Hansard -- Monday, April 26, 2004 p.m. -- Vol. 24, No. 4 (HTML)


CONTENTS

	Routine Proceedings
		Page

Introductions by Members		10425

Tributes		10425
	Ernie Burnett
	V. Roddick

Introductions by Members		10425

Introduction and First Reading of Bills		10425
	College and Institute Amendment Act, 2004 (Bill 26)
	Hon. S. Bond
	Agricultural Land Commission Amendment Act, 2004 (Bill 27)
	Hon. G. Abbott
	Forests Statutes Amendment Act, 2004 (Bill 33)
	Hon. M. de Jong
	Provincial Revenue Statutes Amendment Act, 2004 (Bill 34)
	Hon. R. Thorpe

Statements (Standing Order 25B)		10427
	Second-language programs in B.C.
	R. Lee
	Legislative internship programs
	K. Krueger
	Forest fire control and prevention
	B. Bennett

Oral Questions		10428
	Employment transition services for sex trade workers
	J. MacPhail
	Hon. S. Hagen
	Studio program for at-risk youth
	J. Kwan
	Hon. S. Hagen
	Skilled labour shortage
	H. Bloy
	Hon. S. Bond
	B.C. Rail–first nations benefits trust
	P. Nettleton
	Hon. G. Plant
	Marijuana grow operations in rental housing
	R. Stewart
	Hon. R. Coleman

Second Reading of Bills		10431
	Coal Act (Bill 28)
	Hon. P. Bell
	B. Bennett
	D. MacKay
	B. Lekstrom
	Hon. P. Bell

Committee of the Whole House		10436
	Vancouver Tourism Levy Enabling Act (Bill 14)
	Hon. J. Les
	T. Nebbeling
	J. Kwan

Report and Third Reading of Bills		10441
	Vancouver Tourism Levy Enabling Act (Bill 14)

Committee of the Whole House		10441
	Motor Dealer Amendment Act, 2004 (Bill 24)
	B. Lekstrom
	Hon. J. Les

Report and Third Reading of Bills		10442
	Motor Dealer Amendment Act, 2004 (Bill 24)

Committee of Supply		10442
	Estimates: Ministry of Community, Aboriginal and Women's Services (continued)
	J. Kwan
	Hon. M. Coell

Proceedings in the Douglas Fir Room

Committee of Supply		10468
	Estimates: Ministry of Transportation
	Hon. K. Falcon
	J. MacPhail

Hon. J. Les: On behalf of my colleague the member for Chilliwack-Kent, I am pleased to introduce to the House this afternoon 21 grade 12 students from the Mount Cheam Christian School in Chilliwack. They are here to observe the Legislature today and, hopefully, leave at the end of today slightly more educated and impressed with how the Legislature works. They are here with their principal, Mr. Adrian Stoutjesdyk, and three other chaperons. Would the House please make them welcome.

Hon. P. Bell: It's a real pleasure today to introduce to the House my administrative assistant, who is normally very capable, competent and fast. However, yesterday she tried to take part in the Times Colonist 10K run, and things are happening somewhat slower around the office today. I would ask that the House please make Melanie Hughes very welcome.

P. Wong: In the gallery today we have a group of nine visitors. They are the senior government officials from the Guangdong provincial government pursuing a one-year MBA degree at the UBC Sauder school of business. The group members are Huazhong Lu, general manager and professor, Technological Development Co., South China Agricultural University; Wenping Huang, division chief, the Standing Committee of the People's Congress of Guangdong Province; Liansheng Liu, dean of the insurance faculty, Guangzhou College of Finance; Dehao Li, director and associate professor, department of science and technology, Maoming University; Chaoqiu Liu, associate professor, head of Education Technology Centre, Guangdong Radio and TV University; Xiaosheng Wu, deputy department chief, education and culture department, overseas Chinese affairs office of Guangdong Province; Jian Zhang, public procurator, deputy director of legal policy research office, the People's Procuratorate of Guangdong Province; Shiwen Luo, deputy executive, People's Government of Lianping County, Guangdong Province; and finally, Haohai Chen, deputy dean, department of foreign languages, Guangdong Polytechnic Normal University. Would the House please make them most welcome.

V. Roddick: I rise today in sadness, yet celebration — celebration of a life well lived. Ernie Burnett, alderman and mayor of Delta from 1979 to 1987, died peacefully at Delta Hospital on Saturday evening. Ernie was a man who not only gave selflessly to his community but also had an enormous respect for public office and all that it entails. His belief in and support of public service consistently contributed to the betterment of Delta and, subsequently, our province. We give thanks to his families for so graciously sharing him with us over the years, and I ask that this House join me in giving Ernie Burnett a well-earned round of recognition and appreciation.

Hon. T. Christensen: It's my pleasure to introduce four constituents of the member for Powell River–Sunshine Coast. These are four students in that area. What makes them exceptional students is that they are all mothers as well. Would the House please join me in welcoming students Amanda Mason, Frances Raci, Chelcea Devlin and Amanda Rogers. They are accompanied by their youth care outreach worker Debbie van Dok and their teacher, Terri Thompson. Would the House please make them all welcome.

J. Kwan: Visiting us today is Linda Irvine. She is a high school teacher-librarian in Nanaimo, and she is here in Victoria today on a pro-D day. She is also the mother of our very able intern, Sara Irvine. Accompanying Linda, as well, is her other daughter, Melanie. Would the House please make them welcome.

J. Bray: Hazel Mitchell, who works in the Premier's office, advised me that joining us in the House today is her father, John Mitchell, who is actually a constituent of mine, as well as her brother David Mitchell.

Also joining us in the gallery today is a visitor from England, Anne Cason. Hazel wanted me to make it very clear that not only is Anne a tourist here to Victoria for the next six weeks, but she is also Hazel Mitchell's nana. I would ask that the House please make them all very welcome.

Hon. R. Thorpe: After working for seven years in the legislative building, a key member of my office staff, Caroline Mawbey, is joining the House to see it live for the first time. Would the House please make Caroline very welcome.

Hon. S. Bond presented a message from His Honour the Administrator: a bill intituled College and Institute Amendment Act, 2004.

Hon. S. Bond: Two statutes currently govern public colleges, university colleges and institutes in British

Columbia: the College and Institute Act, which governs colleges, university colleges and provincial institutes; and the Institute of Technology Act, which governs the British Columbia Institute of Technology.

This year the British Columbia Institute of Technology celebrates its fortieth anniversary as a unique and integral part of B.C.'s post-secondary education system. It has been a truly remarkable journey for the institution, growing from a single campus in Burnaby in 1964 to a world-class polytechnic institution boasting five campuses, 12 satellite locations around British Columbia and more than 48,000 students.

As part of a larger review of B.C.'s public post-secondary system legislation, it was determined that there was some overlap between the Institute of Technology Act and the College and Institute Act. BCIT has been consulted during the legislative review. These amendments will not substantially affect its operations, and BCIT supports their passage.

Amendments introduced today under the College and Institute Amendment Act, 2004, will repeal the Institute of Technology Act and place BCIT under the College and Institute Act to eliminate unnecessary duplication that currently exists between the two acts. At the same time, the College and Institute Act will be amended to streamline public post-secondary education legislation, clarify the discretionary powers of boards and provide them with the autonomy and flexibility that better reflect their roles and range of responsibilities, and formalize recognition of BCIT's unique role and mandate as a public polytechnic institution.

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

Bill 26 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. G. Abbott presented a message from His Honour the Administrator: a bill intituled Agricultural Land Commission Amendment Act, 2004.

Hon. G. Abbott: I am pleased to introduce Bill 27, the Agricultural Land Commission Amendment Act. This bill reflects government's commitment to expedite treaty settlements with first nations. Amendments to the Agricultural Land Commission Act enable first nations who are involved in treaty negotiations or who have signed treaties to apply directly to the Agricultural Land Commission to change land uses of treaty settlement lands within the agricultural land reserve. Currently, first nations are required to obtain the approval of local governments before applying to the Agricultural Land Commission.

These amendments will facilitate treaty negotiations by enabling first nations to determine with certainty the land use restrictions for potential treaty settlement lands. Having a clear insight into what activities can occur on those lands will provide first nations with important information before they decide whether to ratify a treaty package. Post-treaty, first nations will have the same abilities and obligations as local governments for the purposes of making agricultural land reserve applications on lands within their treaty settlement lands. First nations will be required to provide public notice and, where required by the regulation, to hold a public hearing for proposed changes within the agricultural land reserve. These obligations are similar to those that apply to local governments and landowners currently.

Treaty settlements will encourage investment within the province by providing greater land use certainty and will contribute to the economic well-being of first nations and all British Columbians. I am pleased to present this bill in the House today.

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

Bill 27 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. M. de Jong presented a message from Her Honour the Lieutenant-Governor: a bill intituled Forests Statutes Amendment Act, 2004.

Hon. M. de Jong: Bill 33 is the Forests Statutes Amendment Act, 2004. The bill makes amendments — many of them housekeeping in nature, but several substantive amendments — to the Forest Act, the Forest and Range Practices Act, and the Forestry Revitalization Act.

Some of those amendments include amendments which speak to successorship rights of contractors and subcontractors where tenure transfers are involved and the conditions under which parties to those transfers may contract to waive replaceability. The compensation provisions of the Forest Act — in particular, section 60 and part 13 — and the Forestry Revitalization Act have been harmonized to provide a consistent means across those acts to fairly compensate licensees for government actions that affect their rights. As well, this legislation makes amendments to the Forest and

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

Bill 33 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. R. Thorpe presented a message from Her Honour the Lieutenant-Governor: a bill intituled Provincial Revenue Statutes Amendment Act, 2004.

Hon. R. Thorpe: I move that Bill 34 be introduced and read a first time now.

Hon. R. Thorpe: Bill 34 proposes a number of amendments to the taxation and revenue statutes administered by the Ministry of Provincial Revenue. These amendments are proposed to ensure fairness, equity and clarification for taxpayers, to provide efficiencies in the tax administration and revenue collection process, and to align the provincial income tax provisions with those of the federal Income Tax Act.

The bill proposes amendments to 12 acts: the Corporation Capital Tax Act, Hotel Room Tax Act, Income Tax Act, Land Tax Deferment Act, Logging Tax Act, Mineral Land Tax Act, Mineral Tax Act, Motor Fuel Tax Act, Property Transfer Tax Act, Social Service Tax Act, Taxation (Rural Area) Act and Tobacco Tax Act. I will elaborate on the nature of these amendments during second reading of this bill.

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

Bill 34 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

R. Lee: Yesterday I had the opportunity to attend the annual general meeting of the British Columbia Heritage Language Association. This organization represents over 150 organized language programs in British Columbia which offer instruction in international language education — languages other than English or French. More than 35,000 students are currently enrolled in international language programs across British Columbia. Over 1,000 instructors are involved in teaching these languages in our community.

With the 2010 Winter Olympics on the horizon, we are once again preparing to welcome the world to our beautiful province. Isn't it nice that British Columbians can give our visitors a warm welcome by conversing in their own languages? In fact, our youth are learning many languages in our community, including Amharic, Armenian, Mandarin, Cantonese, Dari and Pashto, Farsi, German, Greek, Hebrew, Italian, Japanese, Khmer, Korean, Kurdish, Nepali, Persian, Polish, Portuguese, Punjabi, Sinhalese, Spanish, Swedish, Tagalog, Tamil, Fanti, Ewe, Ukrainian and Vietnamese.

International language education programs provide young people with opportunity not only in learning a communication skill but also in intellectual, social and cultural development. Many governments recognize the advantages of a multilingual population in economic development and the importance of second-language education. Alberta has just confirmed its commitment through a provincial education policy that mandates second-language education for all students from grade 4 to grade 9.

British Columbians must rise to accept this challenge. I believe that we already have the advantage of a large multilingual population. All we need to do is expand on this advantage by implementing a strong second-language program in our school system as well as supporting the community-based language education programs.

K. Krueger: Today I have the privilege of acknowledging two nationally renowned internship programs. One we have right here in B.C.; the other is a few hours south, in Olympia, Washington. Many of our colleagues were themselves part of the provincial internship program at the genesis of their careers in the public service. The Minister of Sustainable Resource Management, the member for Chilliwack-Kent, Richard Overgaard, Martyn Brown, Tom Syer, Jessie McDonald, Jay Schlosar, Sarah Bonner, Jennifer Erickson, Milan Pavlic, Robert Parker, Jonathan Fershau, Jerry Muir and Marc Coward all benefited tremendously from the experiences and opportunities afforded to them by the program and draw on those in their service to British Columbians while working here in the Legislature.

Established in January '76 by the three major universities in B.C. at the time, the current program is now advised by four of the outstanding universities in B.C. — UBC, SFU, UVic and UNBC. Our six-month internship program offers an opportunity to university grads to supplement their academic training by observing the daily workings of the Legislature firsthand and to provide MLAs with additional assistance during the parliamentary session. With a six-week stint in a provincial ministry, lectures by independent officers and political figures, week-long visits to the constituency offices of MLAs, and educational trips and caucus as-

signments to either the government or the opposition, our program provides ten bright young minds with a unique perspective of the Westminster system at work.

As part of the program exchange at the end of February, the B.C. interns were hosted in Washington by the interns in Olympia, a number of whom are visiting us today. I understand our interns were made to feel very welcome as both the Washington State Senate and the House of Representatives passed resolutions in their honour. Every year 60 Washington State undergrad interns go to Olympia during the winter quarter or spring semester to work with staff and members of the Washington State House of Representatives or Senate. The Washington internship is a widely respected program for American university students.

Educating youth and preparing them for the future is a meaningful undertaking for any government. We are pleased to share this common goal with our neighbours, as we also share a myriad of aspirations and objectives. I wish to thank Karen Aitken and Jennifer Horvath of B.C. and Judy Best and Joan Elgee, the Washington State intern program coordinators. These internships would not be possible without their contributions.

Would the House please join me in recognizing these programs and the work of coordinators and the interns with us, both past and present.

B. Bennett: When setting up the Filmon review, the Premier committed government to a no-holds-barred review of the 2003 fires. I personally took Mr. Filmon out to show him the buildup of fuels in our Rocky Mountain Trench forests. Mr. Filmon subsequently made various recommendations, and the Premier has said that we will meet all 42 recommendations.

One of Mr. Filmon's key recommendations is to do more prescribed burning to safeguard our communities. We should remember that it took many decades of fire suppression to create the challenge of too much fuel in our forests and that the remedy will not be completed in one season. I am happy to report that in the Rocky Mountain forest district this spring, we did more prescribed burning than at any time in history and probably set a provincial record — over 3,000 hectares burned. This isn't cheap. One series of four burns of 484 hectares cost $72,355. Another series of three burns of only 286 hectares cost $71,780. On one day the local Forest Service personnel, under the very capable supervision of Greg Anderson, safely burned nine square kilometres, which is a one-day record and an awesome accomplishment for the Forest Service in the Cranbrook office and all their contract workers and certified volunteers.

But while this controlled burning will reduce the risk of wildfires, the public must be vigilant. A disturbing story is emerging out of Cranbrook. Police are investigating an arsonist who is deliberately starting bush fires in the interface between the community and the forest, and if he's not stopped, these fires could result in the awful devastation we saw in areas of the province last year. Most of this spring's forest fires have been caused by people, not nature — though most, no doubt, were accidents.

We are heading into what looks like another very dangerous fire season. It's important to remember that fire prevention and fire safety are everyone's responsibility. Homeowners in the interface should be taking action now to protect their homes and their properties. Please, let's all be careful with fire — more careful with fire than we were last season. Let any forest fires we have in 2004 be caused by nature, not people.

J. MacPhail: According to a confidential question-and-answer document prepared for the Minister of Human Resources, British Columbians with mental health conditions and serious drug problems that interfere with their ability to search for and accept employment will have their benefits taken away if they don't look for work. The minister says it's all about helping people. He's writing letters to the editor to tell everybody to stand down and not worry.

But he doesn't mention that his government is closing doors on innovative programs designed to get young people — many who have drug, alcohol and mental health problems — off the street. At the end of April, WISH, a non-profit society on the downtown east side, is losing a $125,000 provincial grant to provide pre-employment programs for sex trade workers, many of whom have mental health and addiction issues. To the Minister of Human Resources: how can he justify cutting employment programs that get people off the street and into school, into work, when the government is demanding that they look for work as a condition of receiving assistance?

Hon. S. Hagen: I'd like to point out to the member that since the Gordon Campbell government was sworn in on June 5, 2001, this government has spent $300 million on job training programs for various individuals.

In the meetings that I've had with advocacy groups and other groups, they make it very clear to me that the people they represent actually do want to become engaged in the community. They want to be trained and they want to work. Research is clear that for people with temporary mental illness or an addiction issue, being involved in an employment program is very helpful to them.

With regard to the specific issue that the member questioned about, that particular group was duplicating services offered by another group. We fund PEERS in Vancouver, who are able to take up….

Hon. S. Hagen: I have met with PEERS, as a matter of fact. They are going to be able to deliver the programs that are necessary for those clients.

J. MacPhail: That shows just how out of touch this Minister of Human Resources is with the answer he just gave. WISH does not compete and is not a duplication of PEERS at all. In fact, WISH has been a very successful downtown east side program supported by a wide range of governments, including Social Credit governments and NDP governments, and this government just cancelled its pre-employment program. They claim they want to help people get jobs, but they're taking away the supports to help people get the life skills and confidence they need to find and maintain employment.

According to ministry officials, this minister's officials, the B.C. Liberals have decided that funding drop-in centres for at-risk youth is no longer a priority — their own briefing documents. The government's guidelines for funding say that community-based outreach programs for high-risk youth should get minor emphasis. Apparently, programs that focus on outreach and prevention are no longer worthy of government support.

J. MacPhail: To the Minister of Human Resources: can he confirm that drop-in centres for at-risk youth are getting the axe, and can he tell us how much this mean-spirited move is adding to the government's bottom line so that it can pay for its failed high-income tax cut?

Hon. S. Hagen: I can tell the member opposite one thing and one thing for sure. This government is not going to give up on the people who need the help the most just because they have some barriers. Our programs are put in place not just…

Hon. S. Hagen: …to spend money. They're actually put in place to achieve results. We actually want to help those people achieve their potential. Every human being out there has potential. We want to make sure that our clients, particularly, are able to reach that potential through the programs that we have.

I know the member is pretty focused on Vancouver. I'd like to remind her that we just announced a $3.25 million Vancouver agreement, which is going to deliver some of those services as well. However, having said that, the program that she's talking about was a duplication of a program that we are presently funding.

J. Kwan: The minister and this government are cutting programs that are successful and that help people in the community, and the minister knows it. Let me give the minister another example. For 17 years the Studio has been helping some of Vancouver's most vulnerable and troubled young people get their lives together. For these young people, the Studio is a lifeline providing a safe, caring atmosphere away from a hard life on the streets of the downtown east side. For many, the Studio is the difference between a life on the streets and a life of learning, work and opportunity. The program costs the province $60,000 a year, but the Premier has cut the funding, and now the Studio may have to close its doors.

To the Minister of Human Resources: what is wrong with the Premier's priorities when he happily spends $600 million on a highway to Whistler but won't spend $60,000 to help youth find a way off the streets?

Hon. S. Hagen: I want to say to the member opposite and to all of the people of this province: nobody cares about the people in this province more than the Premier.

The member opposite is focused strictly on dollars of expenditures. We're actually focused on outcome. We're focused on how people's lives can be changed for the better. I was at a graduation ceremony this morning out at Camosun College on a job-track program. Thirty people took that program, have graduated and are now looking forward to being in the workforce. They had three people there who graduated from the program prior to this, who gave testimonials about how their lives had been changed for the better because of these programs.

We examined every program to make sure that the program is delivering what it's intended to deliver. In the case of this one, it was duplication.

Mr. Speaker: The member for Vancouver–Mount Pleasant has another question.

J. Kwan: The minister is completely out of touch. The Studio has been successful for 17 years and has lived through several administrations. Why? Because it provides much-needed programs for youth at risk. The

cost to fund the Studio is less than half of one deputy minister's salary. It is less than the cost to taxpayers to keep Bob Virk on staff until the police concludes the investigation into the B.C. Rail raid. The Studio, the Picasso Cafe and other innovative, successful programs are closing their doors because this Liberal government can't see the value in giving hope to at-risk people.

I ask the Premier. These programs are critical. We cannot afford to lose them. On behalf of the young people, will the Premier today announce that he…?

J. Kwan: To the Premier, on behalf of the young people: will the Premier announce today that he is reversing this government's mean-spirited cuts to drop-in centres as a first step — restore the $60,000 funding to the Studio so that it can keep its doors open to at-risk youth?

Hon. S. Hagen: I would ask the member opposite: what is wrong with an expenditure of $300 million, since we became government, to help people change their lives for the better? What's wrong with designing programs that really work for people, where there's a positive outcome, where people's lives are changed for the better? This government is committed to make sure that the programs that are delivered are actually producing results that will work for the people who are the clients of this ministry.

H. Bloy: My question today is to the Minister of Advanced Education. There have been many reports to date from the construction industry about the looming shortage of skilled workers in this province. The construction sector will need thousands of jobs to complete the Olympic projects between now and 2010, and in my riding of Burquitlam there are many projects going on that will require additional workers. But I consider this a good-news question. It certainly shows that the financial direction that the Premier of this province has put us in is working. We are creating jobs.

H. Bloy: However, with this good news, can the minister please tell us what she's doing to ensure that we'll be able to attract and train enough workers?

Hon. S. Bond: Well, the good news is that there is a boom in terms of building and particularly in housing starts in British Columbia. We have a plan to be able to begin to deal with the shortage of workers in this province. In fact, the Industry Training Authority is working hard to create a system that's responsive and reacts quickly. In fact, we have a plan in place to see an increase in workers of 30 percent over the next three years.

The great news is that our numbers are up. In fact, we have institutions creating new sections all the time. Just recently we invested an additional $800,000 to reduce wait-lists so we can accommodate the number of apprentices that are registering in our programs. We're on our way to meeting the needs that are evident in the province.

P. Nettleton: Surprise, surprise. First nations are now responding to the discovery that they've been manipulated by this government, in particular by the Attorney General, into accepting piecemeal the benefits trust fund, not realizing that it was falsely being tied into the promotion and validation of the B.C. Rail sale. Now the Attorney General and the Premier have pushed aside the Minister of Transportation in order to defend the indefensible.

