million; Fort Nelson, an increase of $288,000; Coast Mountains, a decrease of $225,000; North Okanagan–Shuswap, an increase of $390,000; Vancouver Island West, an increase of $27,000; Vancouver Island North, a decrease of $538,000; Stikine, an increase of $101,000; Nechako Lakes, an increase of $986,000; Nisga'a, an increase of $124,000; and the Conseil Scolaire Francophone, an increase of $1.7 million.

Among those districts — in Vernon, Central Okanagan, Cariboo, Chilcotin and Abbotsford — the enrolment is actually down this year, yet because of the funding per pupil, the dollars overall are still up. The overall decline in enrolment this year is projected to be just under 9,000 students. Certainly, if the member has questions about any one of those districts, we will try to provide some additional information in terms of sort of how the end figure was arrived at.

J. Kwan: I do have some specific questions about some of the areas, and we'll get to that during these estimates. The point I want to make, though, is this: many of the school districts, and particularly the school districts that see a decrease, are actually from the rural communities. As we know, the economy in these rural communities is already hurting in a great way, and there are many, many challenges there.

School infrastructure, I would argue, is probably one of the most important things to keep communities whole, along with hospitals, courthouses, and the like. When you see decreases in funding in these school districts with increased pressure in costs, it means the school districts will be faced with even greater challenges as a result of the lack of funding in education for them.

Just a case in point to highlight it for the minister, there was an article on March 16, 2004, in the Times Colonist, and its headline was: "School Grants Up, But Trustees Say Costs Climb Faster." Let me quote a few statements from this article:

In the article the minister actually owned up to that notion, which I must say is a step forward in comparison to the previous minister, who simply wouldn't even acknowledge that the government had increased pressures for school boards.

Having said that, let me ask this question. The minister said that the first 2½ percent was funded with $50 million this year. There was an injection of $50 million. What about the next three years? Does the minister anticipate that the $50 million increase to school boards will carry through year to year?

Hon. T. Christensen: There are a number issues the member raised in her comments. I do want to comment briefly on the challenges that face some of our more rural school districts. They are facing, in some cases, difficult economic situations. Thankfully, as the economy of the province turns around, in many parts of the province that trend is starting to reverse. We're seeing increases in the number of jobs in many of our rural communities as the province turns around. That bodes well for those school districts.

This isn't my role, but part of the challenge there is that people aren't having as many kids. Even if they're moving there to work, they're not having as many kids, and that means there are not as many students to serve. Notwithstanding a rebound in the economy, you're still unfortunately faced with declining enrolment. We do recognize that, and we very specifically build into the funding formula…. It's a funding formula that is developed not unilaterally by Victoria but rather in conjunction with or through a technical review committee that certainly has strong representation from a number of school districts around the province, specifically so we can recognize the unique challenges that some school districts face.

The funding formula does build in a number of adjustments for unique geographic factors. That includes a supplement for rural schools. The funding formula in '04-05 has been adjusted a bit so that the determination of that rural school benefit won't be determined in terms of distance as the crow flies but rather on road distance, because that actually reflects how you get to school. Most of us don't fly to school, so that's certainly an appropriate adjustment. That's the type of adjustment that comes when you go out and consult with districts and say okay, what's working and what's not. I'm pleased the technical review committee is doing that work and making those recommendation back to government.

In that funding in terms of the declining enrolment in some of those school districts, we do have a strongly built-in buffer to ensure that school districts like Kootenay-Columbia that are facing a significant decline in enrolment from one year to the next actually don't get hit with the full force of that loss of the per-pupil funding. Rather, if their decline in enrolment is greater that 1 percent, they still get half of the per-pupil amount, even though that child or that student FTE actually isn't there.

We are trying to buffer those, but I do recognize that it does mean some challenges there as the world changes and as we see a shift in our demographics. I don't think any of us think those are easy challenges to address. We will continue — and I, certainly, as minister will continue — to listen to the challenges those districts present to us and try to ensure we're responding to those challenges in a way that helps those communities to move forward and to ensure they continue to be in a position to provide a very strong public education to the students they serve.

Unfortunately, what we tend to get stuck on is numbers. What I'm happy to report is if you get beyond the discussion of numbers and look at results, which at the end of the day…. Once we sit back and say: why are we here…? Why do we have a public education system? What's the goal of the public education system? Well, it's to educate children, to educate them well and to prepare them well for life. If we look at those results, we're doing a great job in this province, and we have a great deal to be proud of. I think we're recognized globally as a leading jurisdiction in public education. We continue to see that student achievement continues to improve.