Today's opinion piece released by the Attorney General on this issue is not disclosure but misinformation. Even before this release was out, a growing list of first nations were withdrawing from the rail benefits trust initiative. This included the Tl'atz'en nation, who in a letter to the AG dated April 22, 2004, stated: "Until full and complete disclosure of the agreement and the opportunity to understand the implications of the sale, we formally withdraw our support to the benefit trust fund."

P. Nettleton: My question is to the Attorney General. How long will the AG and this government continue this subterfuge and backward dance with the truth? When will this government lay all the cards on the table, come clean and deal honestly with first nations and indeed…?

P. Nettleton: You know, the laughter on the government side of the House….

Hon. G. Plant: I am confident that every member on this side of the House could get up and speak passionately about the work that we've done as a government to improve the lives of aboriginal people in British Columbia and about the opportunity presented by

the first nations–B.C. Rail benefits trust proposal to put $15 million into 25 different first nations communities. We have been consistent throughout. Back in February, when I wrote to the 25 first nations, I said quite clearly that the trust does not involve aboriginal rights and title and related consultation and accommodation. Participation in the $15 million trust will not have any conditions related to assertions of rights and title. We've been clear from the outset that this is an opportunity for first nations. I am confident that the majority, if not nearly all, of the 25 first nations will participate in the opportunity presented to them — more good news for rural British Columbians.

R. Stewart: My question is to the Minister of Public Safety and Solicitor General. In my riding the city of Coquitlam, along with a number of other municipalities in the lower mainland, has introduced bylaws that impose upon property owners the duty to ensure that their rental homes do not become grow ops. I own a rental property, and as the minister no doubt knows, the task of a landlord to monitor a property to keep it free of illegal activity is very difficult. What is this government doing to assist property owners in identifying grow ops?

Hon. R. Coleman: On January 1 we brought in a new Residential Tenancy Act in this province, which allows a landlord, without arbitration, to inspect their property once a month if they have a rental property. That's a huge breakthrough for that community, because obviously it takes more than a month to grow a grow op. We also gave them the power to evict for illegal activity. In addition to that, we also have B.C. Hydro monitoring and a relation with police on the education. The B.C. Real Estate Association actually recently added to their property condition disclosure statement that you have to disclose if there's ever been any illegal activity, like a grow op or drug labs, in your property. Along with municipalities, we continue to find the tools that will assist those people found in those circumstances.

Hon. G. Collins: In Committee A, I call Committee of Supply. For the information of members, we'll be beginning the debate on the estimates of the Ministry of Transportation. In this House I call second reading of Bill 28.

Hon. P. Bell: As I announced during first reading, under the Coal Act, government issues coal licences and leases for the exploration and production of Crown-owned coal. The amendments introduced in this act deal with eliminating overlap and duplication and simplify the administration of coal tenure. The changes we are introducing reduce regulation and create a modern, simplified system for acquiring and holding coal rights.

I want to stress that this government will continue to uphold and maintain the same strong environmental regulations and guidelines, safeguards, and health and safety standards that the coal industry has long been noted for in this province.

Let me be clear on one specific change. With this bill we are removing from the Coal Act a duplicate provision that already exists under the Park Act, which prohibits exploration, development and production of coal in provincial parks or heritage sites unless authorized by a park use permit from the Ministry of Water, Land and Air Protection. The duplicate existed in the Ministry of Water, Land and Air Protection under the Park Act and continues to remain there. There is no change with regards to exploration extraction activities of coal in parks.

Further, the two-zone land use system that is currently in place for hard-rock minerals is also being established in this act for coal. The two-zone system recognizes that parks and other protected areas are off-limits — I repeat, off-limits — to development. I will go into a bit more detail on that in a moment.

The amendments in this bill support government's commitment to substantially reduce the regulatory burden for the industry, providing a secure, consistent coal tenure system. The new act will see the elimination of 49 regulatory requirements, representing a 34 percent reduction in red tape overall for the benefit of both industry and government. Several streamlining changes will delete unnecessary requirements that are duplicated by other statutes or processes, and I've already identified one of those.

Policy changes introduced by the amendments include removal of the requirement for a free-miner's certificate. Coal tenure is applied for through a map selection process, not staking. The access rights provided by a free-miner's certificate are not required for coal exploration purposes. The free-miner's certificate was simply an unnecessary burden to the coal industry and government, and with this act that is being deleted.

In addition, we're removing the requirement to provide core samples. As you may know, Mr. Speaker, coal core deteriorates over time and has a limited useful life; thereby the storage of coal core makes little sense. Government still has the authority to require submission of other technical data such as electronic logs and geological reports. Both government and industry will have significant savings in both shipping and storage costs through this change.

Removal of holding leases by this act as well, although the minister may, on application, transfer the sole existing holding lease to a lease or licence…. There is one existing holding lease. In the past, a coal licensee

was allowed to apply for a holding lease if production from the applicant's location demonstrated the coal production was not feasible at that point in time. Although only one holding lease currently exists, this provision is potentially open to abuse and could lead to a hoarding of coal rights. The owners of the sole holding lease have been consulted and will have the ability to apply for a coal lease or licence.

In addition, as I said earlier, we are incorporating the wording to reflect the two-zone land use system for mining. The two-zone land use system that is currently in place for minerals is also being established for coal. The two-zone system recognizes that parks and protected areas are off-limits — and I repeat, are off-limits — to development. The incorporation of the two-zone system in coal legislation will provide more certainty for the coal industry by confirming an operator may apply for permission to do work and have applications adjudicated on their own merits anywhere outside of parks and protected areas.

In addition, we are also providing in this act for flexibility in the size and shapes of licences. These changes will allow industry more flexibility in the size and shapes of their licences. The minimum size for a coal licence will be about 65 hectares, depending on what latitude you are in the province, and the maximum size for an individual licence will be approximately 1,700 hectares. The current size limit under the old act would allow for up to four units, which was 260 to 340 hectares, so this really should simplify the process of acquiring coal licences and reduce the amount of paperwork involved.

The grid used to describe licence locations is the same grid that is currently used for petroleum, natural gas and geothermal resources and will be used for minerals in the future, as is noted in another act that has been introduced in this House.

Several of the changes will mean savings for industry and government through less red tape. Certainly, a good example of that is the deleting of the free-miner's certificate.

It's a very exciting time in the coal industry right now. There has been an incredible resurgence in coal markets throughout the world led by the Chinese marketplace in particular, but also India and Japan. There was recently announced by the Pine Valley Mining Corp., a new mine just south of Chetwynd. It's the first new coalmine to come on stream in many, many years.

I know many of the members in this House have interests in various coal properties in their particular ridings and really would love to see more activity in the industry. We get calls on a regular basis from constituents who are looking for coal. The member for Burnaby North recently sent me an e-mail looking for contacts in the industry, which we will gladly pass on to the Mining Association of B.C., identifying some of the key coal tenure holders in the province. There is a huge need for coal, which has largely been as a result of what's been taking place in China over the last number of years.

We are definitely supporting the coal industry. We know that it is key for us. The member for East Kootenay will be speaking in a little bit. His riding is largely dependent on the coal industry and has certainly done very well by it over the years. We want to invite the coal industry back to British Columbia. It was clear through the 1990s that they were not welcome here. We saw that as mine after mine after mine closed in British Columbia, Australia's coal industry was expanding, growing, developing and taking over the markets that we had once controlled. I'm glad we're able to make this change for the coal industry. It is key.

Certainly, Tumbler Ridge is one of those communities that will benefit in a big way from the changes we have made in this Coal Act. The member for Peace River South and I visited Tumbler Ridge about three or four weeks ago. There was a community there that used to be 5,000 or 6,000 people, which is now just a shadow of its former self, but they are excited about what's happening at Pine Valley. They are excited about what Western Canadian Coal is going to do with the Wolverine project. They're excited about the possibility of Quintette maybe having another look, and then there are many other projects in the area that can be developed. I think there's an exciting time in front of us.

In rewriting the Coal Act, we consulted very closely with those holding coal tenure or wishing to acquire tenure. I make no apology for that. I believe that as a government, we need to consult with the people who wish to be in the business and ensure that we are competitive on a global basis. The coal industry is a global industry. There are coal resources around the world, and the coal industry will go to where the friendliest regulatory regimes and best taxation regimes are. We need to be competitive on a global basis in order to attract them to the province.

I look forward to passing this legislation and demonstrating our government's firm commitment to promoting investment in mining and to building a strong economy for all British Columbians through the provision of this enhanced certainty for industry. I am pleased to move second reading now.

B. Bennett: It's my honour to stand up and support the Coal Act, introduced by the Minister of State for Mining. It came to my attention earlier today that I almost missed the opportunity to speak in favour of this legislation, and had that happened, I might not have been able to return home.

First of all, I guess, it's not major legislation, but it's legislation that just goes one step further to make it a bit easier to do business here in this province. It's reduced 34 percent of the red tape in the previous legislation. That has to be a positive thing. It's also incorporated the two-zone land use system for mining, which is important to the coal industry.

The coal industry in the East Kootenay, obviously, is an entrenched industry that has done very well, continues to do well and has a 50-year plan ahead of itself.

On the other hand, there are possibilities for additional coal operations around the province, and for those new operations, these changes to the Coal Act will be quite beneficial. It will make it a lot easier for them to do business in B.C. and, hopefully, will encourage them to invest their money and to create jobs here, because that's what this is all about.

Coming from an area where coalmining makes one of the two largest economic contributions in the region, I can say without hesitation that the coal industry has been good for B.C. In British Columbia we don't use coal a lot. We use it a little bit in our concrete plants. We send most of it offshore to places like Japan. Japan has been our historical export destination. We're also, as the Minister of State for Mining indicated, sending more and more coal to China, with their burgeoning economy. For the most part, coal has gone out of the province to Asia and, to some extent, now to eastern Canada and also to the U.S. Other jurisdictions, on the other hand, like Alberta have coal — not as high a quality of coal as we have here in B.C., but they do have large reserves of coal — and they tend to use that coal to generate jobs in their own jurisdiction.

I think that in the future here in British Columbia, we really do need to put our minds to ways that we can use this very abundant resource, this very high-quality coal, to export — exporting is great; the money comes back to the province; it helps pay for education and health care — but we also need to find ways to use that coal to generate some value-added opportunities right here. The production of electricity might be one example of how you could use that coal or the coal tailings.

In the East Kootenay, in the little communities of Elkford and Sparwood and Fernie, there are 2,600 direct jobs in the coal industry today, and the company, Elk Valley Coal Corp., is apparently beginning to hire more. Those 2,600 direct jobs in the industry average $82,000 a year in salary and benefits. I never get tired of saying that. It actually boggles the mind to think that in a small, far-flung rural area like the East Kootenay, you can have a mass of high-paying jobs like that.

When we think about rural B.C., I know we hear sometimes that it's suffering, and some areas of the province are suffering. It's been a challenge to get the forest industry back on its feet after the decade of decline. I think we are getting there in that regard. In the areas where we've had a strong mining presence, like the Elk Valley and like this coal industry, they have actually done reasonably well. Thank goodness we've had that industry in this province. People have had money to buy some toys like ATVs and snowmobiles and half-ton trucks. People have had money to take holidays. It really adds to the quality of life for rural British Columbians when they've got these kinds of jobs to depend on. I am unabashedly a promoter, and an enthusiastic promoter, of coal industry jobs. I know that the coal industry pays a lot of money to the provincial government and to the federal government in terms of taxes. Of course, those taxes go to pay for health care and education.

As the Minister of State for Mining indicated, the coal industry around the world is in a period of expansion. Right now the five mines in the East Kootenay are going full tilt. They have a guarantee from Canadian Pacific Railway that at least six trains a day, seven days a week, will go from the Elk Valley out to the port in Vancouver. Actually, they have enough market right now that they could probably double that if we had more rail lines. So transportation infrastructure does become a bit of an issue for them and for us. There's more coal there. There's more coal that could be sold. We just need to find a way to get it to market.

Then, of course, there are the undeveloped coal zones in the province up in the northeast in particular and, I think, some north of Prince George and actually some very high-quality coal north of Prince Rupert in the Skeena region — so lots of opportunity out there.

Apparently we have about 100 years of coal potential in the province in terms of the known reserves and, I'm sure, much more that we don't know about. As long as the coal is taken out of the ground in a way that is responsible…. Certainly, I think the Elk Valley in my riding is a perfect example of how that can happen. They've been mining coal in the Elk Valley for 100 years. In fact, two of the largest mines are located very close to both the Fording River and the Elk River. Both of those rivers are pristine rivers with wonderful cutthroat fishing in them. They're just as good today…. In fact, many of the old-timers will tell you that those rivers are better fishing today than they were 30 years ago.

The coalmines are located in close proximity to both those rivers. It can be done. I think that's an important point to make. Coalmining is a responsible industry, and it can be done in a way that does not have an unsustainable impact on the environment.

Having used this opportunity to talk about this Coal Act and the changes made by my colleague, I will just close by saying that this is not the last that you'll hear me speak of coal.

D. MacKay: I am pleased to stand up today and support second reading of the Coal Act amendment, 2004. I guess I should probably qualify myself as standing up and speaking on behalf of the coal industry. I grew up in a small coalmining town in southwest Alberta — a small place called Mercoal; c-o-a-l spelled at the back end of it. Obviously, it was a small coalmining town.

My father worked underground for a number of years until we left Mercoal in 1957 and moved to Hinton. The coalmine provided a good-paying job for my father, and I went to school with a number of children. The only industry we had in that small town of Mercoal was coalmining. When the mines closed in 1957, it was a bit of a shock to us. We had to leave the town I grew up in as a youngster because the demand for coal worldwide had dried up, and nobody was interested in buying coal anymore.

I'm pleased today to be able to stand up and support the amendments to the Coal Act in British Colum-

bia because of the demand for coal once again. That's great news for the coal industry across this country, but in particular B.C.

Because I represent the riding of Bulkley Valley–Stikine, and it is such a gratefully endowed part of the province in mineralization and coal…. I can remember when I first went to Smithers back in 1981. There was a small coalmine that had just closed at the small village of Telkwa. The miners' hats were still hanging on the racks; their tags were still there. It looked like it had just shut down the day before. I can remember taking my father there, and we walked through the old coalmine shack that contained all these old relics from the coalminers. It was a bit of a reawakening for me to realize that that's what my father and my grandfather both had done. They were both involved in the coal industry in Alberta before the mines closed. So it's certainly an honour for me to stand up and support these amendments.

When we look at the increase in coal prices today…. That's what's driving the demand for coal worldwide. In order to be able to meet the demand…. We have the coal reserves here, but we have to make changes. We had to make changes to attract the investment dollars to take the coal from the ground, and we've done that with this piece of legislation.

Getting rid of 49 regulatory requirements actually reduced the regulation by 34 percent. One of our commitments as government was to reduce red tape and regulation to attract investment dollars back here, and we're doing that. This is a good step in the right direction.

We're also supporting the objective of promoting investment in mining — not just coalmining but goldmining and coppermining. All those things are seeing a big resurgence in this province, and it's because of some of the changes such as the Coal Act amendment before this House today.

The two-zone system had to follow. It was a natural, because the coalmining community also has to know where they can look for coal, where they can't look for coal. These changes clarify that and exemplify which areas they can't go in. Parks and protected areas, as the minister of state has stated, are out of bounds for the mining industry. There's no argument there; it is understood. So when they go out and start looking for coal reserves, they know where they can't go. That's good news.

The requirement to have a free-miner's licence didn't make a whole bunch of sense for the coalmining industry. I mean, it made sense for the hard-rock miners, because they needed that licence to be able to go on private property and search for minerals. You don't do that with the mining industry. It is all done by map selection, and that's another step in the right direction to simplify things, to make the administration process to acquire a coal tenure simple and easy and to reduce the red tape and cost for the mining industry. We have done so much.

I've got two coalmines in my community, in the riding — one being Telkwa right on the CN main line that runs from Prince George through to Prince Rupert. It is a natural fit. We should do what we can — and the minister of state is doing what he can — through changes such as this to make sure that coalmines like the small coalmine at Telkwa reopens again and creates employment opportunities for families. Families who rely on those good-paying jobs from the mining industry will once again surface in that small community of Telkwa. It will provide jobs for families. It will create employment opportunities. It will provide a tax base for the community as well.

A little bit further north in the riding that I represent is a place called the Klappan coalfields. It's a huge coal deposit, and it's situated on the old B.C. Rail line that runs through there. It is estimated there is about 2.5 billion tonnes of coal in the ground there. With the coal prices on the rise again, the people who own that tenure are looking very seriously at opening that pit.

They're also talking to CN, and once the ink is dried on the contract between B.C. Rail and CN, I suspect the owners of Klappan Coal will be talking to CN once again to look at extending the rail line up to the coalfields, to move the coal by train down to Prince George and back out through Prince Rupert, which is the nearest saltwater port for them. So I am really pleased that the minister has finally introduced some amendments to reinvigorate the coal industry.

As I said, growing up in a small community of coalmining towns, I went to school with young children that went into the coal industry. I suspect that had the coalmine stayed open longer than 1957, I probably would have followed in the footsteps of my grandfather and father. I myself might have been underground working in the coalmines, and I'm glad in some senses that the coalmine actually closed down when it did.

D. MacKay: I probably would have. The member has suggested I may have made more money had I stayed in the coal industry, and that's probably the truth.

I am pleased to be able to stand here and support the Coal Act amendments as introduced by the Minister of State for Mining.

G. Hogg: We're very privileged today to have a number of people present from Whale House in Surrey–White Rock. They are a number of bright, interested and interesting individuals who have taken the bus over here to Victoria today, and they've had a tour of the building. I just met with them and heard a number of good, positive questions about government and the way the government functions. David was their tour guide, and they tell me he did a marvellous job. Would

the House please give a thunderous ovation and welcome to the people from Whale House.

B. Lekstrom: It is my privilege today to rise in the House to support Bill 28, the Coal Act, as presented by my colleague from Prince George North, the Minister of State for Mining. In the minister's comments earlier he talked about the riding of Peace River South, which I'm extremely proud to be from and represent, and coal is a big issue for us in the northeast part of our province.

Tumbler Ridge has faced some very beneficial times as a result of the coal industry and likewise faced some significant challenges when those mines decided they had finished their job there and had left. The bright spot is that with the changes that the minister has talked about today in the Coal Act and the new focus on the coal industry in British Columbia, we see new mines interested in opening up in the northeast part of British Columbia.

It is an extremely valuable resource. I think it has been overlooked in many cases as a dirty resource, when in fact it isn't. The technology has advanced today to the point where we can burn coal virtually as clean as natural gas. I think that's an important point for all British Columbians and people around the world to recognize.

The issue really — about being able to go out and look for coal, the tenure issue — is one of the two-zone issue, which I think is vitally important. It's a go or no-go zone, however we'd like to refer to it. If we have somebody that's prepared to invest in our province and go out and look for coal, we aren't going to, as a government, allow them to go through that process, find the coal they need, spend millions of dollars to get it to a point where they can come to government and say, "We now want to extract that resource," only to be told by a government: "You may have spent millions of dollars, and you may have put many years of work into this, but having found it, we're now not going to let you take that coal out of the ground."

The Coal Act lays it out clearly. If you're going to invest in our province and look for coal in one of the zones in which you're allowed to explore for coal, then should you be successful in finding that coal, we're going to allow you to extract it, put people to work and allow them to make money and raise their families, and benefit not just the communities but the entire province.

This bill streamlines our administration of the coal tenures, which I think is vitally important to the commitment we made to the people of British Columbia, which was to make doing business with government easier. We're going to do that while at the same time maintaining our environmental standards in British Columbia. I think we're known around the world for our strong environmental standards and how we extract our resources in British Columbia and how those resources work for all of us. We're going to maintain those high standards.

I can't say enough about what this bill means to the northeast part of our province and in particular two communities in my region, Tumbler Ridge and Chetwynd. Chetwynd is set to benefit greatly from a new coalmine being implemented in our region, as well as Tumbler Ridge. Not only do these communities benefit but also the communities in the entire northeast. We have workers that will reside anywhere. They will commute to these mines, they will work, and they will stay in camp if they have to. They bring that revenue back to the communities, they spend that money there, and they raise their families there — all at the same time as having a quality of life second to none.

There's going to be a lot of discussion, I think, through the committee stage of this bill. I believe it's about 34 sections long. Many of the sections, I think, are long overdue. They lay out an easy path for people who are interested in this industry and this resource to approach government, to go out into the field, to explore, to find this resource and to extract it. I'm very proud to be here this afternoon, on behalf of my constituents of Peace River South, to stand in support of Bill 28.

Mr. Speaker: On second reading of Bill 28, the Minister of State for Mining closes debate.

Hon. P. Bell: Mr. Speaker, I'm very, very pleased to see that we clearly have unanimous consent of the House today. Everyone who has bothered to take the opportunity to speak to this wonderful act has agreed with it, so I think that's very, very encouraging — to see that all 79 members of the Legislature are in full support of this act moving forward into the twenty-first century and allowing ourselves to tap into that wonderful natural resource that is coal.

Certainly, the opportunities are fabulous for us all — 2,600 direct jobs, as the member for East Kootenay identified earlier in his particular riding. That is a significant number of people. The average salary is $89,900 per year — the highest average salary of any industry in British Columbia. It's one of the safest heavy industries — in fact, the safest heavy industry — in British Columbia. Mining has an incredibly safe record.

I was fortunate just a few weeks ago to attend the Quinsam coalmine, which is located in Campbell River. It's the only underground coalmine that still exists in Canada. That particular mine, although it's not a big mine, competes on the safety awards levels with all of the open-pit coalmines, which are clearly — one would think — safer that an underground coalmine. Mr. Speaker, I'm pleased to be able to tell you that the Quinsam coalmine has gone two years without a reportable accident — an underground coalmine over two years without a reportable accident. It is an incredibly safe operation and in fact much safer than many other industries that people work in today.

Coal can be a safe industry. It's a very productive industry. As we identified earlier, a large number of

employees make a high level of salary. I'm looking forward to a much-expanded industry as a result of this very positive, simplified act. We need to develop what the member for East Kootenay identified in his riding and was expanded by the members for Peace River South and for Bulkley Valley–Stikine. There are certainly many other locations around the province that have tremendous coal resources. We've already heard that coal can be burnt in a very clean manner, similar to that of natural gas, so it is a great source of energy for us as we move forward through the twenty-first century.