I will continue to listen to school districts that present those pressures. The member this morning has referred to a number of figures she has. I don't know where those figures have specifically come from. I recognize they've come from different information that the member may have received, from the ministry or otherwise. If the member provides the figures to me, I'm happy to look at them and to have ministry staff look at them. Our own review of the situation after talking to school districts around the province is that by adding funding to the system, by increasing the grant this year by $50 million, it does account for those pressures.

The member, I know, has referred on a number of occasions to the teachers' salary pressure. For '04-05 that's simply not there. There's no question that pressure was there in '03-04 because there was a 2.5 percent increase that year, but in '04-05, the term of that collective agreement, there is no further increase. The government's mandate certainly has been in those negotiations that we're not in a position, at this point in our fiscal plan, to be funding further salary increases.

Moving forward, we're confident that districts, while they have some challenges, are in a position to

continue to meet the needs of students very well. Those districts that are finding they have strong challenges, I as minister and with ministry staff am more than happy to sit down and talk to them and work through those challenges, so we ensure collectively that we're continuing to meet students' needs.

J. Kwan: Just a couple of comments with respect to the economy. Let's just be clear in terms of how the economy is going. In the Vancouver Island and coast region we actually see an unemployment rate going up, from the 2001 average of 9.1 percent and an average of 8.7 percent in 2003, to 9.5 percent last month. The lower mainland–southwest region rate is the same; there's no change there. In the Kootenay community the unemployment rate is up from 9.6 percent in 2001, to 11.5 percent in 2003, to 13.3 percent just last month. In the north coast community the unemployment rate is at 13.4 percent, up from 10.9 percent in 2001 and 11.5 percent in 2003.

This gives you a sense of how we're doing in the economy. The communities that are struggling are actually worse off than they were in 2001, since this government took office. I know that part of the message box from government MLAs and ministers is to say that things are going well. They're not if you look at these numbers and look at the facts before you. On a national basis we actually see a situation where the unemployment rate for British Columbia has gone up by 0.6 percent to 7.9 percent overall. In fact, British Columbia has the largest employment loss in the country in this latest reporting, at 36,400 jobs lost. B.C. actually has the second-highest unemployment rate in the country.

Things are not as rosy as I know the ministers and the MLAs from the government side would like to paint them. The reality is that these communities are indeed struggling.

I think I also heard from the minister's answer that there is no commitment for the next three years in terms of the $50 million injection. As the minister had acknowledged, the increase is cumulative year after year, so there is no certainty there for school boards in terms of what would happen, although I did hear the minister say that he does not anticipate the salaries to increase in this round of bargaining. I'm assuming, then, that the minister is saying it is a zero percent increase for the teachers. I think that's what I had heard from the minister in terms of his answers.

Let me close with this in terms of the increased pressures and the calculation of the funding formula on a per-pupil basis, the impacts on communities with decreased education dollars, etc. Even in some cases, as I mentioned, where there is an increase in education dollars, the reality still remains that school boards are struggling. Vancouver is the one I know the most, because it's my own community. They are faced with a $9 million to $12 million shortfall, even with an increase in their education budget. That, of course, is in addition to the fact that they are faced with a $3 million cut in the Community LINK program, which comes out of the Ministry of Children and Family Development area. Pressures are definitely there, and there is mounting pressure with the increased costs that have been foisted on them.

Let's just say that we disagree on how the government sees the lay of the land and how the opposition sees the lay of the land.

I'd like to ask the minister, though…. Currently, B.C.'s funding formula is based on a per-pupil grant system. It has come to our attention that the deputy for the Ministry of Education is looking to hold a meeting of superintendents to discuss the possibility of changing the basis for allocating funding for secondary schools to one based on courses. Could the minister please comment on that? Is the funding formula under review?

Hon. T. Christensen: The member reminded me that I didn't actually answer her question in my last response in terms of the $50 million. The $50 million is there each year. It's not a one-timer. This year it's $3.875 billion. Then adding a further $20 million the next year, it'll be $3.895 billion that goes to districts in '05-06. We're projecting at this point that in '06-07 there'll be a further $150 million in that grant, which would put it up to $4.125 billion. None of it is one-time money. It's an increase to the grant and it's there. I just want to be clear on that.