I want to congratulate the members that chose to speak to this bill today, but I especially would like to make note of the member for East Kootenay. He has been a tremendous advocate for the coal industry for as long as I have known him, and I think he's really brought the issues of the coal industry to the forefront for all members of this House. In fact, I recall that this member for East Kootenay once gave all the members of this House a chunk of coal for Christmas one year.

Hon. P. Bell: Twice — pardon me. He twice gave us a chunk of coal for Christmas.

He has been a tremendous advocate for the industry. I think the industry should recognize that they have someone who is eager to make things positive for the industry and to bring it to the forefront.

I would also like to congratulate all the members of the mining task force. They came to us with a series of recommendations. We're gradually pulling those recommendations forward and moving them to the point that we have a successful mining plan. This piece of legislation, I think, is a clear commitment to the mining action plan that we'll be bringing forward and to all the members of the mining task force. We took the work very seriously in carrying it forward.

I'm pleased with the results that this act will achieve for us. I think it is very, very good news going forward for the economy of British Columbia. It will help us fund the health care system and education system that all of us so desperately desire.

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

Bill 28, Coal Act, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. J. Les: I move consideration by the House at committee stage of Bill 14.

The House in Committee of the Whole (Section B) on Bill 14; K. Stewart in the chair.

Hon. J. Les: With me today from the ministry is the assistant deputy minister, Doug Caul, and from the staff, Francesca Wheler.

T. Nebbeling: I have a number of questions on the bill. I hope that with the answers the minister will provide me, I can find a reasonable level of comfort with this bill. I should say to the minister that an introduction of a tax on tourism businesses is something that, in principle, I have no problem with.

As the minister is aware, as part of how Whistler got together…. We introduced an organization similar to Tourism Vancouver, which was then called the Whistler Resort Association and after that became Whistler One. One of the tools to finance that operation was indeed through a form of taxation on the existing business community that was created in the new town centre, where 85 percent of the businesses resided. So I clearly support the direction of getting more revenue to promote Vancouver and the greater Vancouver area and the province as a whole through this kind of taxation.

However, one of the questions I was asked by — of all industries — the restaurant industries had to do with the title, and that is the Vancouver tourism levy. It is specifically on the word "tourism." One of the concerns expressed by the restaurant association is that many of the members in the greater Vancouver area do not cater to the tourism industry but to local business. How can businesses that are outside the traditional tourism area, like downtown Vancouver, be safeguarded so that they would not have to charge an additional levy or tax — whatever that levy is, and we will be talking about it later — that would only really apply to the local customers?

Hon. J. Les: Just a technical matter. I'm not sure exactly which section of the bill this refers to, but I will answer.

The Chair: Just for clarification, members, the title is the last item we bring up. We're dealing with section 1 of the bill.

Hon. J. Les: I'm certainly happy to answer the question. The member's concerns are well founded, frankly,

in that the restaurant and food services industry is composed of many different classes and is very diverse not only in the services and types of services that are offered but also geographically very diverse and dispersed. It will be the challenge for Tourism Vancouver to craft an approach that caters to those restaurant businesses that specifically benefit from the tourism industry. I quite agree that perhaps some, perhaps many of them, do not. If Tourism Vancouver were to attempt to approach a majority of restaurants and food services industries that in no way benefit from the tourism industry, I suspect that it would be flatly turned down in terms of the process of gaining the assent of those to be levied. There will be a careful balance required on behalf of Tourism Vancouver to ensure that it fine-tunes a proposal to that segment of an industry that does indeed directly benefit in a real way, as well as apparently from the tourism industry.

T. Nebbeling: The minister is saying that part of the structure that the levy or the tax ultimately will have as its body of operation will include geographical areas that could be targeted for this introduction of that levy. How does that work?

When I see the minister introducing in the definitions the fact that this bill, although it is Tourism Vancouver, will apply to the greater Vancouver area — almost the region of the GVRD, which means the terrain of other tourism organizations like Tourism Richmond, Tourism Surrey, Tourism Burnaby…. I find it a little difficult to understand what the minister is saying, unless he tells me that this is actually going to be done on a geographical basis rather than an overall coverage of the lower mainland.

Hon. J. Les: I think there are some pretty clear explanations to meet the member's concern. First of all, although the bill in several cases refers to the greater Vancouver area, any tourism-related business outside of the city of Vancouver can and may opt in as a contributor to this tourism levy on a voluntary basis. There is no ability for Tourism Vancouver to demand or in any other way include any of the tourism-related businesses from outside of the city of Vancouver. It's got to be optional on behalf of the business located outside of the city of Vancouver.

Secondly, in terms of those businesses that are located within the boundaries of the city of Vancouver, it is quite open to Tourism Vancouver and the various associations within the city to further subdivide the city on a geographical basis. For example, you could include the downtown peninsula and no other part of the city of Vancouver. I use that only as a very rough example.

I hope that clarifies the matter for the member. This is very much a case of allowing as much flexibility as possible so that the levies, when collected, are from businesses that truly do benefit from the major expansion of the tourism industry that we foresee in the years ahead.

T. Nebbeling: Okay. Let me think. In consultation with organizations like the restaurant association or the taxi associations, whatever they're called…. Tourism Vancouver is mandated to have discussions with these groups together on side. Does that mean that if the restaurant association, for example, says, "Well, the geographical area along the waterfront from Victoria right up to Stanley Park going into English Bay, Burrard…." So that whole area, Robson area, the downtown area…. All the restaurants fit in there. That's the target area for the levy. The restaurant association goes to the membership, and the membership is asked how they feel about this levy.

That will lead to my next question, the levy itself. If the membership says no, if 75 percent of the membership says, "Listen, we're not going to add more cost to the bills," for whatever reason, is it done? Is it dead? Or are there then other mechanisms for Tourism Vancouver to still go after that sector?

Hon. J. Les: In the hypothetical example that the member posed, where 75 percent of a certain group were to vote in opposition to a proposal by Tourism Vancouver, clearly the measure would not be able to proceed. The bill does make several references to the fact that these decisions must be made democratically, and certainly a large majority voting in opposition would mean that the matter would end at that point.

I think the next question was: what then? Simply, Tourism Vancouver would have to reassess the proposal it had put forward — I would suggest undertake some significant consultation and fine-tune and resubmit something that perhaps would have the support of at least a majority of the intended businesses in terms of the new levy that was proposed.

T. Nebbeling: Well, it's interesting, because nine months ago the restaurant association was approached by the B.C. and Yukon Hotels Association group, and they actually made a proposal to the restaurant association to initiate a tourism tax on top of the bill to use for exactly the same purpose that Tourism Vancouver is talking about. I know, after having talked to the president of the organization, that the suggestion that was lobbied with the membership went up in flames. So, it is not the first time this kind of a process is being undertaken or considered.

I think one of the reasons the restaurant industry in general spoke against this levy was that this was an idea that came from a group, an association, without really consulting before they came up with what the idea entailed, what the levy was. People said no, and I think that in a sense Tourism Vancouver, with our endorsement, is doing exactly the same.

I have called a number of associations over the last week, asking: "Have you been contacted by Tourism Vancouver to discuss this potential good idea?" None of them had actually had a phone call or a meeting discussing what it is. The one big question that, at the end of the day, will still be here is: what is the levy? We

know that in section 4, every potential business that has any connection with the tourism industry is targeted for participation. But nobody knows what the levy is. One of the more prominent leaders in this association said: "I feel like jumping in a funnel, and I don't know where the hell the end is." Not having had any negotiations or discussions with the stakeholders for buy-in, I believe we will have the same result that the hotel and motel association experienced.

One of the things that I find strange is that…. The definition of levy here says: "'levy' means a levy prescribed under section 4." So "levy" means a levy that we can impose on a number of different businesses. It doesn't give me the definition. I don't know what you have in mind or what the tourism industry has in mind. Is it a flat fee annually? Is it 3 percent on top of the bill? Is it based on square footage? I don't know. But I do know that Tourism Vancouver has already stated they expect $6 million to $8 million in revenue from this levy annually. That's a big chunk of dough.

It is something that I think should have been part of this bill as a direction so that people can truly, up front before we pass a bill, say: "We believe in this, we can see this as a good thing, and we will participate in it."

Can the minister explain to me why "levy" really has not got a definition that explains what the levy is? It just says that the levy can be a charge on certain businesses, but it is not a proper definition.

Hon. J. Les: In response to the questions from the member, I would point out, first of all, that the bill does not impose any levies on anyone at this time. It is simply legislation that enables levies to be negotiated between Tourism Vancouver and various tourism industry sectors in the city of Vancouver.

The key word there is that these levies are to be negotiated and then adopted democratically. Clearly, if you consider the various types of tourism industries, what is appropriate as a mechanism in the hotel industry, for example, may not be at all appropriate for the taxi industry or the restaurant industry or other tourism-related industries. Every industry has a different revenue structure, and I'm sure operators in these various industries also have different wishes as to how they might contribute from their businesses to the marketing of tourism opportunities in Vancouver.

The fact that there isn't a specific definition as to what a levy is in each of the specific sectors of the tourism industry is quite deliberate, because this is a matter that is, frankly, better left to the discussions and negotiations between Tourism Vancouver and the tourism industry as opposed to an imposition that would be foisted upon them by us here in Victoria.

T. Nebbeling: I don't think I can agree with the minister, and the reason is, as I said before, that we are not inventing the wheel. Our tourism association that promotes British Columbia is given the tools to finance these promotions. We are not inventing the wheel because it has been done.

I was part of the resort association creation and how they were given exactly the same tool that we are doing here…. The Whistler Resort Association act is very specific on (a) how the taxation is constructed and (b) how the people that pay for this or who collect these levies from the visitors play a role in how that money is being spent by their representation on the board.

In Whistler, for example, the hotel sector has a seat on the board. So does the commercial sector; so does the chamber of commerce. There are only, in total, eight members. The way that money is collected is described in the bill; how the money is being spent is controlled by those that actually pay the levies. The association, because of that mechanism, has been able to convince everybody to be on board. As a matter of fact, it is mandatory in Whistler for a specific business area.

I think you can be prescriptive in bills like this. It tells people exactly what is going to happen, and it also shows how they're not walking into a situation…. What I'm really worried about here, as well, is the situation of taxation without representation, because I don't know how the members from the businesses that will be paying are going to have a voice on the board that is meaningful. Right now, I think the tourism board has spoken a couple of times to them, but there are always about 35 or 40 directors, and I don't know how they elect them.

Once you start putting a tax onto businesses to pay for the operation, then I think it is not only that Tourism Vancouver has to look at how they convince people to participate in this program, but they also have to, in a democratic way, make sure those that pay these levies, these taxes, have a say in how it is being used or how the promotion will work.

I regret we don't have that clarity and that transparency because I think it would be a lot easier to sell to these various business groups, and I think the end result is that you are going to have many more people buy into this. That is my reaction to what the minister said, but I believe some other members have some questions.

J. Kwan: My questions actually just follow up on some of the issues the member for West Vancouver–Garibaldi has raised.

On the question around the levy. The question was put to the minister in terms of how much the levy is. The minister said he doesn't know and that Tourism Vancouver will sort of go through a process and set that themselves.

On the question relating to this bill — which was a question I asked of the minister during the estimates debate with the ministry — and that is: how much does the ministry anticipate this bill, with this new levy, will bring in? If the minister doesn't know exactly what the levy is, does he have any anticipation of how much money is to be brought in by this bill?

Hon. J. Les: In response to the question from the member for Vancouver–Mount Pleasant, I am not able to give her any estimate of the amount of revenue that is

going to be raised as a result of this legislation. That is going to be a matter for negotiation between Tourism Vancouver and its membership and the tourism sector in the city of Vancouver. I would assume generally that if Tourism Vancouver puts forward collaborative proposals that receive broad support in the tourism community, the revenue could be very significant. If on the other hand they fail to consult and fail to devise intelligently thought-out proposals, then frankly there could be very little revenue raised as a result of this legislation.

Certainly by supporting this legislation, I make no representations as to how successful Tourism Vancouver is going to be. That ball is in Tourism Vancouver's court, as well as in the court of the tourism sector generally in the city of Vancouver.

J. Kwan: According to newspaper reports, the anticipation is that they will receive somewhere between $6 million to $8 million with respect to the levy. I would have thought the minister would have had some sort of calculation here, especially as this bill is actually sponsored by the minister. In terms of how that process might work — even some legwork in terms of early consultation with this levy — one would have expected that the minister would have had discussions with Tourism Vancouver. Tourism Vancouver, in turn, would have had discussions with its membership around this, as the member for West Vancouver–Garibaldi had alluded to.

It is kind of perplexing that here we have a bill before us, but the minister has no idea how it is going to flow on the ground that would impact the people. Yet it is here in legislation, and we are debating the matter. None of that consultation, it appears to me, has been done. That's, quite frankly, strange — that none of this work has been done, and the minister doesn't have any information with respect to that.

The levy that is expected, though, and the language which this bill is using with respect to the application of the levy and so on…. It is not clear how the levy will be charged as an example. Just to use one example for which we know a levy is in place in the tourism sector, that would be the hotel tax. It is very transparent in that format. It is actually out and open and is stated clearly in the bills that one gets.

Is it anticipated that the levy that would be charged under this bill would be as transparent as the hotel tax, or would it be simply buried in the service of the product that is provided?

Hon. J. Les: I want to reassure the member that there is going to be good transparency and accountability back to the tourism industry in the city of Vancouver. There is a requirement in the bill that audited financial statements be produced annually and that those be provided in the form of an annual report back to those same businesses to which any levy might apply.

J. Kwan: Is there any requirement, though, in this bill where the public would know, if a levy is applied, how much that levy is for a particular service or a particular product? Coming back to the other closest example I could think of — the hotel tax — if one goes to stay at a hotel, you get your bill at the end. It actually shows the hotel tax at 2 percent and what the amount is. So the customer knows, in other words. Is there a requirement for that level of transparency so that the consumer knows what they're paying for?

Hon. J. Les: The answer to that question is that it will not necessarily be automatically noticeable by the public in terms of what the levy is in any particular sector. That is because the question of how the levy is to be collected and at what point in the transaction or in the business cycle the levy is to be collected is a matter of negotiation between Tourism Vancouver and the business sector. There may be some businesses, for example, that simply agree with Tourism Vancouver that each of their businesses will pay X amount of dollars once a year towards the marketing campaigns of Tourism Vancouver. In that kind of case, there would not be a levy on each transaction with each member of the public with which they do business; it would simply be a flat fee. I use that only as a hypothetical example, but that is quite a plausible example of how this levy might apply in some situations.

J. Kwan: There could be a difference then, in terms of how different businesses might apply the fee. In some cases, if a business chooses to pay the fee at the end of the year, they may not explicitly say they're charging their customers this amount of levy on the cost of the product or service they are providing, although it is very feasible. I would assume that those businesses would roll the fee into the cost of the service or the product they are providing to the customer. The customer would not know exactly where all the fees lay — you know, where the price breakdown is — that would incorporate the levy…. But in another instance a business owner could choose to be explicit and transparent about it. They would collect their levy with the product or the service which they provide to the customer, and then in the bill it would explicitly say that there is a levy charged. Is that what the minister is saying — that it could vary from business to business depending on how they operate?

Hon. J. Les: I should underline again that the structure of these particular levies is going to be a matter of negotiation between Tourism Vancouver and the various tourism sectors. My expectation would be that you're not going to see very much variation in terms of how a levy is collected within the different sectors of the tourism industry. There is likely to be considerable variety from sector to sector, but I think once a sector has agreed with Tourism Vancouver that they will contribute — I am making an assumption, and I believe this is the correct assumption — there is going to be unanimity and a common approach within each of those sectors.

J. Kwan: It is clear when the hotel tax is applied how much is added to your bill as a result of the hotel

tax. Then it is out there. Why not put in a requirement so that the levy that is charged would be transparent in the services or the product that is being provided, no matter what sector? You know how much is going to GST, you know how much is going to PST, you know how much is going to the levy, and you know how much is going to the product or the service itself. You have a complete breakdown of the cost of whatever it is that the consumer is buying. Wouldn't that be a better way of ensuring that this information is out there publicly — for the consumer's consumption, most importantly?

Hon. J. Les: I guess it depends to a certain degree on how you look at this. The way we're looking at this legislation is that this provides for the industry a way to generate marketing money. I'm sure that many — if not all, in fact — of these businesses today are already expending a lot of money on marketing their industry and their individual businesses.

So this is marketing money, and I'm not sure that at the end of the day it makes a lot of difference whether there is another line item that purports to show how much these businesses are expending on the marketing of their industry or their individual business.

I think, again, we have agreed with Tourism Vancouver that they need to adopt a sector-by-sector approach to generate additional marketing money, given the vast opportunities that are before them in the next five to six years. This should, if properly executed by Tourism Vancouver and their stakeholders, as I'm sure they will…. This simply is going to generate additional marketing money. Although the consumer has some interest in terms of how much money these businesses are spending to market themselves, I'm not sure that's an overriding interest of the consumer.

J. Kwan: Well, while it may not be of great concern for the government whether or not the levy is laid out for the consumer's point of view, I would think that it is an important piece of information for the consumer or customer. I'll tell you, when I go to a hotel, those bills add up. You do want to see how it all breaks down and where the costs are coming from — especially in this instance, where you have Tourism Vancouver's levy applied only in this region but not in other regions. There is a competition question, as well, for the consumer's information. You know, it's basic information that I would think is important in terms of it being required to be broken down for the consumer's point of view.

I would disagree with the minister that maybe consumers don't want to know. I expect they would want to know where all the fees are coming from and why a certain product has a particular cost. People generally want to know that kind of thing. Even at restaurants now, aside from the tax costs, it also breaks down — if you drink liquor, the liquor tax, as an example — so that you actually know from your restaurant bill how all the pieces are broken down and then how it all adds up at the end of the day.

If the case is such that as we know from this bill, Bill 14, the levy is to apply to a marketing campaign, how much additional tourism revenue and how many more tourist visits does Tourism Vancouver anticipate will result from the marketing campaign that this levy would finance?

Hon. J. Les: Just as I said a few minutes ago, I cannot speculate with any accuracy as to the amount of levy revenue that will be generated by this bill and by the various agreements that Tourism Vancouver might achieve between itself and its stakeholders. By the same token, I can't speculate very accurately how much additional tourism revenue might be generated as a result of the spending of that additional levy revenue.

However, we all know that there are some huge opportunities available to the tourism industry in the lower mainland and, specifically, in the city of Vancouver. We will be starting construction very soon on the new trade and convention centre, which will triple the number of people that can be hosted at conventions in the city of Vancouver. If properly marketed, which I'm confident it will be, and backed up by appropriate additional marketing and support by Tourism Vancouver, I think we are perhaps setting the stage for a major success for all members in the tourism community in the city of Vancouver.

Again, this legislation was deliberately not intended to be prescriptive. It was brought forward at the request of Tourism Vancouver. It is enabling in nature. It is very much going to result in agreements reached on a voluntary basis between Tourism Vancouver and its stakeholders, democratically decided. It's industry-driven, which I think is, again, preferable to imposition from Victoria.

J. Kwan: What is the breakdown now in terms of the activities in each of the different sectors in the region with respect to locals versus visitors — that is, those from outside of the community? What percentage are locals, and what percentage are out of the country, out of the province, etc.? Does the minister have any sense…?

Hon. J. Les: I'd like to respond to the member's question. However, we do not have that information accurately available this afternoon, but I would certainly undertake to make that information available as soon as I can locate it.

J. Kwan: I'll tell the minister why I asked that question. Depending on what those numbers look like, is there any consideration or any possibility for this consideration where the levy would apply…? If the idea is to bring tourists into the province to spend their dollars, and so on and so forth, and if this money goes into the marketing of it as well, is there any potential for the levy to apply only to tourists — therefore not to locals, as an example? Are there such opportunities for the application of that levy?

Hon. J. Les: I think the answer to that question is fairly evident from what I've said earlier. This would clearly be a matter of negotiation between Tourism Vancouver and the individual sectors. There are clearly going to be some sectors that benefit more than others from increased tourism presence in the city of Vancouver. Whether that's related directly to specific increases in tourism revenue or in tourist numbers, again, that's going to vary from sector to sector. In some cases that's much more easily calculated than in others.

Therefore, I can't be much more specific than that today, other than to say those who are in the business of tourism probably know better than I and most members of this House how to appropriately structure such a thing to be broadly reflective of the success of the marketing campaigns that are being anticipated.

J. Kwan: My question, though, was: is there such a possibility where the application of the fee in the different sectors would apply, let's say, not to locals but only to tourists from out of the province or out of the country or whatever? I'm not saying how it should be prescribed. I'm talking about whether or not that possibility is there. And am I understanding the minister correctly that that possibility is there but that it's up to the industry, in the sector, to decide whether or not they want to apply that kind of differential fee?

Hon. J. Les: Subject to the logistical viability, the possibility is certainly there in this act to enable Tourism Vancouver and its stakeholders to devise those kinds of systems to generate the levies that are anticipated here.

Hon. J. Les: I move that the House rise and report the bill complete without amendment.

Bill 14, Vancouver Tourism Levy Enabling Act, reported complete without amendment, read a third time and passed.

The House in Committee of the Whole (Section B) on Bill 24; H. Bloy in the chair.

B. Lekstrom: Under section 1 of Bill 24, 1(d)(c) is where my question falls: "machinery primarily intended for construction, mining or logging purposes."

Can the minister please tell me: are we dealing with the sale of logging trucks, or is that covered under the Motor Vehicle Act, for instance? These are pieces of equipment that are highway-worthy. They go out and so on. When we look at somewhat of an exemption, where it refers to but does not include — and that subsection is laid out that way…. Could the minister please answer that for me?

Hon. J. Les: I point out to the member that this bill deals with passenger vehicles only and was not intended to include the categories of vehicles that he enumerated.

B. Lekstrom: A couple of questions regarding…. I believe they'll be captured under section 1. It seems to be somewhat of a change. I'm going with some people within my area — RV dealers, for instance — that have worked for 30 or 40 years selling RVs. Now they are required under this act, I believe, to take some training, if I'm correct in my interpretation. Can the minister just elaborate somewhat on that? I know it would probably deal with the issue of motor homes and so on. Is there a reason that I've missed or my constituents have missed as to the need for this when in fact it's gone on for 30 or 40 years and worked very well? Now they're questioning me, as their representative, to say: "Why do we now have to go and take this?" I guess it's a pretty broad question, but I would hopefully get an answer.

Hon. J. Les: This change was made at the request of the auto sales industry. They want to enhance the professionalism of their professional sales force and in that way become, perhaps, more professional and responsible and accountable to the public they serve.

B. Lekstrom: Fully understanding that, I agree. I think it enhances their ability to showcase to the public that they're a responsible group. I guess my question is more focused on the recreational vehicle dealers. Are they part of the auto dealers association? I thought there was a difference. If they are, was there a request from the recreational vehicle dealers to be included within this legislation?

Hon. J. Les: The Recreational Vehicle Dealers Association specifically also requested to be included in this designation and registration of their salespeople.

B. Lekstrom: Maybe just in conclusion then, I imagine…. The question I would have is: are all recreational vehicle dealers in the province then mandated to be part of this association? Do they speak for all recreational vehicle dealers — whether it be trailers, motor

homes or so on? Is it mandatory participation, or are they speaking on behalf of their affiliates or associates and there is a group of others that aren't associated with this Recreational Vehicle Dealers Association?

Hon. J. Les: The Motor Dealers Association speaks for most but not necessarily all of the dealers that the member refers to. However, upon the proclamation of this act, it will apply to all dealers in the province.

B. Lekstrom: Thank you for the clarification on that. I do want to follow through with the first question I raised, where we talked about the vehicles and for personal automobiles that I think you referred to on that.

Can the minister tell me: if it is the motor dealers of British Columbia that have talked about this and a recreational…? If I'm interpreting section 1(d)(c) properly, why would someone that sells Kenworth or large trucks like that not want to be included? Why would their salespeople be exempted under this act — if I'm interpreting that right?

Hon. J. Les: The class of vehicle that the member refers to has historically never been included under the definition of motor vehicle. I think the common public perception is that they are a completely different category of vehicle. As such, they have other inspections and other mechanisms that are mandatory to ensure that the public interest is served in the buying, selling and operation of those particular classes of vehicles.

B. Lekstrom: Well, through to the minister, I want to thank you for your answers. It's an issue. When our constituents raise the issues with us, we commit to them to bring them to the floor of the Legislature to ask questions during committee stage, and I thank you for your answers.

Hon. J. Les: I move that the committee rise and report the bill complete without amendment.

Bill 24, Motor Dealer Amendment Act, 2004, reported complete without amendment, read a third time and passed.

Hon. M. de Jong: In this House I call Committee of Supply. For the information of members, we will be considering the estimates of the Ministry of Community, Aboriginal and Women's Services.

J. Kwan: Prior to the weekend break we were discussing issues related to local governments, particularly — in my view — as a result of a series of government cuts in programs, which have a direct impact on local governments. We used some examples in Vancouver, where the elimination of housing programs, for example, has impacted British Columbia greatly. In the city of Vancouver we have seen tent cities popping up here and there, where people are in great need of housing and unable to get it. Local governments are definitely impacted that way.

We also canvassed today, as an example, in question period where a number of drop-in centres…. Funding has been cut for women's organizations, like the sex trade workers with WISH; like the youth community and at-risk youth, where programs are being eliminated. The Studio has lost its funding from the provincial government. That all, in my view, has a direct impact on the local governments and how they must deal with the closure of these drop-in centres and programs, and so on.

The minister, of course, says that the local governments are not required to replace these programs, so therefore they're not seen to be off-loading onto local governments. I would simply say that I beg to differ. It is not my intention, of course, to bring up every program that the government has cut that, in my view, has impacted local governments. If I did that, we would never finish the estimates debate, and we would, I expect, disagree. The minister would give me the same answer and just say that local governments are not required to replace these programs, and I would get up and say that local governments are impacted by it, because their communities have to deal with the fallout as a result of the elimination of these programs.

I want to recap quickly the different points of view around that, and then I want to move on to other questions relating to the Community Charter.

The Community Charter looks at the opportunity, if you will, to give local governments more responsibility. The other side of that, of course, is that the Community Charter was supposed to give local governments revenue-generating opportunities as well. Let me ask the minister the question: what revenue-generating opportunities under the Community Charter that were to be given to local governments have actually come into play, and how are they being utilized by local governments if they exist?

Hon. M. Coell: A couple of comments for the member. The Community Charter doesn't give the municipalities or local government new revenue sources. There is some flexibility in fees that they could charge for services they presently deliver. Also, the local area financing of services gives them more flexibility in that area as well. We're working with them on the traffic fine revenue and also grants-in-lieu for Crown corporations.

It's early days now. The charter's been in place for three and a half months. We're working with them on a number of, as I said, the revenue-sharing opportunities. I suspect that will, over the next 18 months, come into play with traffic fines, grants-in-lieu for Crown corporations and other potential revenue-sharing opportunities between the province and local government.

J. Kwan: So there are no new revenue-making opportunities through the Community Charter, with the exception of perhaps some fees — fees which the local governments could apply and charge to their citizens formerly in any event. Yet local governments, we know, through the Community Charter and through the actions of the government and the policies of the government, do have more responsibilities. As I mentioned earlier, they also have impacts of downloaded effects in terms of program cuts and so on.

Okay. Now, in the area of fees, could the minister elaborate on what fees local governments have applied for the purposes of revenue-generating in the different municipalities?

Hon. M. Coell: We're not aware that any local governments have changed their fee structure using the Community Charter at this point.

J. Kwan: Okay. Presumably the minister is keeping an eye on that, and when these fees do apply, the minister would know, in which case we'll ask the minister the same question next year when we have estimates to see where things are at.

With respect to traffic fines, the minister says that the government is now working on a revenue-sharing formula with local governments on traffic fines. We know there is one that has existed. The government, of course, made the commitment that there would be an increase in revenue-sharing with traffic fines to local government and particularly for those moneys to be targeted towards policing.

Is it anticipated that in the next few months a revenue-sharing formula would be finalized with traffic fines?

J. Kwan: The answer has actually become more vague. The minister said in the next few months earlier. Now it's in the near future. We're still talking about in the next — what? — two to three months. Is that fair enough to say — that there will be a finalized traffic-revenue-sharing formula with local governments?

J. Kwan: Thanks very much. My apologies. I don't mean to be nitpicky about it, but my experience with other ministers is that when they use vague terminology, it generally means no commitment. I want to make sure that we're not sort of heading down that road. I don't think that's the intention of the minister, so I just want to get specific about that.

Is it the intention that the traffic fine revenues that would be shared with local governments would be targeted towards the policing sector?

Hon. M. Coell: It would be directed to local government for crime prevention and local community policing as well.

J. Kwan: Is the commitment what the government had promised earlier in terms of the transfer of dollars through revenue fines to local governments?

Hon. M. Coell: We in the ministry have been consistently following the new-era commitments.

J. Kwan: If that was true, the revenue-sharing-with-traffic-fines commitment would have been met already, but that's not the case. Am I assuming, then, from the minister's answer that the revenue-sharing on traffic fines would be the amount which the Premier had committed to earlier?

Hon. M. Coell: We had said that the number was 75 percent within our first term, and I believe we've met that commitment.

J. Kwan: What is the formula that is now being discussed with local governments in terms of the sharing of traffic fine revenues?

Hon. M. Coell: The ministry has been working with the UBCM, and the submission will be going forward to cabinet shortly.

J. Kwan: I understand the minister's answer is that the commitment is based on what the government said during the new-era campaign. We'll measure the announcement then, in a couple of months — on whether or not that is the reality with respect to that. We should also keep in mind, of course, that the provincial government had actually cut funding for local governments in the area of community policing offices.

That used to be split out in terms of…. The local government used to provide some funds and the provincial government used to provide some funds to these offices. Since this government took office, in fact, they have cut the funding for community police offices. Therefore, some community police offices, as a result of that, had to suffer greatly. Some of them had to close as a result of that situation. This traffic fine revenue-sharing might allow for local governments to put in, perhaps, more dollars towards community police offices to keep them operational. We do know that they are very important in the community, and they do play an incredibly important role in providing support and safety to our local communities.

In fact, just this weekend we celebrated a major anniversary with the community policing office at the Vancouver Public Library, where a variety of the community policing offices were on site to not only celebrate their successes over the years but also provide very important information to local community members. As well, as we know, they attract and utilize a very strong volunteer base, and that's what keeps a lot of these offices functioning in the way that they are. Of course, it was also, in my view, a way to thank the local volunteers in their respective offices as a celebratory moment but also to recruit more volunteers to come on board, as there's always a need for more volunteers. That was just Saturday when that celebration took place.

Now, grants-in-lieu was the other topic the minister raised. Again, can we expect ratification, if you will, on negotiations with grants-in-lieu? The government actually criticized the previous government on grants-in-lieu with the previous administration. Is it anticipated that Crown corporations will now be required to pay the property taxes to local governments?

Hon. M. Coell: The Minister of Finance is actually leading that discussion re grants-in-lieu. I can inform the member that B.C. Ferries is now paying tax but not grants-in-lieu. The B.C. Rail–CN deal would allow CN to now pay taxes. We're working with B.C. Hydro, but, again, the Minister of Finance is the minister leading those discussions.

J. Kwan: But is the minister involved in those discussions? I would imagine so.

Hon. M. Coell: Yes, the ministry has been involved, but as with all taxation, it's the Minister of Finance that leads those discussions. But we have been involved.

J. Kwan: When do we expect the discussions in the area of grants-in-lieu to be completed?

Hon. M. Coell: I don't actually have a time line, but as I said, B.C. Ferries has already hit that. I think different Crown corporations may hit that decision at different times. The long answer to that is there isn't a time line at this point.

J. Kwan: Well, the government, when they were in opposition, heavily criticized the previous administration in this area. In fact, the Premier, I recall, in several UBCM speeches made reference to this issue. One would have thought that the government would have expedited this issue in terms of action to address. But yet it isn't — it appears to me — a particular priority item for the government, given the fact that the government hasn't even set time lines in achieving that goal.

It really does, I think, highlight this issue, and that is that the Premier, when he was the Leader of the Opposition, rose time and time again to criticize the previous administration and made commitments about certain actions that he would take. Now that he's been in office as the Premier — it's now been over three years — action in these areas has been very slow in coming, to the point where I think that with respect to time lines and achieving some of these goals the Premier has not even set…. I think that really illustrates the lack of commitment, if you will, on the Premier's side in actually achieving these goals.

All right. We'll watch that as another area to see how the government's doing and measure that against the words of the Premier when he was the Leader of the Opposition.

Are moneys being provided to municipalities for them to produce the annual municipal reports as described in section 98 of the Community Charter? As we know, the Community Charter under section 98 requires local governments, I think, a much larger undertaking than formerly with respect to these reports. I'm curious to know whether or not the government is providing financial assistance to municipalities to produce these reports under section 98 of the Community Charter.

Hon. M. Coell: The ministry isn't supplying any financial incentive to municipal government. We've worked with the UBCM to provide a best-practices guide, and that will be phased in working with local government over a three-year period, but local government would be responsible for producing that report.

J. Kwan: Well, that's another area in which added responsibility has been put on to local governments. But additional resources are not there to match the added responsibilities, and that certainly is an area of concern.

Now, are there resources provided to regional districts so that they're more able to become familiar — educated, if you will — with respect to the amendments to the Local Government Act? We know that in these smaller communities, particularly where their resources are very limited…. In order for local governments to be fully informed about the impacts and ramifications of the changes to the Local Government Act, one might have expected the government might have provided some resources to these small communities or regional districts so that they could have the opportunity to fully grasp the impacts of the changes.

Hon. M. Coell: The regional districts, as well as other local governments, haven't received any funds to produce reports. We haven't had any complaints from either regional districts or local government about the added changes to reporting, but we'll continue to work with them to make sure they're able to do the work that they need to do with their own staff.

J. Kwan: Yes, the minister advised that there are no additional funds to local governments or regional districts, etc., for the purposes of reports.

What sort of support has the government offered to local governments, to regional districts, with respect to them being more familiar with the new act and how to comply with it? Now, the minister actually said on February 19, 2004: "We have worked with local governments around B.C., providing advice and support for the Community Charter, which took effect January 1." What sort of advice or support has the government delivered to local governments?

Hon. M. Coell: We've produced a best-practices guide. We've also produced a manual for regional districts. We've had a workshop where regional districts came. We have a website with materials on it. We do it on an on-call basis as regional districts or local governments need to directly interface with our staff. There's a lot of support there.

We're getting positive feedback from the UBCM at this point. You know, with the new Local Government Act and the changes there and then the Community Charter, there was a lot for local government and regional districts to absorb. I think we want to work with them to make sure that transition is smooth and beneficial to the local taxpayer.

J. Kwan: Yes, precisely. It is because of that that I asked the question about what sort of resources the government has allocated to local governments to cope with the many, many changes. We know there are no direct dollars allocated to local governments, but the government has introduced a number of best-practices guides and manuals and the like.

Now, how much money has the ministry allocated to provide this support and advice to local governments? Where does that show in the budget document as a line item?

Hon. M. Coell: It's not broken out separately anywhere in the budget book. Staff inform me that it was approximately $150,000 last year for charter implementation and will be approximately the same this year.

J. Kwan: That covers things like the website, the regional conferences, information, the best-practices guide, etc.? Are the best-practices guide and the manual produced by the ministry?

Hon. M. Coell: The best-practices guide and the manuals are generally produced by the ministry, with the help of the UBCM.

J. Kwan: The community transition and adjustment, according to the budget book, is receiving new funding of $2.4 million. What is that for?

Hon. M. Coell: The community transition and adjustment was a separate entity. It's now been integrated totally within the local government department, so there actually isn't a $2.4 million stand-alone operation. That operation is now totally integrated into the local government department.

J. Kwan: What was the fund targeted towards? What was its purpose and objective?

Hon. M. Coell: The stand-alone department was, as the member probably knows, to deal with communities that were in distress. Gold River would be an example of that — and Tahsis. They would be planning for economic diversification. That's still going on within the ministry. We're working with Port Alice right now to see how their economy can be diversified. That's being done within the ministry as well.

J. Kwan: If it's no longer a targeted item under the community transition adjustment line item but is being rolled into local governments, is it then the case that under the budget for local governments, the specific amount is targeted towards communities in transition?

Hon. M. Coell: One of the interesting things, if you look at the history of some of the cities or communities that have been in distress, is that there are sort of peaks and valleys as the economy goes throughout B.C. in the last probably 20 or more years. What we've done is developed an expertise within the ministry so that when a community comes into crisis — and as I said, Port Alice is one right now that we're dealing with…. A lot of the expertise that we learned when dealing with Tumbler Ridge and Tahsis and Gold River we now have within the ministry, so when a community does come into crisis, you've got the people there who can be assigned to work on that project for a period of time. After that crisis passes, those people can go back and work on other local government projects, but the expertise is right in the ministry now.

J. Kwan: The definition for communities in crisis — how does the ministry or the minister define that? Is there a set of criteria which the ministry uses to evaluate communities and then deem a community to be in crisis? Then presumably those communities that are in crisis would be able to access additional funds from government to deal with a transition period. That was the purpose for which funds were set aside to deal with communities like Gold River and others. Is that the case now with the government?

Hon. M. Coell: I'm just drawing on past experience. I think in British Columbia, from time to time, communities do get distressed. They're usually resource towns, for the vast majority. They're either mining or logging, where there are cyclical problems with that industry, or a mine closes down because it's complete.

In the past, as is now, our staff would work and put together an action plan that would try to diversify the economy in the area, working with the mayor and council or a regional district if need be. I think that what has happened in the past would happen now. The minister would then take that plan forward to Treasury Board and look for contingencies to develop that plan. I'm told that's what has happened in the past and how we would deal with it presently.

J. Kwan: So as it stands now, there are no dollars within the ministry's budget that are dedicated towards communities in transition.

Hon. M. Coell: I think the professional staff we have in the ministry are able to step into those positions. There are staff there to deal with communities that are in crisis. Once that plan and successful implementation have been developed, those people would go back and do other duties. As the member knows, there are always lots of challenges that face local government, and they vary from time to time. You have to have a broad-based expertise in your staff, which I truly believe we have in this ministry.

There are no funds, as I said in the past. Generally that plan would go forward to Treasury Board. Treasury Board would help fund that, and I suspect that's how we would deal with a situation, if need be.

J. Kwan: On page 22 of the 2004/05-2006/07 Service Plan it states that a government strategy is to "allocate unconditional grants to communities." That's the second bullet under "Strategies" on page 22. Could the minister elaborate on this — for example, how many grants have been allocated to communities, what communities have received these moneys and where these grants are represented in the budget document?

Hon. M. Coell: Is the member looking for the small community protection grants and the regional district basic grants? There are just the two of them.

J. Kwan: Thanks very much. That's good, then. I just wanted to canvass to see whether or not there have been changes with respect to the unconditional grants and the local communities.

On September 26, 2003, Lesley Watson, who's a senior policy analyst for the local government department of the Ministry of Community, Aboriginal and Women's Services, led a Community Charter seminar titled "Striking a Balance: Authority versus Accountability." At this seminar, concerns were raised by local government representatives over the possibility of municipalities being able to incur up to 20 percent of revenue without having gone to the electorate. I'd like to canvass this issue a little bit with the minister.

What provisions have been made to facilitate greater citizenship involvement in matters of public concern such as municipal borrowing?

Hon. M. Coell: I think I'll try and put this as simply as possible. We've given local government some new authorities, and we want to make sure they are accountable. Working with the UBCM, there were a number of things that have been put in place. There will be an annual progress report and annual meetings with regard to the municipal progress report with their citizens, and there would have to be adequate notice of an open meeting where people can come and hold elected officials accountable for what they had set out to do in the annual progress report. We'll continue to work with the UBCM, and I suspect that may be modified — and possibly expanded if they wish — to how the notice and the meetings and things could be added to that as well.

J. Kwan: I just want to raise some specific issues around this that have gone on in our communities. I think it is fair enough to say that the Community Charter is, and will only be seen as, a positive step so long as people have faith in the processes outlined in the Community Charter for democratic decision-making and openness and accountability.

Issues arise when processes are deemed to be corrupt or unfair, therefore lacking in democracy. We have a situation that I'm aware of and that's been brought to our attention in Salmon Arm, where issues of accountability have been brought under the microscope, if you will. Let me just lay this scenario out for the minister's consideration and get his response.

Salmon Arm, as we know, is one of the first municipalities to test a new alternative approval process outlined under the Community Charter. This is section 86 of the Community Charter. Salmon Arm is trying to build a new courthouse and city hall. So far, the process has certainly been labelled as a disaster by some members of the community. In fact, Jane Petch, who is a

former Salmon Arm city councillor, wrote to the opposition detailing the following. For the record:

This is one case in point that I am bringing to the minister's attention. The minister may well be aware of the situation already, because this happened a little while back. I suspect this won't be the last problem we hear in the local communities on such issues.

On that note, what is the minister doing to address specific issues such as this that arise from the Community Charter in our communities?

Hon. M. Coell: The member may be aware of this, but the counterpetition was actually started with the previous government in, I believe, 1998 in the Local Government Act. The threshold has changed a bit, but not significantly.

I am aware of some of the controversy around Salmon Arm, as the member suggests, but in general the implementation of the Community Charter and the Local Government Act together has been running very smoothly. We're getting a lot more positive comments than we are negative, by any stretch of the imagination.

J. Kwan: I would say that's significant in terms of a change because if the 5 percent threshold was used, then in this instance the counterpetition would have been successful instead of failing. Having said that, it's a doubling of the threshold, so I would say that's significant.

Setting that aside for a moment, there are these situations…. Well, in Salmon Arm a host of issues were raised by this former councillor. Has the ministry done anything relating to this issue? If so, what has the ministry done?

Hon. M. Coell: I think what the ministry tries to do is believe in autonomous local government. We don't intervene in local disputes and haven't done so in the past. We do realize that many things are controversial. We do on a regular basis provide information to citizens and to local government on how best to use their resources and the tools they have, but we don't have the staff to intervene in disagreements within communities.

J. Kwan: Well, no. Actually, that's not exactly true. The minister intervenes where the minister wants to intervene. In the case around Quinsam Coal that we established earlier, the government intervened by redrawing the boundaries for Quinsam Coal. So the government intervened in that sense directly.

In this instance, where there are issues with respect to a public process…. I'm not talking about the government overriding the local government's decision on whether or not they should, in this instance, engage in building a new city hall or a new courthouse. I'm talking about where irregularities occur or issues of process occur, and they're raised. What action is the government taking to address those? It's an issue around fair-

ness. It's an issue around our democratic rights. All of those issues, I think, are important issues where the government may well have a role to play — not to override local government's decision-making authority but to address issues of concern raised by citizens regarding process, and particularly processes that, in these allegations, are flawed and create, say, a bias or an unfair situation.

Hon. M. Coell: The ministry isn't aware of any irregularities from the Salmon Arm counterpetition initiative.

J. Kwan: One irregularity I would bring to the minister's attention from the letter that I've just put on record is this. Let me just find the passage around this. It states that the district administrator is going through the names and deleting them. Apparently, that's public in terms of that action. Mr. Chair, 1,470 names were collected over the five weeks, and 1,200 were needed. According to the morning's local radio, the administrator only has to delete another 40 names before declaring that the alternate process has failed. If this is true, I would say there is a bit of an issue here in terms of irregularities around the process.

It is based on these kinds of allegations that I am asking whether or not the minister has looked into this situation to see if the irregularities have actually occurred and how to address allegations as such — to set the record straight on what really is going on and whether or not there are problems associated with that process. What work has the ministry done in that regard?

Hon. M. Coell: Local governments have to make sure they follow their bylaws, or else they can be legally challenged and struck down by the courts. As I said before, we're not aware of any irregularities that have been challenged in the court, but if the member wished to give me the letter that she has received, I would have staff look into it for her.

J. Kwan: There are a number of issues here. The one example that I use from this former councillor highlights, I think, one potential irregularity. Whether or not the administrator is correctly eliminating names from a petition is at question. Whether or not those names are valid for consideration is a question as one example that comes from this letter. I would say that the process with respect to the collection of names through the city hall process…. People showed up at city hall and were told there was nobody there to answer questions, etc. It raises matters of concern around the process when such allegations are identified, and the question from my point of view is whether or not the ministry has taken action to look into this situation.

Maybe all these allegations are false, but maybe they're not. Maybe they're valid, and maybe there are issues there. That might not only just require action from the government side in dealing with the Salmon Arm situation but may well require action for the government's consideration in terms of the application of the act itself and what rules and guidelines should be in place to prevent such problems in the future. That might require government to do something.

You know, given that the government actually does have support and $150,000 allocated to support local governments with respect to the implementation of the Community Charter, I would think this is a very important case example for the ministry to look into and to see what work needs to be done to address the problems that have surfaced.