In terms of the funding formula itself, it's something that's reviewed on an ongoing basis, somewhat at arm's length from government, by the technical review committee. That has ministry staff involved, but as I indicated before, a number of folks from school districts around the province are involved in that.

In terms of the concept of funding on a per-course basis, that's something the deputy minister raised at the Education Advisory Council, which is made up of education partners from throughout the system. It has very broad representation, actually, from throughout the system and also from the community at large. I know the B.C. Federation of Labour is represented there. I believe the B.C. Business Council is represented there. It's a broad-based group that's there to consider these sorts of ideas.

I believe, in the ministry, we're very fortunate that we have the deputy we do and that he's continually thinking about new ideas in terms of how the education system can better serve students through the province. I'm pleased the idea has been brought up, and it'll be discussed by a small group of superintendents, so we will know whether it has any merit or not. The day we stop bringing up new ideas is the day society starts going backwards pretty quick — or certainly stands still.

I certainly encourage and will continue to encourage ministry staff to come forward with new ideas they think have merit and get them out there for consultation so that we know what benefits there might be from a particular idea and what the downside of an idea is. Then government, based on that discussion, can make

J. Kwan: I would agree that new ideas are necessary. I'm not actually passing judgment one way or the other on the formula. I just heard this, and I wondered whether or not it is going on, and I asked the minister to shed some light on that.

On the issue of new ideas, I must say, though, that the Liberal government has actually brought forward some, I suppose, what the government deems to be new ideas. Instead of bringing us forward, it actually has, I would argue, brought us backwards, never mind standing still at the same place.

One example would be child labour laws. Some of the provisions that have been brought forward for child labour in this province under this government have set us back decades in terms of rights for children. Anyway, that's not the debate for this set of estimates, but I certainly would highlight some of the areas in which the government did not move us forward, and that's unfortunate. It also impacts children, unfortunately, in those instances.

The minister says that yes, there is a group of superintendents meeting and there's a variety of representatives about the review of funding formulas — a technical committee, as the minister calls them. Who is involved in this committee?

Hon. T. Christensen: The review committee consists of our director of funding, Mr. Miller, and some other staff from his department in terms of assessing what different proposals actually mean when you put dollars to them. There are also three superintendents from around the province on that committee, as well as three secretary-treasurers, who are certainly intimately familiar with what the dollars mean when they hit the ground in a district. I can provide you with the names of the districts, or I could probably provide you with the names of the individuals, if that's what you'd like.

J. Kwan: The districts I'm particularly interested in…. Yes, please provide that information, just so I know.

Hon. T. Christensen: The three superintendents, and they're put forward by the superintendents association, are: Dick Chambers from Prince George — I think prior to being in Prince George, Dick was down in Kootenay-Columbia, and he's been in Stikine as well, so he obviously has broad experience in terms of different districts around the province; Anne Cooper, who is in Revelstoke; and Sheila Roone, who is in Burnaby. This is good representation, actually, in terms of different types of districts around the province — an urban district in terms of Burnaby; Prince George is sort of an urban district with a bit of rural area, but one that has had some significant declining enrolment challenges; and Anne Cooper from Revelstoke, which is a relatively rural community.

From the secretary-treasurers — and again, these three are put forward by their association — we have Greg Frank from Burnaby, Frank Regehr from Okanagan-Skaha and Sterling Olson from Nechako. Again, a pretty good representation, and my assumption is that those associations — the superintendent's association and the secretary-treasurers association — when they put forward the names, try and find a pretty broad representation from around the province.

We're certainly thankful for the dedication of these individuals in taking on this, I suspect, somewhat thankless task of being involved with the technical review committee and looking at these difficult issues of how we can ensure that we're funding equitably around the province.

J. Kwan: Were these the same people that formulated the last funding formula change?

Hon. T. Christensen: I assume the member's referring to the sort of significant shift in the funding formula. It does change a little bit on a year-to-year basis. The significant shift in 2001-02 evolved through work done by the ministry, which was then taken to the technical review committee for feedback on both the pros and cons in terms of what the work the ministry had done was. It was then discussed, and we moved forward with it.

I don't have the specific names of who was on the technical review committee from among the superintendents and secretary-treasurers at that time. I can certainly get that information for the member. The technical review committee does change a little bit each year depending on whether the superintendents and the secretary-treasurers put forward the same people or not. We can certainly obtain that information for the member if she wishes.

J. Kwan: Yes, I would appreciate that information at a later time from the minister.

Back to the funding formula question. At this time, it's the technical committee who's reviewing the funding formula. Is the review on secondary schools of a funding formula based on courses? Is that what's being undertaken?

Hon. T. Christensen: No. The idea of potentially funding by course isn't something that's at the technical review committee; it's something that the ministry has taken forward to the Education Advisory Council. Just so the member knows, as I said before, the advisory council is actually made up of a broad, broad base of interests that include school trustees, students, parents, teachers, the B.C. Federation of Labour, the Business Council, deans of education, principals and vice-principals. We may be missing one or two there. It is broad-based in terms of people that have both a direct involvement with the education system and also those who have a critical interest in the education system in terms of what's happening there.

The idea has been brought forward to them. Really, the purpose of the discussion is to try and determine how we ensure that students in secondary school who are at a point in their schooling when they want to be able to choose their subject areas and they want to perhaps focus in one particular area…. How do we enable them to have those choices? They may find that the school they take most of their classes at doesn't offer all the courses they want. They may want to take one at the school across town. How do we enable them to do that?

In a large urban area where you have a number of districts, they may be in a position to take a course in the Vancouver school district and another one in the Richmond school district. Is that something that we can facilitate so that we're meeting the needs of that student and helping him or her to obtain the best education based on what they're trying to achieve with their own education?

It's certainly an idea in its relative infancy, but we do want to be looking at those opportunities to give students those choices. This is one of the ideas that have come forward to do that. I think we're all looking forward to some of the feedback that we get at EAC in terms of the general idea and, certainly, the feedback we get from superintendents.

J. Kwan: The funding formula change could then come from within the ministry, aside from the technical committee. That's what I'm gathering from the minister's answer.

I'll flag for the minister, though…. I don't have the full details around this, other than just to have a very limited understanding of what is being looked at. Just off the top of my head I can offer these comments for the minister.

It sounds as though funding by course instead of per pupil certainly is being portrayed by the minister as providing more choice and flexibility to meet the students' needs. Of course, the previous minister had an entirely different understanding of what choice and flexibility mean, as the former minister had put forward when she used those words. Quite frankly, it's not at all that positive.

There can be serious implications with this kind of funding formula in that students, for example, who have a spare period…. I remember that when I was in high school, I had a spare period.

J. Kwan: That's true. I worked on my schedule, and I managed to get a spare period on a semester basis, in both semesters in my senior years, and I loved it. That could have implications because spare periods, presumably, if they're funded by course, then would be not be funded on that basis. Generally, this could have a view of a voucher system, if you will. The money is only allocated to the courses that the student chooses. I worry that you could actually have problems arising from that on that basis, and there are a series of problems. This is just a very preliminary look into this issue.

It also raises the question, and I don't know whether or not the ministry is looking at this kind of thing. What if a company was to offer a specific course, as an example? Could they pay for a course? Is that something the ministry is contemplating? If that's the case, if a company offers to pay for a particular course, would that course, chosen by their student, still be funded, as an example? It can get very complicated and messy and also take it in a direction of privatization, really — for the curriculum to be driven by companies, as one example.

I'd like to get the minister's comments on that. Is the ministry looking at allowing companies to offer funding courses?

Hon. T. Christensen: The idea here is to do the best we can to meet student needs. It certainly is an extension and, I would suggest, if it can work, an improvement on the concept of choice for students.

I know the experience I've had in talking with parents and students around the province so far is that they're quite pleased with the government's move to encourage school districts to offer more choice. I know in my own community we are fortunate to now have a late French immersion, which is something that parents have been calling for, for a number of years, to complement the very successful early French immersion curriculum.

We also now have a Montessori school. Those are both initiatives that the school district has undertaken in direct response to parents' requests for additional choice. There is a broad range of examples around the province of where school districts are responding to parents' requests for a broader range of options for their students. In some cases that's just the addition of a number of courses. In some cases that's a move to a certain type of school, whether it's a traditional school, a Montessori school or a fine arts school.

From my perspective as minister, the move towards choices has been very successful so far, and we'd like to build on that. We are certainly finding that parents who have the opportunity to give a little more direction to the type of programming they want available for their students tend to be more involved in their students' education, and we know from a broad base of research that that improves student achievement.

Also, as students get a little older, perhaps mom and dad aren't playing as big a role, and they're making a lot more of those decisions themselves. If they're able to pursue programs, including courses that spark their interest, they're also more likely to achieve. We're quite pleased with the results of the direction around choice.