I'd be happy to pass the document to the minister for the minister's consideration. We would of course double-check, as well, with the individual who has actually made this information public, to make sure that the individual is okay with that. Then I would ask the minister or the ministry to specifically follow up with this particular individual around these concerns as well. I will do that.

Now, the other question that I want to put to the minister is around regulations related to the implementation of the Community Charter. Have the regulations been in place? Let me ask that. And what other regulations have yet to be approved by cabinet? Are there still a bunch of them that have yet to be approved by cabinet related to the Community Charter?

Hon. M. Coell: There actually are extensive regulations on our website now, and there are very few more that will be developed.

J. Kwan: The majority of the substantive regulations are now in place — is what the minister is saying. Okay.

Now, on the issue around financial borrowing limits, a short-term borrowing limit regulation was signed on October 24, 2003, effective for January 2004. The regulation states that the short-term borrowing limit is $50 per person in each municipality. How are financial borrowing limits set? How are they being determined?

Hon. M. Coell: I wonder if the member could clarify for me whether she would like an answer for short-term borrowing or long-term borrowing. I wasn't clear.

J. Kwan: Well, my first question was actually just generally how borrowing limits are set, how they are determined. Then my second question was related to short-term borrowing. What constitutes short-term borrowing, as an example? I do actually want to know the difference.

Hon. M. Coell: From our perspective, five years and under would be short-term borrowing and over five, long-term. We are working with the UBCM to see a shift from assessment to income-based per local gov-

ernment. This is something that the Municipal Finance Authority and the UBCM have been asking government to look at for a long time. No decisions have been made at this point, and we're still working through what potential changes could be for long-term borrowing for them.

J. Kwan: The $50-per-person regulation that came out on October 24, 2003, to be effective for January 2004 was $50 per person in each municipality. How did the government come up with the $50 figure?

Hon. M. Coell: I think the change was to put it in regulation so that it can be more flexible. If you lock it into legislation, then you have to change legislation every time that figure changes — whether it would go up from $50 to $52 or $55 ten years from now or three years from now. It gives you more flexibility.

J. Kwan: Where did the $50 figure come from? Was it based on some sort of formula?

Hon. M. Coell: The ministry dealt with local government treasurers, the UBCM and the MFA to come up with that figure. They felt it was appropriate at this time.

J. Kwan: That was done in conjunction with UBCM. They came up with that figure, and they agree with that figure.

Hon. M. Coell: I don't have that information, but I will get it to the member.

J. Kwan: In terms of long-term borrowing — that was one of the issues raised in the Salmon Arm courthouse/city hall project — did the minister say and did I hear the minister correctly that he is still working with UBCM to establish long-term borrowing and what that would look like or what it would mean?

In the 2004/05-2006/07 Service Plan it states as part of the strategy: "Support pooled borrowing arrangements through provincial oversight of local government long-term borrowing and related transactions." In terms of this strategy, what work is the ministry doing, and what work is the ministry specifically targeting to achieve with respect to that? Is it to facilitate local governments where they have come to an agreement for a long-term borrowing initiative, and the government would work to facilitate a better rate by pooling the long-term borrowing needs of various municipalities? Is that what it's targeted towards?

Hon. M. Coell: For local government in British Columbia, all long-term borrowing is done through the Municipal Finance Authority. Because it's pooled, they get better rates, and they actually have a great credit rating and have had for decades. There is provincial approval as part of the…. I would say it helps their credit rating if their approval and their pooled borrowing is approved by the province.

Hon. M. Coell: Yes, it's virtually the same process. We wanted to make sure that they kept their great credit rating. We can assist them where innovation is helpful but allow them to continue with the structures that they have and to keep that credit rating.

J. Kwan: That's interesting, because in the '04-05 to '06-07 service plan strategy, it actually states: "Support pooled borrowing arrangements through provincial oversight of local government long-term borrowing and related transactions." It makes it sound almost as though that's a new thing the government is doing, as a result of the Community Charter and so on. As far as I know, I think that was something the ministry had been trying to do for some time with local governments. Well, it's just interesting to note that one of the key strategies is something that's already been going on for some time with local governments in terms of the work that the ministry does. I just want to point that out.

There's been some discussion of federal transfers to municipalities in the form of GST rebates and gasoline taxes. The gasoline taxes issue has now all but disappeared, it seems to me, because there's been no…. It hasn't disappeared insofar as this: there's been no commitment from the federal government on that. The GST rebate question has certainly been announced by the federal government. Now, what is the status of possible federal transfers to municipalities in terms of GST rebates, in terms of direct transfer? What is the status now, since this announcement, with respect to the GST rebate question?

Hon. M. Coell: The province is working with the UBCM to prepare a response to the federal government's new deal for cities. We haven't completed that yet.

J. Kwan: Sorry, Mr. Chair. I didn't hear the last bit. Did the minister say: "We have completed that" or "We haven't completed"?

Hon. M. Coell: That hasn't been completed yet for response to the federal government.

J. Kwan: Is the minister expecting that work to be completed soon — before the election is called, for example? Or is that something that would have to be dealt with after the election?

Hon. M. Coell: The member may know better than I when the federal election is being called. I suspect that it'll be after the…. Unless the federal election is this time next year, I think it'll have to be done after the federal election.

J. Kwan: No, I wouldn't know better than the minister. The federal Liberals are cousins of the provincial Liberals, although they say they are not related.

J. Kwan: Ex-in-laws, I might add. There's been a quick divorce, shall I say. Some might say that it's painful. Others would say it's…. Anyway, I better not say this.

J. Kwan: That's true. We never get to pick our relatives. That is true. Let me just say that in this instance, they are now your relatives, and let's just leave it at that.

There's an issue with respect to the GST rebate, particularly for the school districts. Rightfully, I think they make the argument that school districts should also have these rebates, particularly in the area of education, but there's been no announcement from the federal government on that. Is that something that the provincial government supports — that is, for the GST rebate to apply to school districts as well?

Hon. M. Coell: Staff advise that if there had been any work done on this, it would have been the Ministry of Finance that would have done it.

J. Kwan: I'm going at it from all angles. I raised the issue with the Minister of Education as well, and I think it was the intention of the Minister of Education to raise the matter with his federal counterpart.

I want to raise it in this context as well, given that a school district really is part of a local government, albeit it's different in terms of where they get their moneys from in terms of their areas of responsibility. Still, I look at the school boards as very much part of local governments. That's the way I sort of see things. I would also urge this minister to raise the same matter with his federal counterpart in that context — for school districts to have their GST rebates as well.

The 2004-05–2006-07 Service Plan states that 70 percent of aboriginal people live off reserve, and aboriginal standards of living are 20 percent below that of other BC'ers. Could the minister advise how the needs of off-reserve and urban aboriginal people will be accommodated by local governments charged with new powers of taxation and spending?

Hon. M. Coell: The member may wish to elaborate, but I would view the charter as it doesn't differentiate between race, whether someone is on or off reserve. If they're a citizen of Vancouver or Victoria, they have the same rights as everyone else under the charter.

J. Kwan: Yes, they have the same rights, but I'm wondering whether or not there are any specific targets in terms of new powers of taxation and spending towards off-reserve aboriginals. We also know that with the aboriginal community, certainly in my own community we have a very large off-reserve population in Vancouver and also a lot of issues, as well, and challenges that those of the aboriginal community are faced with.

What specific powers of taxation and spending for local governments could be utilized under the Community Charter targeted towards that population base is what I'm wondering about.

Hon. M. Coell: The local government can fund any number of projects that they deem appropriate for their community, as long as it doesn't violate federal or provincial statute. There probably are issues from time to time that local government has become involved with. I'm thinking of the Vancouver Charter and the city of Vancouver, who are very much involved with some different programs than the rest of the local governments in the province.

I think the local governments, no matter where they are, have the ability to do that. They just have to deem it necessary and something they want to do in their communities.

J. Kwan: What is the status, by the way, of the city of Vancouver with respect to the Vancouver Charter and its application to the city versus the Community Charter? Have they made a decision whether to opt in or opt out?

Hon. M. Coell: There have been discussions with the city of Vancouver. To our knowledge the city of Vancouver hasn't decided whether they would like their charter revised to represent the Community Charter that all other municipalities have at this point, but we're open to discussions with them.

J. Kwan: I don't think the city of Vancouver has made a decision one way or the other. I wasn't sure if I missed the minister's answer on whether or not they have made a decision. My understanding, then, is that they have not made a decision, but that the minister's open to suggestions. Is there a time limit which they can make up their mind by?

Hon. M. Coell: No, I think that's sort of an open-ended discussion that we'd always welcome with the city of Vancouver.

J. Kwan: I'd like now to move to the area of aboriginal, multicultural and immigration issues, Mr. Chair. For the benefit of the House, preceding this government coming into office, the aboriginal people in

British Columbia were administered by their own minister and ministry. This was the former Ministry of Aboriginal Affairs, which was dissolved in 2001. Under the new government, Aboriginal Affairs was split between the treaty negotiations office of the Attorney General and the Ministry of Community, Aboriginal and Women's Services.

Following the cabinet shuffle in January of this year, multiculturalism and immigration now have a minister of state in the ministry. Since the cabinet shuffle, there was another new event in which the former Minister of State for Immigration and Multicultural Services was fired. I think that ministry of state, immigration and multicultural services, now falls under this minister's rubric of responsibilities. There is no Minister of State for Immigration and Multicultural Services. Aboriginal services are lumped together with the operating costs of immigration and multicultural services, but they are not reflected in the minister of state's title.

Could the minister advise on the non-existence of the Minister of State for Immigration and Multicultural Services? I presume it's a temporary thing, and so for the interim, this minister is taking over that responsibility. That's an interim thing. Presumably, somewhere along the line a new Minister of State for Immigration and Multicultural Services will surface. Given that, on the question around operating costs of multiculturalism and aboriginal issues being lumped together, could the minister please advise what is the reason for that?

Hon. M. Coell: It's actually not new. Since the creation of this ministry, they have been together.

J. Kwan: No, but it's new under this government. It's not new prior to 2001. In that context, it is new under this administration. That's my question to the minister.

Hon. M. Coell: I'll give you a couple of examples. I think a significant amount of federal-provincial responsibilities and overlap with both areas — also, the integration into both urban and rural society…. There is a connection between work and anti-racism.

I know the Premier would probably be better to answer this question in his estimates than me, as to the creation of the ministry and why it was set out like it is. I can tell you from being a minister for three months and working within the ministry that it fits well. When you see community, aboriginal and women's services, they're all related around communities — all related around creating healthy, strong communities for British Columbia, but all are pieces of it. As the ministry is something that the Premier, in his job as Premier, creates — ministries — that probably would be a good area to canvass in his estimates.

J. Kwan: In addition to the 2001 change in terms of lumping aboriginal affairs issues into the Ministry of Community, Aboriginal and Women's Services…. Actually, after the cabinet shuffle, aboriginal services were lumped together with the operating costs of Immigration and Multicultural Services. There was a 2004 letter to the former Minister of State for Immigration and Multicultural Services which contains no reference to aboriginal services. But the letter from the Premier to the minister actually now talks about aboriginal services, so there is a distinction even as recently as the cabinet shuffle in terms of that. Aboriginal services are now lumped into the area of multiculturalism and immigration. What's the rationale for that?

Hon. M. Coell: The organization in the blue book relates to the responsibilities of a single department. The budgets are separate. On page 62 of the estimates I think it explains that.

J. Kwan: Well, it's just curious, when you look at the letters from the Premier to the respective ministers, how that differs, really, and how the Premier addresses aboriginal issues with a letter to this minister but not to the Minister of State for Immigration and Multicultural Services. But the operating costs of that have been lumped together. When you see that, it's strange that the former minister of state would actually not have any reference in his letter from the Premier about that, yet the funding is lumped into that line item. It kind of, I think, speaks not very well of the government's view on aboriginal services issues.

Mr. Chair, I'm not sure what that is, but there's a signal somewhere. Maybe somebody….

J. Kwan: Uh-oh. We now have a troublesome situation, Mr. Chair, because the Solicitor General says we don't know whether or not that noise would explode, and he's the Solicitor General. I think he may have a bit more authority than you do, Mr. Chair.

J. Kwan: The Solicitor General is now going to defer to the Chair. Okay. All right. Well, let's see. I suspect that the Chair is right, though.

Anyway, that's just a strange kind of difference in the government's attention to matters of detail that I think does not speak well of the government in the Premier's letters to the respective ministers.

Now, according to the ministry's website, the only programs and services that the aboriginal component manages are the First Citizens Fund and the Native Economic Development Advisory Board. Is that all that falls under the aboriginal component of the ministry?

What other programs may not be listed in this line item that we may not be aware of? Are there other programs?

Hon. M. Coell: Just to reiterate, the budgets aren't lumped together. They are separate, and the minister of state is only responsible for multiculturalism and immigration.

I thank the member for the additional question, because there are some exciting programs that are initiated through this ministry. The aboriginal youth BEST is a program that provides training or a series on aboriginal youth in B.C. communities to prepare them for successful development of their own entrepreneurial ideas. The aboriginal employment partnership initiative is to remove barriers, enhance opportunities for aboriginal employment and economic participation. It's managed through the Métis Provincial Council of British Columbia and is a program for all aboriginal people.

The first citizens forum is an annual one-day event hosted by the Premier, attended by cabinet, that provides a cross-section of people from the aboriginal community to discuss with the Premier and cabinet many issues.

We have a program for Métis off-reserve. There is also the First Citizens Fund, which we doubled the amount of money in, that does a number of things from the business loan program to the friendship centre program to the student bursary program to the elders transportation program, and the heritage, language and cultural program. There's also aboriginal business service centres through that program. The B.C. participation in the Urban Aboriginal Strategy also started in 2002, and we're working with the federal government and the city of Vancouver on initiatives.

So I think there are some really good and positive initiatives that have been developed over the last few years, some that the previous government brought forward with our government. From my perspective as minister, we're here to lead and to innovate and to work with first nations leaders to develop new programs. As you can see, there have been some developed and some extended from the previous government, which I think are just starting to show some real benefits to the first nations and aboriginal community.

J. Kwan: Is that a full list of all the programs for the aboriginal community for the ministry?

Hon. M. Coell: No, I just touched on some, but I would provide the member with a full inventory.

J. Kwan: Yes, I would appreciate that. I would also appreciate the objective of the program and how much has been allocated and when it comes into effect and as well, of the programs that have then been eliminated, what those are. Presumably, there has been a reallocation of funds or something within the ministry. If we could get a list of that as well — the programs that have been eliminated and how much used to be in those other programs, I would appreciate that. I see the minister nodding, so I'll just take that as a confirmation from the minister that I can get that information. That would be great. Thank you very much to the minister.

The aboriginal programs also list…. Actually, let me ask a broader question. Has the budget for aboriginal services and initiatives gone up under this ministry since taking office, or has it gone down?

Hon. M. Coell: The budget has gone up slightly. What I would do is provide the member a list of where it's gone up. The First Citizens Fund — we doubled that. There are a number of other changes, and I'll provide a list of the areas and the budgets for the last three years, if the member would like.

J. Kwan: Just a quick comment in terms of the First Citizens Fund. The amount of dollars that actually flow to the aboriginal community from the fund…. It's not the fund itself; it's the interest coming from the fund, which I think explains why in the aboriginal directorate amount it's actually a reduction of $1 million to $650,000. Presumably, it's the interest amount that has actually gone down because interest rates are now a record low. Really, the fund is not accessible by the aboriginal community, so it's misleading to say the fund has actually gone up. The actual dollars that flow to aboriginal communities have gone down because of that.

J. Kwan: We were talking about aboriginal programs and the funding, etc. Just to recap quickly, as mentioned prior to the dinner break, the First Citizens Fund…. While the funding might have increased in the fund itself, access for the aboriginal community in terms of dollars to support aboriginal programs comes not from the fund but rather the interest that the fund earns. Given that the rate of return is very low these days, it appears to me the fund has gone down rather than up because of that.

Presumably the list that the minister is going to give me in terms of the services will outline clearly how many dollars are being accessed by the aboriginal community and what programs are being supported. Because the dollars have actually gone down because of the interest rate issue, then presumably we'll also know what programs have been impacted as a result of that.

Hon. M. Coell: Actually, the government put an additional $36 million into the First Citizens Fund. The

budget for moneys being drawn out of the fund in '03-04 was $3.9 million, and this year it is $4.2 million, so there is a slight increase. The member is correct that the fund has doubled, but with the interest rates as low as they are, the amount of money is significantly decreased. We're at 40-year lows in interest rates. That isn't going to last, I would suspect, and that fund will start to generate more money as the interest rates go up. There is a slight increase over last year of about $250,000.

J. Kwan: Could I get a breakdown of what programs it funds? Presumably there's a list of the aboriginal services programs and the funding where the minister's going to outline its objective and how much money it's receiving — if the minister would provide that information for this fund as well.

Hon. M. Coell: I could give that list to the member right now, or I could supply it. It's the business loan program, the friendship centre program; the student bursary program; the elders transportation program; the heritage, language and culture program; the business advisory support services centre; and the Native Economic Development Advisory Board.

J. Kwan: The fund as I understand it, the First Citizens Fund, is a lending program for first nations people who may not otherwise be able to borrow money from the banks, given the difficulties that first nations people face in obtaining loan collateral. The fund is a trust in which the interest accumulated from the fund is made available to first nations people. Am I right still on the basis of that in terms of the purpose of the interest that's generated? Is it actually not a grant program as such but rather a loan program?

Hon. M. Coell: The member is essentially correct. The First Citizens Fund funds the list of programs that I mentioned earlier. One of those was the business loan program. It provides support to aboriginal entrepreneurs for creation, expansion or upgrading of aboriginal businesses. The program is open to all types of business but will not finance revolving lines of credit or refinance existing commercial loans. The business structure can be a sole proprietorship, a partnership, a registered company or a joint venture organization, as long as the business is at least 51 percent aboriginal-owned.

A lifetime maximum loan amount is $75,000, of which 40 percent can be forgiven by the fund. The contribution is disbursed in instalments on a pro rata basis over the term of the loan. It's a separate fund that is supported by the First Citizens Fund.

J. Kwan: The minister said the fund, which is the interest portion, had increased by about $250,000. What is the maximum loan amount available to first nations for this fund?

J. Kwan: On that basis, is it the case that an individual could reapply if they haven't reached the maximum amount?

J. Kwan: What proportion of the fund revenue was used last year in the form of loans?

Hon. M. Coell: In '03-04, $2.8 million of the $3.962 million was used for loans, and it's anticipated that it would be in the same ballpark this year.

Hon. M. Coell: The other programs were funded with the dollars that were remaining. The friendship centre program; the student bursary program; the elders transportation program; the heritage, language and culture program; the business advisory support services centres; and the Native Economic Development Advisory Board were funded with the remaining dollars.

J. Kwan: All of the funds were utilized, then. The special account description of the First Citizens Fund in the budget estimates for this year has changed from last year. Last year it said that the account provided "financial assistance through loan guarantees and transfers." This year the description makes no reference to loan guarantees. Why is that?

Hon. M. Coell: Regardless of the description in the vote, it hasn't changed.

J. Kwan: Loan guarantees are still there in the same amount that they were in the previous year.

Hon. M. Coell: I'm advised that we haven't done any loan guarantees. They've been loans with forgivable portions of them — the 40 percent forgivable.

J. Kwan: Maybe that's why there is a change. I'm just guessing, because it has never been utilized. It sounds to me like — and the minister can confirm — nothing has changed from the program insofar as its application from last year.

J. Kwan: The special account description in the document also states that the account "provides funds for the Native Economic Development Advisory Board." This was not included in last year's document. What is the reason for this change?

Hon. M. Coell: The Native Economic Development Advisory Board was established in 1988, and there has been no change. It is still as it was last year.

J. Kwan: On the allocation of the funds, a portion of which goes to loans and a portion of which goes into

these other programs, friendship centres, etc., and the determination for what portion goes where…. How is that determined? Is that determined on the basis of the uptake of the loans and whatever remaining goes to the other organizations, or is it the other way around? How does that work?

Hon. M. Coell: The Native Economic Development Advisory Board provides policy, program and service advice to the minister with regard to the programs provided. The staff, of course, work with them. Over the years there is sort of a base rate in the friendship centres and student bursary, and they have been fairly consistent over the years. There have been some one-year projects brought forward by different groups that have been funded, usually through the policy advice that we get from the Native Economic Development Advisory Board.

J. Kwan: So the anticipation is that the amount of dollars for the loan is going to be about the same amount for this coming fiscal year as it was last year. Is that the right assumption?

Hon. M. Coell: With the business loan program, approximately 150 loans per year. Last year approximately 450 jobs were created provincewide through that loan process.

J. Kwan: When does the person or the business that borrowed the money have to start paying back toward the loan?

Hon. M. Coell: It would vary as to the business plan presented. It might be a couple of months, or it could be as long as two years. That would all be taken into consideration during the development of the business plan and how that person or group of people plans to start repayment and a time frame for repayment.

J. Kwan: Just whatever the current rate is. The only provision, then, for this loan is that it allows access for aboriginal people, whereas they might not otherwise be able to access such a loan from a commercial banking agency. That's the only difference, then?

Hon. M. Coell: I think the difference is that there's the forgivable portion of it up to 40 percent that you wouldn't get from a bank. At least I'm not aware you can get that from a bank. I think that's why people appreciate and use the services.

Hon. M. Coell: No, it's based on the assessed needs of the program and the project and their ability to pay it back.

J. Kwan: I actually don't have a problem with this kind of program. In fact, there were such loan programs for community economic development initiatives with the previous administration — particularly at lower interest rates or no interest, as an example. So I don't see it as a problem.

The government, I know, has been on record…. In fact, more recently the Minister of Small Business and Economic Development just reiterated this and said that this government does not support giving a subsidy to businesses. In this instance with this particular loan, is it deemed to be giving a subsidy to small businesses or to business people in the aboriginal community?

Hon. M. Coell: I think there are two issues. One, it's very much seen as capacity-building, and the other is that it's really levelling the playing field after years of aboriginal people not having access to loans that would normally be accessible throughout British Columbia.

J. Kwan: At the end of the day, though, according to the government's definition…. Maybe I should ask this question: what is the government's definition of not giving a subsidy to private business?

Hon. M. Coell: We view this in this ministry as not being a subsidy. It's capacity-building, definitely levelling a playing field, allowing aboriginal participation in the community that hasn't been there for the history of British Columbia. Aboriginal participation in business and the community hasn't been a level playing field or equal to other British Columbians, and this is very much a program to address that.