I agree with the member that a move to funding by course would be a dramatic change from the current funding model and that it would have significant implications for school districts, particularly where those school districts neighbour one another so that there is

the opportunity to be a student of more than one district at the same time. There's no question that we've got to take a very hard look at this, and it's not something that you embark on without a good deal of review and a good deal of discussion among the stakeholders in the education sector. That's what we've initiated — that discussion.

We're not, I don't think, signalling a dramatic and immediate shift. We're not doing that at all. We're saying that our goal here is to make a student's education as relevant to that student as we possibly can — so the student is excited about being involved in their educational program, so they'll excel. We think that giving them the option to pursue courses as the student chooses would complement the desire to ensure that students are excited about their education and that funding by course would assist that process.

I agree with the member that there are a great number of factors to consider. I certainly don't claim for a moment to be aware of all those factors, and I don't believe anybody in the ministry would claim to be aware of all factors. The reason we're going out and wanting to have these discussions with superintendents and with others is to look at the potential implications, both pro and con. Then we can make an intelligent decision.

J. Kwan: We also heard that the deputy is planning to host a small group of eight to ten superintendents. Is this the committee that would be meeting with the deputy, or is it some other invitation? We understand that it's a one-day session in Vancouver in April to discuss the implication for the school system and that superintendents are asked to reply by tomorrow. That's what we understand. Is that still in the works? Or is that part of the technical committee's work?

Hon. T. Christensen: The initial intent is to try and arrange a meeting with a small number of superintendents to try and flesh the idea out a bit. From there, depending on what the reception is there and what people think, the idea would be to then move beyond that small group and meet with other small groups so that it's a good interactive discussion and eventually, certainly, go to EAC and have that broader discussion around the idea. It really is a novel idea, so it's something that I believe needs to be fleshed out a bit. We think superintendents, given their familiarity with the whole of the operation of their school district, both from a financial standpoint and also from meeting students' needs and a student achievement standpoint, are probably a good starting point in terms of that discussion.

J. Kwan: I'm mindful of the time as well, so before I carry on in discussion around this…. I just received a message, and I should put this on the record for the minister's information. My understanding is that yesterday in the estimates process, the member for Delta North and the minister were discussing school planning councils. The minister said, and I quote from Hansard: "There has been, as a reaction, unfortunately…. When they were first created, I understand that in some school districts the BCTF was encouraging teachers not to participate in the school planning councils. I think that's unfortunate. I think teachers have a very strong voice to provide at the school planning council table, and I think that's been borne out by school planning councils that have strong teacher representation."

The BCTF takes issue with this comment. In fact, here's the information they have provided to correct the record. The minister could also anticipate that the minister would receive a letter from the BCTF on this, copied to all the MLAs, asking for correction in this statement. They identified a couple of locals who have not been participating, but to be clear, they have had a policy on record, the BCTF, from the beginning that teachers should be participating. In the beginning they were also joined by the ministry and other stakeholders in planning and facilitating a symposium on school planning councils. They intend to advise that the SAEE survey on school planning councils that the minister had referred to had only 56 responses. Also, they had done their own survey on the school planning councils, which had close to 700 responses, with many very constructive and positive comments.

They are very supportive of their members in their participation at school planning councils. They provide them with resource binders, workshops, regular updates on issues, etc., to maximize the benefits for all concerned. That's just something that I want to put on record. As people are monitoring Hansard for the debate and so on, they take issue when misrepresentation has been provided to the House.

Hon. T. Christensen: Thanks to the member for clarifying that. I apologize for that mistake. It had been my understanding — and perhaps that's because of some correspondence or something I had seen from a couple of the different locals — that they weren't supportive of school planning councils. I'm very pleased to hear that the BCTF is supportive of school planning councils. Perhaps it's something, when I next meet with the BCTF — which should be sometime in the next couple of months — we can follow up on in terms of how they see those councils working well. I'm pleased, as well, that they've been gathering some feedback on them, and it sounds like that feedback is positive. Certainly, we can have a constructive discussion around the role of school planning councils and how they are working well in the province.

J. Kwan: Yes, with that, I'm sure that the BCTF would appreciate the minister's retraction of that statement and the apology. I'm sure that they will be in contact with the minister about this issue.

With that, I note the time. I move that Committee A rise, report progress and ask leave to sit again.

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