J. Kwan: As I said, I actually don't have a problem with such a program to support individuals and community groups to start up these kinds of things. In fact, we actually had a full ministry under the previous administration targeted towards exactly that — for individuals. Not just for the aboriginal community, but for individuals who traditionally face multiple barriers, are not able to access loans from the bank and so on — to assist them in some way to devise a business plan and then to get a business up and running…. That was deemed to be positive from the community economic development initiatives point of view.

So this is similar to that of the previous administration's approach. Yet this government heavily criticized the former government with that kind of approach and claimed that it was somehow giving an unequal-level playing field and that it created a subsidy for the pri-

vate business. In fact, as recently as this week and last week, the Minister of Small Business and Economic Development was on record again to say that this government does not provide for subsidies to private businesses.

In some ways, one could argue from a business standpoint that this program does exactly that. As I said, I don't see it that way. I think the government, though — some members of the government — would see it that way, and there is a contradiction in terms of the application of policy here with respect to that.

Forty percent of the fund, of the loan, can be forgiven, and that is determined on the basis of need. Are there set criteria in making that determination?

Hon. M. Coell: The loans are managed by the aboriginal capital corporation, and that has been devolved to them. I don't have their criteria with me, but I will get it for the member.

J. Kwan: I want to be very clear that this is a good program for supporting aboriginal people with respect to getting into small businesses.

Now, for this government, how will this fund be protected in the future, seeing as it has lasted, actually, for some time? It was started, I believe, back in the seventies and is very valuable to the aboriginal community. How will it be protected in that sense in the future to ensure that this program remains and exists for the aboriginal community?

Hon. M. Coell: The member, I think, knows that the fund has been in existence since the late sixties, I believe, and is legislated. It has a legislative framework. I think from our perspective as government, we doubled the amount of money in the fund, so there is the government commitment from this government. Future governments could put more money into the fund, but you could only see that fund change through legislation.

J. Kwan: According to my calculations — and maybe I don't have the correct figures — the interest amount is about $2.8 million. If you divide that amount by the — I think the minister said about 150 — loans that were provided from this fund, that comes to about $18,600 per loan, which exceeded the maximum amount, which I think the minister said was $7,500.

J. Kwan: Oh, $75,000. Okay. What was the average amount for the loans, generally speaking? Is there an average? What is that amount?

Hon. M. Coell: I'll have to get that number for the member. We'll go to the capital corporation and ask them — probably, I think, for a listing of the dollar figures per loan, because I think getting an average might not have much meaning if there are some at $75,000 and some at $5,000. We'll get you that information for the 150 and last year's.

J. Kwan: It will be interesting to note. As well, if the minister has this information, I will be interested in the answer but, if not, for the minister to seek the information about how many applications are received each year. It's interesting insofar as this. It seems the number of loans remain consistent, and it seems that the amount of dollars for the total loan program is fairly consistent as well. Is that because the number of applications is consistent every year for about the same amount of dollars? What's going on in there? That would be interesting.

Is it the case that the decision-makers for the loans have a tough time in that they don't have enough moneys within the loans to make these loans? Therefore, they would have to turn down a number of applications in order to keep within budget, so the number of loans is relatively consistent year over year. I'll be interested in finding that out. Maybe the minister has the answers to those questions already.

Hon. M. Coell: We haven't heard from the capital corporations that they need more money at this point, and I think they would tell us if they did.

J. Kwan: I will be interested in finding out, in terms of how many applications are received and those applications that are turned down because the business case is perhaps not viable. Presumably, those are the reasons they're turned down, but not because of budget constraints. I would be very interested in finding out that information from the minister.

Hon. M. Coell: Just to add to that, what they do is try and work with people to bring the business case up so it is acceptable. The idea isn't just to turn someone down if their business plan doesn't work. You want to help work with them and make sure there is something there that will create jobs and employment and be successful.

J. Kwan: Then presumably, on that basis, the number of applications that are turned down would be very small, if any at all. It sounds to me like that was exactly what the ministry of community economic development and cooperation used to do with that — precisely, trying to work with disadvantaged communities and individuals in developing a business plan that would work and be viable and trying to give them some startup support to get economic activities going. It was precisely on that basis that those programs were developed. So at least one sector has survived this no-subsidy-to-business lens that this government had so vehemently pursued when they were in opposition. I'm glad at least one sector survived that.

I would venture to say that the view which the minister takes with this particular program is a worthwhile view to be adopted in other disadvantaged

communities and groups, as well, in order to promote economic activity, sustainability and, hopefully, options for individuals who normally don't have options before them.

I'll be interested to find out how many people are turned down. Hopefully, the number would actually reflect that. It would be great if more dollars are not needed, and that's why the numbers are consistent. But if it is the case that more dollars are required and there is potential to enhance access to this fund for economic activities in the community in support of the aboriginal community, I certainly hope the minister would consider that.

The special account description says the loan is now available to "aboriginal people who are residents of British Columbia," whereas last year it said "members of first nations who are residents of B.C." It's a slight change in terms of its wording. My question to the minister is: what is the reason for this change? Is there anything substantive from this change in language?

Hon. M. Coell: The change is to expand the definition from first nations to all aboriginal people so that there would be more people eligible to access the fund.

J. Kwan: Is it the case that last year the Métis community were not eligible to apply for the loan but that they are this year?

Hon. M. Coell: There isn't any substantial change. It's just a terminology change.

J. Kwan: The last answer that the minister just gave differed, it appeared to me, from the answer before that. It sounded to me like, "The language change was to allow for more people to qualify," was the first answer that the minister gave. Then he said: "No, there isn't actually anything substantive. It's just language, so it doesn't really mean anything substantively in this application." Which is it?

Hon. M. Coell: What we've done is brought the language into line with what we were doing in the program, and this will allow other people to see that the program is available to them.

J. Kwan: So the application of the programs in practice had really been open to everyone in the context of the aboriginal community, the Métis community, etc. It is just that the language in advertising this program in the public documents hadn't always reflected that. That is just the language change. Therefore, there is no impact in the application of the program. If I understand that correctly then, that actually explains and gives me the answer to my next question that I was going to ask.

Are there targets set in terms of how many individuals this loan is attempting to reach and, therefore, new businesses created?

Hon. M. Coell: It has been based on the number of applications. I see it continuing in that line.

J. Kwan: The Premier's 2004 letter to this Minister of Community, Aboriginal and Women's Services states that a program is being developed and implemented to improve aboriginal socioeconomic circumstances. It states the province will continue to "develop and implement a program to improve aboriginal socioeconomic circumstances." The language adopted here and the programs, more importantly, that it refers to — to implement a program to improve aboriginal socioeconomic circumstances…. Is this new, or is that something in reference to an existing program?

Hon. M. Coell: It is a continuation of the work the ministry's been doing in a coordination of socioeconomic strategies for aboriginal people.

J. Kwan: So those would be the programs that the minister listed earlier. That's another set of strange language, then, from the government and from the Premier at that — to say in this letter that the province will continue to develop and implement a program to improve aboriginal socioeconomic circumstances. Yet the programs, as the minister advised, are the existing programs that are in place.

I don't know what exactly the province is doing to develop and implement a program to improve socioeconomic circumstances for aboriginal people. There are no new programs that one is developing or implementing, so it's rather misleading, really — the language that the Premier has chosen in his letter. That is the only conclusion that I could arrive at. Well, I guess that's the Premier.

The Premier's letter also says this program is detailed in the service plan. When I look at the service plan, I don't see any specific references to it. Maybe the minister can point me to what page in the service plan the Premier is talking about in this letter, where he says the program is detailed in the service plan.

Hon. M. Coell: I wonder if I could get the member to clarify. I'm not sure I understand what kind of answer she wants to the question.

J. Kwan: Okay. The Premier's 2004 letter to the Minister of Community, Aboriginal and Women's Services states that a program is being developed and implemented to improve aboriginal socioeconomic cir-

cumstances. Then it states that the province will continue to develop and implement a program to improve aboriginal socioeconomic circumstances. So I just asked the minister the question: what programs? Is there a specific new program that is underway? The minister said no, they are all existing programs. So we've dealt with that.

The Premier's letter also says that this program is detailed in the service plan, yet when I go to the service plan, I don't see anything specific about this program or any of the programs. So what is the Premier talking about? I'm trying to get a sense here in the service plan what the Premier is referring to in his letter. On what page in the service plan does it detail the specific programs that the Premier is referring to in this statement?

Hon. M. Coell: I think I understand the member's question. What we are looking at in the strategies area is improved coordination and access to provincial programs and services that respond to the needs of aboriginal people. I think that PASES, the provincial aboriginal social and economic strategy, is what the member is asking about.

What we're doing is trying to develop better coordination. I can give some examples of economic opportunities. In Agriculture, Food and Fisheries there's an aboriginal aquaculture initiative. There are agreements on fisheries. There's fish farming and the environmental summit. In B.C. Hydro you have things like the aboriginal business development and cross-cultural training programs. In Forests you've got the native unit crew program. Sustainable Resource Management has a number of programs developing use on first nations land. The treaty negotiations office has economic measures. B.C. Hydro also has scholarships for aboriginal people, and we have a number in our ministry that we've talked about previously, programs like Bladerunners.

When you go through all of the ministries, there are different programs offered, some of which have economic opportunities. From my reading of the letter and the direction that staff have, it's to improve better coordination of all of these programs, using the provincial aboriginal social and economic strategy. In many respects, this is a bit of a long-term look at how better we coordinate and integrate all of the programs that are offered provincially.

I would say we're doing some of that through the Vancouver agreement on a micro-level with the province, the federal government and a local government. That is my understanding of how that change and the direction of what that change is intended to be and the results that it's intended to get.

J. Kwan: What the minister just talked about is the service plan direction under strategies — improve coordination and access to provincial programs and services that respond to the needs of aboriginal people in British Columbia. That is a separate thing than what I'm talking about.

In the Premier's letter to the minister dated January 26, 2004, the Premier says: "In the coming year the province will continue work on a number of priorities to honour the commitments that we have made. These are detailed in your ministry service plan and include developing and implementing a program to improve aboriginal socioeconomic circumstances."

I don't think the coordination part of the work that the minister is talking about under strategies is the issue here. The language of that letter makes one believe there is a program the ministry is developing and implementing to improve aboriginal socioeconomic circumstances and that the details of that would be in the service plan, but it turns out that's not the case.

There is no program that the minister or the ministry is working on to improve aboriginal socioeconomic circumstances. What programs are in place already were existing within the ministry — we figured that out — so there is no such program. Presumably, aside from the fact that there is no such program, the Premier went on to say that you could find details of this program somewhere in the service plan.

What is the Premier talking about in that instance? I looked in the service plan for any specific program that the Premier might be referring to in his letter to the minister, and I find no specifics in the service plan on this area. I'm confused by the language that has been used by the Premier in his letter to the minister.

Hon. M. Coell: I may not have explained myself as fully as I would have liked. The program the Premier is referring to in his letter is not a small-p program where you say we're initiating this small program over here. It is looking at the broader — I would call it a big P — program of government. When you look at all of the programs that government is currently providing, there isn't a coordinated approach to those programs. Some of them have been developed over the years. What the Premier, I believe, is saying to the ministry is that we need a program that encompasses all that, which coordinates all of that and is a point where you can start to say what's needed, what the outcomes are and how these programs better aboriginal people's lives in British Columbia, working through the social and economic strategy as well.

So I am looking at that as a big-P program, but it is governmentwide. For this ministry to start to coordinate this improves the outcomes through coordination and integration of all the programs within government.

J. Kwan: The minister says the word that the Premier used, a "program," doesn't refer to a particular program but, rather, is just a general direction of government. Okay. I suppose that's one — the minister's — take on it. But I must say the language in the Premier's letter is confusing at best. If a person picked up this letter, one would think there is some sort of program somewhere that the Premier is referring to, which the government is developing and working on implementing — but not an overall government direction. I take it

Now, the minister in his introductory remarks on March 4 mentioned the aboriginal employment partnership initiative signed with the Vancouver police department. Could the minister please advise: what is this initiative? There is no information on this program on the ministry website aside from the recent news release from the Vancouver police department agreement.

Hon. M. Coell: The aboriginal employment partnership initiative is developed to remove barriers and enhance opportunities for aboriginal employment and economic participation. The Métis Provincial Council of British Columbia is running the program for us. It's actually a program that was very successful in Saskatchewan. It has created over 1,400 jobs in that province, so we've taken it.

Basically, what we do is look for employers that have an interest in making sure that their organizations are a welcome place for aboriginal people to work and that they work with the ministry and the Métis Provincial Council in cataloguing what positions are available, what changes in their organization would need to take place. We've got some very innovative…. The Vancouver city police is one; Duke Energy is another. The Royal Bank, London Drugs, Royal Roads University and the Vancouver Island health authority have come out and said they will take an active interest in working with us to reduce the barriers. We're looking for partners throughout the province. Those are some of the ones we've come up with. The Vancouver police, I think, is going to be a very positive one for aboriginal people living in the Vancouver area.

J. Kwan: The '03-04 to '05-06 service plan states that there are seven agreements that have been signed. Of the companies the ministry mentioned, I caught five of them. Maybe the minister mentioned more than that, but I caught five that he put forward. Maybe the minister could repeat the companies that have signed on to this agreement. How many of them were signed on to last year? Which year did the companies come on board?

Hon. M. Coell: I don't have the dates for the seven with me, but they were all done within the last two years. The last two that were done were Duke Energy and the Vancouver city police. We do have a number that are in negotiations right now. Hopefully, there would be more announcements over the coming year. I'll get the dates for the member.

J. Kwan: So there are a total of seven that have signed on. According to the service plan, three are protected for the next two years. The minister just said there are a number that are in the negotiations process right now, so those would be the other three. When does the minister expect those negotiations will be completed?

Hon. M. Coell: We expect that we would have three within the next three or four months and that we'll actually exceed our target. Every year the program seems to be, I would say, more successful than anticipated. There is more interest at this point — more people asking for information on the program, more businesses asking for information. We hope to exceed our target this year.

J. Kwan: The provincial government's participation in this program — how much money has been allocated towards this program from the province, and how does it contribute towards the program?

Hon. M. Coell: There is $300,000 in this year's budget for funding. As I said, the program is managed through the Métis Provincial Council of British Columbia.

Hon. M. Coell: The Métis Provincial Council uses the resources for building their capacity, for audits of the workplaces and then for cross-cultural training of the partners that have come into the agreement and for their own staffing as well.

J. Kwan: Earlier the minister used the term "provincial aboriginal socioeconomic strategy." I just want to be clear that that's not a new program. It's just a general concept of aboriginal socioeconomic strategy in terms of some of the programs that the ministry is already providing. I just wanted clarification on that.

Hon. M. Coell: Yes, the member is, I think, correct. It's not a formal document but a point of discussion and consultation with aboriginal people.

J. Kwan: Moving on to multiculturalism and immigration. The funding for immigration and multicultural services is down $1.95 million. The budget, I would say, has been cut quite significantly under this administration. The budget cut experienced in this area, in my view, I don't think is because of a lack of demand. It's just a lack of priority for government. Am I right in understanding that?

Hon. M. Coell: I think the reality is that there's a reduction in a federal transfer. It's based on a three-year rolling average of immigration. We did make a one-time funding for ESL in '03-04.

J. Kwan: Federal dollars were negotiated with the provincial government in an agreement where the programs are to be delivered by the provincial government. The funding from the federal government also transferred with it. With the funding cut in this area,

it's a provincial government cut, because the federal government, to my understanding, had actually transferred the federal dollars to the province for the delivery of those services.

Hon. M. Coell: It's actually an annual transfer, and there was a reduction in the federal transfer because of that rolling average.

J. Kwan: Maybe I can get this information from the minister, then. What was the year-over-year federal government contribution in this area, the multicultural–immigration services area? What was the provincial budget in these areas?

As I said, my understanding is that in the federal government transfer, the dollars came with the programs. The amounts went to the province, but the province had cut the amount of dollars for the delivery of these programs under the provincial government. It would seem to me that is a provincial cut. If that's not the case, could the minister then provide the dollar amounts from the federal government and for which program in the respective years and then what the provincial dollars are for each program in the respective years?

Hon. M. Coell: The funds that get transferred from the federal government to British Columbia very much relate to the number of immigrants. In 2002-03 it was $40.9 million, in 2003-04 it was $38.1 million, and in '04-05 it's going to be $37.6 million.

J. Kwan: The minister is saying that the federal dollars come with the actual numbers of how many immigrants are coming to the province. Let's just go back a little ways, then.

My recollection of the ministry of multiculturalism, when there was one under the previous administration…. I believe the budget was about $12 million for that ministry. Since this government took office, the budget has been more than halved by this administration. Since that time the budget has been steadily decreasing year after year under this government. Is the minister now saying that all of that budget reduction is a result of federal transfer payment cuts?

Hon. M. Coell: There has been a reduction over that period of time in the provincial moneys as well. There has also been a reduction in the number of immigrants coming, hence the reduction by both levels of government.

J. Kwan: Maybe the minister can break down for me year over year. For the purposes of comparison, let's start with year 2000. What was the budget for immigration and multiculturalism and the programs provided under it? Then, year over year, which part is provincial and which part is federal so we can compare exactly where the budget cuts came from? Is it federal or provincial? In addition, I would like the information on the numbers — year over year starting in 2000 in terms of the number of immigrants that have come to the province — to see whether or not and how the relationship is made with the federal government dollar cuts to the province.

Hon. M. Coell: We don't have those details with us this evening, but I will ask staff to prepare a report for the member.

J. Kwan: Yes, I would appreciate it so I could see exactly where the funding cuts actually came from. The way I have been able to look at the budget books year over year, it would appear to me that there is a substantive reduction from the provincial side in this area of immigration and multiculturalism. I would appreciate the factual information from the minister, so thank you very much.

In the minister's opening speech on March 4, he stated: "B.C. negotiated a one-year extension to the agreement with Canada on cooperation on immigration. I'm very hopeful that our negotiations will result in a new five-year agreement with Canada." This is particularly important. If it is the case that the federal government has actually reduced funding for immigration and multiculturalism, then the optimism for renewal of the agreement should be questioned, especially if the federal government's not forthcoming with additional dollars so that we don't have to keep on eating the reduction in this area.

Alternatively, the federal government is coming in with an agreement that is good for British Columbia and does provide for the support for immigration and multiculturalism. Therefore, renewal of that kind of program would be a good thing. I don't know which it is, so maybe the minister could advise us what is included in this agreement.

Hon. M. Coell: The member is right. We signed a new five-year agreement on April 5. We had an agreement with the federal government for the previous five years. The allocation formula has not changed. We believe that as our share of the number of immigrants that come into British Columbia goes up, we will see our funding go up accordingly.

The other thing that is new is that there is $3.62 million in new funding for enhanced language education, and that will start next year.

J. Kwan: The details of the agreement and how many dollars came with it — is that all, in terms of what the minister has just outlined?

Hon. M. Coell: The new agreement contains the foundational elements of the 1998 agreement and enhancements that align it more closely with the government's mandate and priorities. I can just give you a summary.

Under the agreement, the provincial nominee program will be continued and strengthened as a tool for

expediting immigration for skilled workers, investment-ready business immigrants and foreign students ready to work in B.C. There will be no expiry date on the PNP and no annual limit on the number of nominees.

Canada will continue to transfer funds to B.C. to deliver settlement services to immigrants, approximately $37 million a year with an additional $735,000 per year for enhanced labour market language training. That's the $3.62 million I mentioned before; that's broken down by year to $735,000.

Increased settlement in smaller cities and communities will be supported with special initiatives to attract skilled workers where needed, business immigrants and foreign students. Canada and B.C. will establish the necessary working arrangements to expedite processing of foreign students destined to post-secondary institutions.

That gives you an overview of it. As I say, immigration has been going down. We believe that it will go up as B.C.'s economy improves and that we'll see a greater share of immigrants and hence a greater share of the money coming back to the province. I do share the member's concern, and we have talked to the federal government about the level of funding for immigration.

J. Kwan: I would like to receive the information from the minister on the 1998 agreement, what funding came from the federal government and what actually went into services to the multicultural and immigration community, and then compare that to this agreement to see what changes actually took place on the federal government side and how it translated on the ground provincially in terms of dollars and programs that went to community groups. I'll be interested in getting that comparison. I suspect the minister doesn't have the '98 program here. If it is similar to the '98 program, I wouldn't mind actually seeing it so that I could arrive at the determination. If the minister could provide that information, I would appreciate it.

Hon. M. Coell: Yes, I'll provide both agreements and the programs developed in both those agreements.

J. Kwan: Provincially and federally, in terms of the programs under those respective years. Great. Thank you very much.

Last year during estimates debate the former minister made a reference to a steering committee and the appointment of a task force to examine future directions in multiculturalism. I'm just wondering: what is the status of that? Did the task force ever come forward with a report regarding this? Is this report public so that I could see a copy of the report? What recommendations came out of that report? If the minister could give me an update on that, please.

Hon. M. Coell: The multicultural advisory committee is reviewing that report and will be making recommendations to the ministry and to me.

J. Kwan: There is a report. Did the minister say there will be a report or there is a report? I'm sorry, I missed the earlier part of his answer.

Hon. M. Coell: There is a draft report that's being reviewed by the multicultural advisory committee.

Hon. M. Coell: The multicultural advisory committee is going to review that report and make some recommendations to the ministry. I haven't seen that report yet. I would hope I would get that in the next few months and then be able to review that with staff. I'm not sure what parts or whether the report would be made public at that point. I imagine there are going to be some pretty positive recommendations on where government can go in the next few years, so you would want to see that in the public domain at some point in the future.

J. Kwan: Presumably, the report will be made public at some point. We will await that information from the minister.

I would like to ask the minister about a couple of other areas to complete the estimates. One is to finish off the Vancouver agreement area in terms of what is going on there. Another is the heritage and museum area that I would like to canvass — and finally, the safety standards area. I am just going to canvass with the minister at this point which area he would prefer me to go into now — heritage, Vancouver agreement or safety standards.

Hon. M. Coell: As we did spend some time on the Vancouver agreement, I do have staff here who could continue that.

J. Kwan: I will just quickly, then, ask the minister some questions. We covered, actually, quite a portion of that under the housing component of the estimates. I would like to get an update from the minister in terms of other areas under the Vancouver agreement. What's going on, and what's the latest update?

Hon. M. Coell: Just to give an update, to date there is now $23.25 million in the fund. That's $13.25 million from the province and $10 million from the federal government. The Vancouver agreement…. I as the minister responsible, Minister Owen federally and Mayor Campbell are the steering committee. Staff and the community have worked up a vision — the first focus, the goals, the outcomes, the initial strategies — and then put it into priority actions.

There are really four that the steering committee is working on with staff from all levels of government. One is to revitalize the Hastings corridor. The second is to dismantle the open drug scene. The third is to turn problem hotels into contributory hotels, and the fourth

is to make the community safer and healthier for the most vulnerable. Initial steps have been taken in some areas. There is work that is quite far along and then some that is completed. The completed projects…. I think the member probably is aware of a number of them, because they've had quite high visibility in the Vancouver area and in her riding.

That's basically where we are. I have only been at a number of meetings, having been the minister for the last three months. I'm very impressed with the dedication of the staff that I have seen at those meetings and the real understanding that all three levels of government have to seeing some success. I would have to say that the people who have come before me in the political roles have done a good job. Looking at the staff of the city of Vancouver as well, their commitment to seeing some success in the downtown east side is admirable. I think — and I wouldn't say I was an outsider coming in but someone with a fresh view — they have identified the problems, identified the areas, and now you'll really start to see some success in those programs.

If the member has any other questions…. That's sort of an initial global view of the $23.25 million, where it is being spent and how. The other thing I would mention is the community involvement. There is a desire, and I think a longtime desire, for people in the downtown east side to see that positive change. They're very active. I have been at a number of meetings with literally hundreds of people involved in different groups talking about their part of the world and how they can make it better.

I look forward to working with Mayor Campbell and Minister Owen and the staff that are there now to continue to see the Vancouver agreement succeed in the years to come.

J. Kwan: I'm well aware of the early days of the Vancouver agreement, as I was the minister when we first initiated the Vancouver agreement program. It took some years, actually, to get the federal government and the provincial government and the municipal government lined up and even to agree on our general objectives and then, ultimately, to build the level of trust that is required for the betterment of our community.

That was the early days. There were some very worthwhile programs that were initiated by the previous administration. Since that time, things have evolved and things have changed as well, so I would just like to get some updated information with respect to that.

The minister says there was some $23 million in the Vancouver agreement account, and then $13.25 million from the province and $10 million from the federal government. Is that for this year's budget?

Hon. M. Coell: The decisions are still made by the management committee. The $13.25 million is actually in the trust fund, and the federal government still has the $10 million but makes it available as requested by the management committee.

J. Kwan: The trust fund the minister mentions — how much money was put into the trust fund from this year's budget from the provincial side?

Hon. M. Coell: The commitment was for the $10 million from the province and the federal government. We committed our $10 million, and then we committed another $3.2 million from MHR, and that went to fund certain programs. So our money that we committed — we committed that plus $3.25 million on top of it.

Hon. M. Coell: That was last year's budget. There is no new money coming in from any of the partners this year. It was all transferred last year.

J. Kwan: Of the dollars that had been committed last year and then the dollars that have already been expended since that time, how much is now left in the trust fund?

Hon. M. Coell: As of March 31 last year, $3.5 million was allocated. That was for some treatment programs, initiatives in supportive housing, drug withdrawal, therapy services, methadone treatment. There were agencies involved at all three levels — the Vancouver police, Workers Compensation Board, Employment Standards. I could get the member a more detailed breakdown. I don't have that here, but as I say, of that $20 million designated fund, only $3.5 million was designated last year.

J. Kwan: Maybe I can get this from the minister. In fact, I asked the former minister for this information a couple of years ago, and I still haven't received it yet, so maybe I can get the information from the minister on it. Since the government took office, what new initiatives have been put in place under the Vancouver agreement? How much was the contribution from the provincial government? How much was the contribution from the federal government? And what did the municipal government contribute since the election?

What programs are in existence now under the Vancouver agreement? There were a number of programs after the election that were still sort of in the works, and I don't know how many of those programs actually got implemented or how many of them got canned. I wouldn't mind getting that information in terms of an update from the minister on where things are at. Then in terms of existing programs that are now under the Vancouver agreement, what are they? What are those existing programs and the funding allocation for the respective programs?

I would appreciate receiving that information. As I mentioned, I did ask the former minister for this information in terms of an update. He told me lots of stuff was going on, and I still haven't received anything yet in my office with respect to that. I wouldn't mind

getting that information from the minister, if he could provide it, since the 2001 election.

Hon. M. Coell: We can supply that information, actually. Last year's numbers are just being completed, and we'll give you the estimate for this year's. I was saying to staff that we have offered to do a lot of research, and we probably would have been better off to make sure you had more research staff, because we're doing research for you. We're glad to do it, so we will get that information to you.

J. Kwan: I'm game for negotiations, so let's talk about it. More research staff for the opposition — okay. Should we do this here?

Anyway, I would appreciate that, and that would be great from the minister. You're right. We don't have enough research. Lots of times we try to just get information in the estimates process, and we do rely on ministers to get that information. Some are more cooperative than others. Some promise and never deliver, but I trust that this minister will deliver on his promises. I will look forward to receiving that information.

Is it the case that the federal moneys, the $10 million that the federal government committed…? I think the minister said it is not actually in the trust account, but we know that the money is there. What happens after the election? Could it be that they could actually disappear, depending on what happens after the election? Or is that commitment to the Vancouver agreement made, which is why the importance of a trust fund makes a bit of a difference? But those moneys from the federal government are actually not in the trust fund, so how can we be sure that money from the federal government is actually secured?

J. Kwan: And is it the case that the programs under the federal government for this $10 million would be the same in terms of the programs that the province and its partners have identified for the public to access in terms of the funds?

Hon. M. Coell: There are basically two processes with the federal money. They have a community process for about $5 million of that money. Then the western diversification fund has a process that they go through, and then it goes through the management committee as well.

J. Kwan: Could the minister provide the information on the process or the two different programs that the federal government's $10 million…? I understand the WEPA initiative and presumably…. Maybe I'm wrong, actually. I'm just basing this knowledge on when the Vancouver agreement was first established. The WEPA contribution from the federal government and the strings attached to it — are they still the same as when it first started, or is it different? And what is the other community initiative that the minister talked about for the other $5 million? What are the strings attached to that?

Hon. M. Coell: The breakdown would be as follows: $2 million through the SCPI — they have a separate community process that they would go through; $3 million is the Urban Aboriginal Strategy, and that has a different process. Then $5 million is western diversification, and they're not tied to the economic partnership initiative. There were separate moneys put in for management that don't go through those three processes. They just are used for management.

J. Kwan: So the SCPI money in the Urban Aboriginal Strategy was the housing dollars that the minister talked about when we dealt with the housing component. So this is not new in addition to the housing piece.

J. Kwan: In the estimates process of last year the former minister actually mentioned that the $10 million from the federal government was related to the 2010 Olympic bid. Now that we have actually won the bid and we are going to be delivering the Olympics in British Columbia, can it be anticipated that the federal government will come forward with more moneys for the Vancouver agreement?

J. Kwan: Okay, good enough. Actually, the reason I raise it — on a serious note — is that because the federal government tied the $10 million to the Olympic bid, I think there is an opportunity to get more dollars from the federal government now that the bid is successful. In planning towards the Olympics in 2010, there were a number of commitments that everyone was well aware of before the bid was successful. In order to deliver that, the federal government has to play a role.

I understand some of the infrastructure components, but we're also talking about the net impact of the Olympics on its most immediate communities. Vancouver would be one of them, so I think it's fair game that the federal government needs to be cognizant of that and to provide more dollars now that the bid is successful. I would certainly urge the minister to pursue that avenue.

Hon. M. Coell: There have been 12 groups consulted at this point. There is further consultation going on with youth and women and with the business communities — with the business owners in the area. We also had the forum, which I attended and which was very successful.

There is $4.5 million set aside for economic revitalization, much of which I mentioned earlier. I could go through some of the areas: to revitalize the Hastings corridor, to redevelop the Woodwards-adjacent areas, to create a one-stop access for economic and community development at the Four Corners site, to launch an economic development strategy with business and residents, to launch an employment strategy for multibarriered residents, to create incentives to retain and expand existing business, and to incubate new businesses.

There are a number of projects that are underway. All of those have been developed through the consultations with the community. Those things are being brought forward to the steering committee over the next couple of months.

J. Kwan: Is it the Hastings Street corridor, or is it the Carrall Street corridor?

Hon. M. Coell: I think you'd be safe to say that it's both. It's a recognition that that area needs some work and that it's going to get the work it needs.

J. Kwan: Actually, I appreciate that clarification, because I've heard references to both corridors.

Is it the case that for applications or initiatives under the Vancouver agreement, one level of government can veto a particular project?

Hon. M. Coell: It's very much a consensus model. I don't think there have been incidents where one level of government has suggested they don't want to move ahead. There has been a working through. I think a lot of that has to do with the number of people who are consulted, the number of people who are involved. A consensus model seems to be working very well.

J. Kwan: The minister is saying that no level of government has the ability to veto one project under the Vancouver agreement?

Hon. M. Coell: I think — and I'm just relying on the past few years — that if one level of government had serious concerns, they would put them on the table and want them addressed fully. That would be the mechanism that I think the three governments would use to come to a consensus.

J. Kwan: Okay. What is the foreseeable future for the Vancouver agreement? Is it anticipated that the Vancouver agreement would carry on for a few more years, another five years? What is the anticipation for the future of the Vancouver agreement?

Hon. M. Coell: I think all three levels of government have showed a willingness to renegotiate some form of continuation of the agreement. I can also say that the agreement is being viewed across the country and by the federal government as something that they could do in different provinces and different cities. The other thing that I think is worthwhile thinking is that we're hoping, and I think the city of Vancouver is hoping as well, that the new deal for cities will bring forward some new funding and some new initiatives that could be moulded or adapted to the Vancouver agreement.

J. Kwan: Yes. The Vancouver agreement was established, actually, under the Winnipeg urban development initiative. The Vancouver agreement was established slightly differently under the Winnipeg initiative but with the goal of being an example of how levels of government can work together to address concerns for local communities.

I'll look forward to the minister's information with respect to the Vancouver agreement, the updates year over year since the election on what initiatives took place, how much funding came from where for the respective initiatives, and what future initiatives there are that are now provided and funded for. I would certainly watch with interest this development in the area of the Vancouver agreement.

Now, moving on to heritage with the minister. The '04-05 to '06-07 service plan says that the heritage branch has been moved to the local government department. Where was the heritage branch before that?

J. Kwan: The budget for the heritage area has been cut significantly as well — a cut from $7.3 million to $3.8 million, so a significant reduction — which would mean that the programs would have been impacted with this budget reduction. What programs have been eliminated as a result of the budget cuts?

Hon. M. Coell: Primarily, about $1.5 million in capital funding and reductions in staff in Victoria and the other regions as well.

J. Kwan: Capital funding, I presume, for things like Barkerville, as an example? Is that where the budget cuts actually came to impact — and staffing cuts as well?

Hon. M. Coell: The last two years there was $1.5 million in each year to bring those heritage properties up to a level where they could be devolved back to the community. That funding is now complete, and that's the change in this ministry. The change in the staff is the difference.

J. Kwan: Specifically with Barkerville, back in May of last year the government attempted to find a private

company to manage the historic Barkerville site. Barkerville is a vital component of the interior — the heartlands, the government likes to call it — in terms of impacting its economy, as well as an important heritage site, home to the province's largest museum and over 300,000 artifacts. Barkerville is an important economic asset to this province. It draws some 100,000 visitors a year to the interior, and its value to regional tourism has been calculated at $7.3 million a year.

Now, despite the extraordinary value of this heritage site, the government sought to off-load the management of Barkerville to private interests. While many businesses looked into the government's plan to take over the site, no deals were eventually signed. No private business thought the government's financial plan made enough sense for them to get involved. No deal was signed, and that really left quite a situation with Barkerville.

Barkerville takes in some $400,000 a year in revenue, but its operation costs depend very much on a provincial government subsidy. The subsidy was $1.1 million in the past, but the government, of course, is trying to reduce that amount significantly to $750,000. The ministry's request for proposal for the management of Barkerville states that any operator would also have to pay at least 10 percent of its gross revenues from operating the site back to the province in fees. In the meantime, no business actually undertook Barkerville.

The district of Wells has actually tried to step in. What is the status now with respect to Barkerville?

Hon. M. Coell: A community-led task force has just completed an assignment. The assignment was to recommend a community-led governance model and to develop a long-term business strategy for Barkerville. I understand they've made some progress. I am going up to meet with the central interior mayors and the community-led task force on May 20, so I'll actually miss the last day of the House. I'm looking forward to seeing the report.

I think there are some really innovative ways to deal with heritage. I was at Fort Steele a couple of weeks ago and saw the progress they're making. We've got an announcement — Point Ellice House here in Victoria. Emily Carr House was devolved. A number of new, innovative ideas that I think are going to work well…. I am looking forward to seeing the report and talking to the task force in a couple of weeks.

J. Kwan: How much is the government anticipating it will provide to Barkerville as a subsidy?

Hon. M. Coell: This year the budget for Barkerville is $1.25 million. That's $750,000 from the voted appropriations and an anticipated $500,000 in earned revenue, which gives you the total of $1.25 million.

J. Kwan: The subsidy component of Barkerville was $1.1 million. What is the subsidy component of Barkerville this year?

J. Kwan: So they're going to be short $350,000 from last year's subsidy in that instance. Now, as the minister mentioned, the task force is trying to do some work here to make it work. Even the district of Wells, where Barkerville is located, concluded that anyone who took over the site under the government's proposal plan would actually lose at least $250,000 a year. In fact, Councillor Judy Campbell, who is the chair of the select committee that examined the RFP, concluded: "Even if we increased admission fees, cut staff and increased contributions from merchants, we were looking at a $250,000 annual shortfall in the operating budget. And that's not including capital maintenance for Barkerville's 150 buildings and water and sewage system."

On that basis, people will have a tough go at trying to sustain Barkerville. In light of that, with this work the government is undertaking with the community…. At the end of the day, it does mean that government subsidy needs to be in place to sustain Barkerville for it to continue. Will the minister commit, then, that as he works to minimize costs to government — and I can fully appreciate that — at the end of the day, whatever happens, the government will commit to keeping Barkerville alive?

Hon. M. Coell: I haven't seen the committee's recommendations, but I understand that I'm going to have a chance to view them prior to the 20th when I go up and meet with them.

I think one of the long-term benefits to heritage sites is making sure that the community is always involved with them through non-profits. That doesn't mean the non-profits can't have agreements with business throughout the province and the sites.

I think the opportunities for heritage sites are unlimited in this province. I don't think there's any question that the sites we've got, both federally and provincially, are going to be enhanced in the years to come through municipal as well as non-profit involvement and by bringing the business sector into the day-to-day operations of many of the sites. I look at Fort Steele, and it has bakeries and a whole range of things from people having weddings there to people having family pictures there.

I think the opportunities in heritage sites have been underutilized in Canada, not just in this province, for decades. We've thought of them as pieces of museum, but they're actually pieces of our history that can be lived and enjoyed every day by people. We just have to find new and innovative ways of bringing people to heritage sites.

There is no doubt that long-term, these are going to be increasingly part of our tourist infrastructure in the province. I think one of the very exciting parts of the ministry is a change in attitude to the operation of heritage sites. I am looking forward to meeting with the task force on the 20th, making their report public and taking their suggestions.

J. Kwan: I don't want to dispute nor do I dispute the minister's notion that we can really look for and maximize the opportunities for heritage sites, economically and culturally, for our communities. I don't dispute that for one moment. Where I do take issue, though, is that the government, as the government knows, underwent an RFP process during which no business was willing to step up to the plate, because they can't make it work financially without the government subsidy.

What I'm worried about, though, is that in spite of all the good intentions of the community in trying to keep Barkerville alive, at the end of the day they may not be able to do so with shrinking government support. Perhaps government support can be withdrawn over time if one can actually materialize the revenue opportunities on the other side so that you don't end up losing the site. That's what I'm worried about.

At the end of the day, we have this wonderful heritage, as the minister just acknowledged. It is not just a museum. It is very much, I would say, a living heritage of British Columbia that shows who we are and where we came from. It is a fabulous educational force as well — as I have been through Barkerville myself — for adult and children tourists alike. There is much to be gained here.

What I'm worried about is that as the government reprioritizes its agenda, it is going to withdraw and reduce the subsidy dollars for Barkerville, and as a net result of that, we'll end up losing Barkerville altogether. It would simply have to shut down, and all of that heritage and all the potential contained within it would be lost. That's what I'm concerned about.

The commitment I'm seeking from the minister today as he works toward expanding the potential there is that he would commit to making sure that at the end of the day, no matter what happens, we do not lose sight of the value of what Barkerville contributes. Therefore, would the government and the minister commit to ensuring that before the government reduces its subsidies and withdraws its subsidies to Barkerville, it will ensure there is a viable plan in place to replace that subsidy? That's what I'm saying — to replace that subsidy.

I don't dispute that non-profits can come in to provide a variety of different ways of operating. I don't dispute that either. The issue, of course, is that as we know, non-profits depend a lot of times on government funding. If they can't access that money, you know, it is tough for them to keep alive.

It makes no sense to me, as an example, that during the summer when we had the horrendous fire in the interior, we lost some historical trusts, and people were very willing to come forward, including the government, to put some dollars in place to rebuild this heritage. Yet here we have a situation in Barkerville where the heritage in terms of its site is already built. We may lose it altogether, because the government is not prepared to put forward the operating subsidy funds and long-term maintenance funds to keep Barkerville alive.

The commitment I'm seeking from the minister is that at the end of the report and the recommendations and of all the work the government tries to continue to build for Barkerville, the government would not walk away from Barkerville but would continue to provide the needed subsidies to keep it alive.

Hon. M. Coell: I appreciate the member's comments. Our commitment is that we have a significant provincial heritage site that we want to see maintained and enhanced, and we're going to work with the people in the area to do that. There is a commitment on all our heritage sites to make sure they're enhanced in the future. I can tell the member that I still have a small bottle of gold chips from when I was five years old and went there with my parents and panned for gold. Every child in this province should have an opportunity to do that, and I want to make sure that happens.

J. Kwan: I will take that as a commitment from the minister that he will do everything he can to keep Barkerville alive until the day when the subsidy dollars for Barkerville from the government can be replaced by revenue-generating opportunities elsewhere, and that the government would not walk away from Barkerville and therefore risk British Columbia losing this wonderful natural heritage, one might say.

Okay, Point Ellice House. Last spring the ministry was unsuccessful in negotiating an agreement with an outside organization for the management of Point Ellice House, and early in March a new deal was announced with the Capital Mental Health Association. What are the details of this deal? Has the agreement been signed? Why was there no agreement last year, as an example, but the current status today? Has there been a deal that has been signed?

Hon. M. Coell: Yes. I'm pleased to answer that, yes, there has been a deal signed with Capital Mental Health, and we will be having an opening very shortly.

Hon. M. Coell: Not significantly. Really, new partnerships came forward and made this a viable option for us and for Capital Mental Health.

J. Kwan: Who is going to pay for any of the future renovations to Point Ellice House?

Hon. M. Coell: As part of the deal we provide them $40,000 a year, and they can apply for an additional $15,000 a year for capital improvements.

J. Kwan: Presumably, that is deemed to be enough for the capital work that it needs. If that is the correct assumption, then let me ask the minister questions around the Maritime Museum.

In the last session the former minister stated that the Maritime Museum was looking at relocating. The plan immediately raised concerns in the local commu-

nity. The concerns were raised in the House on December 2, 2003, by the member for Victoria–Beacon Hill. Now I understand a deal has been reached for the next three years. Maybe the minister could tell this House: what does this plan look like now?

Hon. M. Coell: The Maritime Museum is working over the next three years. They have a funding commitment for three years. They're going to develop a business plan that may entail them moving to bigger quarters, something that is under consideration. They're working with local groups in the greater Victoria area on partnerships as well.

Hon. M. Coell: I think there are two issues. Long term, rent is an issue. Also, the building does need renovations and could be…. I think the size of the building, maybe being on one floor rather than a number of floors, is a problem for them.

J. Kwan: In other words, the building would have to be smaller. When the minister says "the size of the building," are we then looking at a smaller location? Or are we looking at locating the site outside of the downtown core so the rent would be perhaps cheaper?

Hon. M. Coell: Their long-term issue is actually the opposite of that. They can only show a fraction of what they have because of the small size of the building and because it's on multiple levels, whereas if the building was on one level and it was larger, they would be able to show a lot more of what they've been able to collect over the years and probably increase the number of people who would come to it because of the size and interest in the collection.

J. Kwan: In fact, just for the minister's information, the CEO of the Greater Victoria Chamber of Commerce wrote an article on November 17 relating to this issue. Of course, on the issue around location, location, location…. Location is everything from a business point of view, and moving it to a different location could become a major problem in terms of tourist attraction for this particular site.

There is a full letter, actually, from the CEO. Could I take from the minister's answer that his commitment is to, again, keep the Maritime Museum alive and to provide government support until revenues from other sources could be generated?

Hon. M. Coell: I believe they'll have time to do that with the three-year agreement they've got now. They're very active at this point in looking for a new site. They want to be downtown; they'd like to be on the water. It is a tremendous collection. It's just a shame that a fraction of it can be shown at one time. If they had a facility that could show that entire collection, they'd have a way bigger tourist attraction than they have now.

J. Kwan: The operating budget for the museum — has it been the same from the provincial government in terms of its contributions?

Hon. M. Coell: We've actually only provided them with rent assistance in the past years. They've had their own operating budget.

On that basis, the support from the provincial government — is it the same as previous years in terms of the rent assistance? Rent is actually a big part of operating; that is my point. When the minister says, "We've only provided the rent component and not operating…." Rent is part of operating.

Hon. M. Coell: In the past they haven't received money from government. The three-year deal is a reduction in rent from BCBC and some assistance from government. Up until that time, they were functioning on their own with donations and different other forms of grants that provided their operating costs.

J. Kwan: So the three-year deal is for the government to waive rent? What is the three-year deal from the government side?

J. Kwan: I just have a few more questions for the minister in this set of estimates.

I would now like to turn to the safety standards issue, if I may. What stage is the ministry at in the

J. Kwan: Presumably, the ministry consulted with the Building Officials Association of B.C. on the changes the government made to the regulations on safety standards.

Hon. M. Coell: We consulted with many groups. There probably were individuals from that association. I actually spoke to their association at lunch today. Most of them are building inspectors and probably wouldn't be as affected by this legislation as some of the other groups that were involved for over a year in discussions with the ministry.

J. Kwan: Is it the case that supervisors under the new safety systems act are not required to hold the Red Seal certification?

Hon. M. Coell: I need a clarification from the member on which technology she is asking about.

J. Kwan: These would be the supervisors for the different applications of standards under the safety systems act. My understanding is that the supervisors would no longer be required to have the Red Seal certification. Is that correct?

Hon. M. Coell: The reason I asked for clarification is that many of the technologies don't require Red Seal — didn't before and don't now — so I would need to know the technology group that the member was asking for.

J. Kwan: I actually don't have that information. All that I am aware of — and it has been brought to our attention — is that supervisors and their qualifications have changed. Maybe I can canvass this question with the minister: for what technology did supervisors' qualifications change under the safety systems act?

Hon. M. Coell: I'm advised that the ministry doesn't think there is a category where the supervisors' qualifications have changed, but I can get the member that information on all the categories if she would like.

J. Kwan: Only if it has changed, because that was the issue that was brought to us. If there has been a change where qualifications had been lessened, then I would be interested in receiving the information. If there has been no change, then I don't need to receive that information.

Maybe I can follow up on this. If it has been changed, then there is an issue around the duty of care that falls with the provincial government that has been established in the courts in other areas. Then the follow-up question would be: if there has been a change, what is the level with respect to the duty of care that is the onus of the provincial government? What has the government done in terms of presumably seeking a legal opinion on the government's responsibility? What is that level of duty of care defined to be, and what is the legal opinion regarding that — to follow up, if there is a change? If there is no change, then none of those questions would be applicable.

Hon. M. Coell: I don't believe there is an issue, but if there is a change, I will get that information to the member.

J. Kwan: That wraps up my questions to the minister in this round of estimates debate for the Ministry of Community, Aboriginal and Women's Services. I will just simply give some concluding remarks.

First of all, thanks to the ministry and the minister and his staff for their cooperation, in particular in providing the information where I had asked for extensive information from the minister, and I would look forward to receiving that.

Also, there are areas of disagreement from the opposition side with the government, particularly in the areas of funding, in the area of child care, in the area of women's centres and the cuts to women's centre funding, the underspending in this area and the government's reallocation of those dollars to other programs — the way in which the government has spent and has decided to spend the federal government dollars in the area of child care, as an example. We debated at length around that.

I also took issue, as an example, with the Minister of State for Women's Services in her approach to addressing pay equity issues, as though somehow women in our communities have not experienced historical injustices, if you will, in terms of pay equity. For the minister to sort of just ignore those issues and sidestep them was certainly unacceptable to me and to the opposition, and we raised many of those concerns.

Having said that, I recognize that this government has its own approach to things. While many of the things that the government has done are some things I would disagree with, nonetheless, those are the priorities that the government has set. I think it is unfortunate, though, that those priorities from time to time reflect poorly on those who are in greatest need, particularly those living in poverty, women and those who are in need of housing.

Hon. M. Coell: I move we rise, report resolutions and ask leave to sit again.

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

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

Hon. K. Falcon: It's a pleasure to have the opportunity to serve in this portfolio. It's quite an honour to follow in the footsteps of those before me who have served with distinction.

I would like to introduce some ministry staff that have joined me in the House today. I've got Chris Trumpy, our Deputy Minister of Provincial Revenue; Yvette Wells, the executive director of the Crown agencies secretariat; and Norm Hooper, vice-president of maintenance and chief engineer from B.C. Rail. I'm also joined by John Dyble, Assistant Deputy Minister of the Ministry of Transportation.

These are challenging and exciting times in my ministry. Under the leadership of our Premier, my ministry has committed to opening up British Columbia through innovative, forward-thinking transportation strategies that move people and goods safely throughout B.C. while helping to revitalize our provincial economy. We are investing in transportation infrastructure in the heartlands, we are opening up northern B.C., and we are preparing to welcome the world in 2010.

Over the past year we have made some major accomplishments. None is more important than our commitment to improve the Kicking Horse Canyon. We've begun to replace the Five Mile and Ten Mile bridges near Golden, as well as a number of widening projects on Highway 1 through the Kicking Horse Canyon. We hope to see an investment totalling $670 million with our federal partners to improve this dangerous mountain pass. Driving on the Trans-Canada Highway is going to be a lot safer and a lot easier for heavy-duty trucks, for buses, for tourists and for residents.

Our government has also demonstrated its commitment to improve a dangerous stretch of road that links Vancouver to Whistler. We have committed $600 million over the next six years to improving the Sea to Sky Highway. These improvements will certainly support our preparations for the 2010 Olympics, but regardless of that, it is time to improve this route — plain and simple — for the safety of drivers between Whistler, Squamish and Horseshoe Bay.

In addition, this year we have completed the twinning of the Culliton Creek bridge. We have begun rehabilitation of the north Culliton Creek bridge, and we've reconstructed seven kilometres of highway. But there's more. We are currently working on other large and vital projects to help strengthen B.C.'s economy and facilitate the free flow of people and goods.

The people of the southern Okanagan have been asking governments of all political stripes for a new bridge across Okanagan Lake. Finally, they found a government that would listen. We committed $100 million for a new Okanagan Lake bridge and $20 million for two interchanges on the west side. The bridge is going to have five lanes instead of three, and it will have a marine channel to allow boats to pass beneath the bridge without having to wait for the lift span.

Earlier this month the request for qualifications closed to design, build, operate and finance the project. We have received five submissions. Construction will begin by the fall of 2004, and we expect to have the new bridge open by the spring of 2008.

Apart from the big projects, we have ministry staff working across the province to improve roadways and make transportation safer. We've invested $54 million to improve Highway 97 in the north. We've invested $147 million to improve Highway 97 south in the interior. We've invested $21 million to improve Highway 19 on the Island, and we've paved more than 2,700 kilometres of road this year across the province.

We've been extremely successful in our $1 billion investment partnership for B.C. Rail. CN will provide in excess of a billion dollars of investment, not just in our rail infrastructure but in our communities, in our economy and in our future. That investment will retire B.C. Rail's $500 million debt. It will protect taxpayers from financial losses that have cost $1.3 billion in the past 15 years. It's an investment to establish a new northern corridor of economic opportunity that will establish a new North American gateway to Asia and

create a new service corridor for our agricultural producers in the Peace and in the Prairies.

It's an investment that responds to the needs of the north and that will strengthen our resource and tourism industries and provide for a sustainable, long-term future for the northern part of British Columbia. This is an investment that will revitalize rail services for communities and their customers. It will deliver new infrastructure, new jobs and new promise for every region of this province.

We will also be setting up a $135 million northern development initiative to invest in economic opportunities like new transportation projects in the province. We are also committed to revitalizing B.C.'s airports and ports. We have committed $17.2 million to support the construction of a major port expansion in Prince Rupert. We've committed $10 million for three years to expand the Cranbrook Airport to accommodate non-stop air service to and from Europe. The B.C. Rail investment partnership is allowing us to invest $4 million to support terminal and runway improvements at the Prince George Airport. This is expected to create up to 75 jobs over three years and a further 300 jobs in the region.

Despite our list of accomplishments, we will not be resting. The Premier is committed to opening up British Columbia. In keeping with the plan, we are investing a total of $1.3 billion over the next three years to improve transportation infrastructure. Of that, $836 million is dedicated specifically to projects in the heartlands. We will continue to invest in ports and airports across the province, creating opportunities and strengthening communities in preparation for the Olympics in 2010.

I've only had the pleasure of being minister in this portfolio for a few months. In that time, I've had the opportunity to learn a great deal about B.C.'s transportation infrastructure. I'm proud of the work B.C.'s doing to enhance the highway infrastructure, I'm certainly proud of this year's improvements, and I'm proud of what they will do for British Columbians in this entire province.

The benefits of a strong, efficient and integrated transportation system are many. They will create job opportunities in local communities, they will provide new opportunities for business, and they will encourage economic development across B.C.

J. MacPhail: I'm going to start with questions on B.C. Rail, and I'll make an opening statement about B.C. Rail.

I noted with the minister's…. He's using a message box line that clearly every single B.C. Liberal has been told to use. That's: "Under the leadership of our Premier." I notice he said that, and I notice in question period that they're all supposed to say: "Under the leadership of our Premier." Well, I'm going to describe what happened under the leadership of this B.C. Liberal Premier.

The Liberals campaigned on a new-era commitment to not sell or privatize B.C. Rail. They were elected by constituents who took them at their word. I'm sure there'll be Liberal MLAs standing up and saying to the minister: "Hey, we said we weren't going to sell B.C. Rail." So how's that going? The Minister of Transportation and the Premier claim that they have not sold or privatized B.C. Rail. It was interesting to hear what the CEO of CN, Hunter Harrison said when he told an analyst upon the conclusion of the deal. He said CN paid "$750 million to buy the business."

The Liberals have said repeatedly that they'll release the B.C. Rail sale deal to the public. I'm going to be comparing exactly what the then Minister of Transportation said when the bill was debated to what this minister has or has not committed. I'll be doing that throughout estimates. Everybody in the Liberal government has said: "Oh, we'll release the deal." It's months later — five months since the announcement of the sale — and still no sign of the deal.

So much has happened to make it famous. First of all, the infamy starts with a police investigation, a police raid on the Legislature. Its infamy continues with more than a dozen mayors and councillors on the B.C. Rail line, from Squamish to Fort St. James, asking for the deal to be opened and made public. The Premier has ignored their collective concern.

The Premier is ignoring it because, along with those mayors and councillors signing the letter, Jim Sinclair from the B.C. Federation of Labour also signed the letter. That's reason enough for this government to ignore everybody else. Their partisan ideology runs so deep that they risk the support of communities and politicians that actually supported them in their election because of this government's partisanship. However, these councillors and mayors asked the Premier in a letter "to suspend the sale of B.C. Rail until matters related to the raid on the Legislature have been fully investigated by the police."

If the B.C. Liberal government is interested in pursuing any level of accountability, the deal should be opened for scrutiny. It's not enough for the Premier to say he's willing to campaign on this in the next election. What's he going to campaign on? Open up the deal now.

Actually, here's why the government probably doesn't want to release the deal. Here's what we know already, taking a closer look. There are supposedly $1 billion of benefits for British Columbians. Wrong — $250 million of that is at risk.

It's not even guaranteed in terms of tax credits. We've had no ruling from the Canada Revenue Agency about whether CN is going to be able to use those tax credits to write down its own payment of taxes to Canada, so the taxpayers could be left on the hook for that $250 million if the Canada Revenue Agency doesn't agree with the Premier on the tax credits. It's the British Columbia taxpayers that will be on the hook for that.

Let's be clear. Even the $1 billion isn't $1 billion. CN is going to pay $250 million less in taxes than it would have prior to this deal because of this deal. How is that good news for Canadians or British Columbians that a

private, publicly held corporation is going to be paying a quarter of a billion dollars less in taxes?

Then let's look at the figures of the rest of the $750 million. Some of it's going to go to deserving projects — deserving projects that didn't need to have the B.C. Rail deal at all. The government could have committed to these projects regardless, but I certainly hope that the government is going to proceed with these projects. They haven't yet proceeded on any of the projects. They're deserving, and I hope that the money is well used, because our communities in the north need all the help they can get. They have been completely ignored by this government to date.

Here's what some of the projects are: $4 million for an expansion to the Prince George Airport; $17.2 million to fund expansions at the port of Prince Rupert, even though that expansion requires $54 million; $15 million for a first nations' trust fund that has become incredibly controversial already with this Minister of Transportation trying to use it as a claim of support for the B.C. Rail deal and the aboriginal leaders saying, "Uh uh. Not so"; $135 million for a northern development initiative. Good news — all of that. However, the total amount of that funding is 17 percent of the billion dollars that CN is claiming to pay that goes to our communities. That's the best-case scenario. Dig deeper, and it gets even a little more sketchy.

The northern development initiative. Some $60 million will be divided into four regional funds: the Peace gets $15 million, Prince George gets $15 million, the northwest gets $15 million and the Cariboo-Chilcotin gets $15 million. It's $15 million each, so the entire Peace region gets $15 million out of a billion dollars. That's 1.5 percent of the entire deal. Is that a good deal for the Peace when the mayors along the line are saying, "Uh uh. Hold off. Suspend the deal until the police investigations are over"? They're getting a total of $15 million. That's it. The northwest, the entire northwest, gets the same — $15 million.

So much of this process and this announcement are wrapped up in suspicion and secrecy. The other bidders complained about the process. One even dropped out. The winner was a major donor to the Liberal Party. The fairness adviser raised serious concerns about leaks. The government said not to worry. The Premier isn't showing us the deal. We have no idea when the competition bureau is going to be finished. I was told it would take three to six months. We're at the end of the fifth month now. There are serious land claims issues that need to be done. All of this is being done under a continuing cloud of secrecy by the government.

I'm going to go through the B.C. Rail deal in time lines and ask a series of questions. June 5, 2001, a month after the Liberals sweep the B.C. provincial election, Dave Basi is named the ministerial assistant to Finance minister Gary Collins. Bob Virk becomes ministerial assistant to Transportation minister Judith Reid.

By the way, it was in April of 2001, during the election, that the B.C. Liberals added to their new-era platform. It had not been part of the new-era platform before April when the B.C. Liberals held a news conference and said: "We are committing to not sell B.C. Rail after much consultation." They actually held a news conference and added that promise to the New Era document, because of course, we know in 1996 they said they were going to sell B.C. Rail, and they lost the north.

In April 2002, RCMP and Victoria police launch a joint investigation involving schemes to trade B.C. marijuana for cocaine. The investigation also looks into organized crime and the possible police corruption. May 15, 2003, the government issues requests for proposals for the purchase of B.C. Rail. November 17, 2003, the company hires a fairness adviser, Charles River Associates, and Charles River Associates releases the interim report on the B.C. Rail deal. The report refers to leaks of information. What was the source of those leaks, and what did they contain?

Hon. K. Falcon: The leaks that the member opposite refers to were spelled out in the Charles River Associates report that came out. What he indicated was that the information that was faxed accidentally by the investment banker working on this project to CN…. Immediately upon faxing it, they realized that information shouldn't have been sent. They contacted CN immediately to get that information back — which they did, along with the confirmation that the information wouldn't be used or looked at or what have you. Furthermore, that was information which Charles River took pains to point out was ultimately going to be distributed, and was, to all of the bidders anyhow. It wasn't information that would have a germane impact on the deal itself.

J. MacPhail: I'm looking at page 11 of the November 14, 2003, Charles River report. Again, part of the exercise is to put this information on the public record. It says there were two leaks. Was the minister just describing one there?

Hon. K. Falcon: I just got clarification on that. That was part of the information provided to all the bidders, and though it was a leak, it wasn't a leak that would have been germane to the bidders because they had that information. It was a leak to the media, and it had to do with the Ministry of Transportation's interests in Highway 99 as it relates to the railway line.

J. MacPhail: Let me read from the report of Charles River Associates: "In the second case, we have been informed that the error was quickly identified." Can the minister tell us what that error was? Can he repeat what that error was that this report is referring to?

Hon. K. Falcon: That was the provision of information to CN that they shouldn't have been sent. That was immediately destroyed.

J. MacPhail: But what was the information? We've been trying to find this out for ages. Of course, the fairness adviser doesn't say anything about what the in-

formation was. We now know it was sent to CN. Thank you very much to the minister for identifying that. It says: "We have been informed that the error was quickly identified." This is the fairness adviser, who should be speaking more in the positive, I think, rather than in the passive.

What was the action that was taken? Who took the action? Who identified the error?

Hon. K. Falcon: The information was commercial data about B.C. Rail's business operations, information that was ultimately made available to all of the bidders. It was the investment bankers that realized they had inadvertently faxed that particular portion of the information to CN earlier than they should have received it. They contacted the evaluation committee to let them know that they had inadvertently done this. Legal counsel from the government side had contacted CN immediately and asked for legal undertakings from their counsel that they would immediately destroy the information, and that legal undertaking was given.

J. MacPhail: Who are the investment bankers, and when did they discover this? What was the date?

Hon. K. Falcon: The investment banker was CIBC World Markets. We haven't got a specific date, but we are pretty confident it was sometime in mid-October. It would have been…. Yes, we can find out for you. We'll take that on notice and find out.

J. MacPhail: In September CIBC World Markets was caught saying, "Of course, CN would be the best choice for buying B.C. Rail" — early September 2003. That's why I was interested in knowing who it was that leaked to CN. We have in September 2003 the investment bankers saying publicly that CN, of course, is the best choice for buying B.C. Rail. In October we have CIBC World Markets leaking information to CN inadvertently or wrongly. The bid closes in November. How long a process did it take to notify CN, to get the information destroyed and, more importantly, to distribute the same information to all of the other bidders? Timing here is very important.

One thing I should say — I should correct an earlier comment I made — is that the data that was faxed out would be data that would only have gone to the final partner, so I was incorrect in saying it would have ultimately gone to all of them. It actually would have just gone to the final one, so I wanted to correct that.

J. MacPhail: What does that correction mean? The data that was given to CN never, ever went to the other bidders?

J. MacPhail: Okay. Let me just get this clear. In September 2003, CIBC World Markets, the analyst, who's the investment banker for British Columbia, says: "Of course CN would be the best company to buy B.C. Rail. They're actually doing the bidding of the taxpayers." They show their hand — that CN would be the best choice. That's September. In October there's a leak of commercial data to CN while the bidding is going on. CN is one of four bidders, and that commercial data is never distributed to the other bidders — and somehow this is a fair process?

How does that work? The minister said this data that was leaked to them should have only gone to the final bidder. Well, the problem is: we were in the middle of a bidding process that had four bidders. How is that fair?

Hon. K. Falcon: The CIBC World Markets reference you're making to the CN deal apparently referred to the Ontario Northland deal. One thing I think it is important to point out to the member, as I'm sure the member is aware, is that in those large organizations, those large investment banking and banking concerns, they do have market analysts, who operate quite separately from the investment banking arms. It is quite common. There is what is commonly referred to as a Chinese wall between the two of them, so that the analysts will continue to make comments on how they view the world in the rail sector, for example, and the investment banking arm will operate very independently of that.

The other thing I would point out is that in regards to the information, the reason why it wouldn't go to all the parties is because the information is very commercially sensitive — data that you don't want the competitors to have. You don't want them to have access to all of that data. The final negotiating partner you end up with is the partner you would like to have access to that data.

J. MacPhail: I am very pleased with the forthrightness of the Minister of Transportation. He's what we like to call courageous in telling the truth. But let's be very clear. What the minister has just admitted to is that the leak, which we asked about day after day in the Legislature and in question period…. We now know what it is. It's commercially sensitive information of B.C. Rail that should only go, in the final analysis, to the successful bidder — except that CN got it halfway through the bidding process. If that doesn't give you a leg up, what does?

The playing field wasn't levelled after that. The government didn't say: "Oh, my gosh. That's such a big error; we should start all over again." They didn't do anything. They called up CN after they'd had the data for three days, minimum — at least three days, and that's three days from the time it was discovered that this information had been leaked. They've got three days to absorb it and then destroy it, and the other three bidders get nothing.

Madam Chair, I will just refresh the minister's memory. The Minister of Finance of British Columbia

commented on the inappropriateness of the CIBC World Markets analyst making the comments that she did about the B.C. Rail deal. It was around the time of the release of the first-quarter report. The story interfered with the release of the first-quarter report.

It was about a CIBC World Markets analyst — I think it was a woman — who made those inappropriate comments, and she was chastised. The company, the investment banker, was chastised by the Minister of Finance of British Columbia, so the admission was delivered by the government that yes indeed, CIBC World Markets did say this about the sale of B.C. Rail. I find it unbelievable, but I'm very happy that the minister has been so courageous in the truth here that this is the story.

When this was discovered by…. I notice we use the word — I love it here…. Charles River Associates says this: "In the second case, we have been informed that the error was quickly identified." We now know that the government didn't identify the error. It was CIBC World Markets. We now know it was sensitive commercial information that should only ever be given to the final bidder. We know that. Then the report goes on to say, "We have documented statements from the attorneys" — I love that American language, "attorneys" — "involved, verifying that the data were retrieved from or destroyed by those who had access to it," so fill in the blanks there. It would be the lawyers from CN saying: "Oh yeah. We've destroyed it."

The minister said that process took three days — minimum three days — from the time it was identified. Well, whoop-de-do — and it's the fairness adviser's assessment that there was no problem there? You don't think getting commercially sensitive data that didn't go to anyone else didn't help CN in its bid?

On the radio the Charles River Associates person who prepared this report said there was a third leak. What was the third leak?

Hon. K. Falcon: On the first point of her question, I would just remind her that one of the reasons why we engaged Charles River Associates in a large, complex transaction like this is to ensure that we have an independent analysis of the process to ensure that the process is not just fair but is seen to be fair. I do remind the member that Charles River Associates, in his report with respect to the issue that the member opposite is talking about, did take pains to point out that it didn't have any effect on the outcome of the deal itself.

In respect to the second part of the member's question, the third leak referred to a shipper analysis report, which was done on the kind of issues that may be potential issues with respect to shippers. That information was not based on the actual bids that had come forward. This was just based on the potential issues that could be associated with shippers prior to the actual bids coming in.

J. MacPhail: I just would like to go back to the minister's statement that Charles River Associates says that the leak we've just been discussing of commercially sensitive data to CN had no bearing on the final outcome. This report doesn't reach that conclusion at all. It doesn't reach that conclusion at all. When did the other bidders become aware that commercially sensitive data had been leaked to CN?

Hon. K. Falcon: I don't have that information, but I will try and get that for the member opposite.

J. MacPhail: Did the other bidders become aware of that leak of commercially sensitive data to CN prior to the conclusion of the bidding process?

Hon. K. Falcon: We're going to try to confirm that date for you, because frankly, I haven't got an exact answer for you. I'd like to get you the right answer, so we'll get that.

J. MacPhail: Well, it wouldn't surprise me in the least if it wasn't until around November 19 that the other bidders found out about the extra-special information that CN was leaked, because on or around November 19 the CBC learned that CP Rail and Omnitrax, companies bidding to take over B.C. Rail, had written a letter to the Premier complaining about preferential treatment given to CN Rail. Both CP and Omnitrax expressed concerns about the fairness of the government sale process of B.C. Rail. Both letters indicated that CN was receiving preferential treatment during the bidding process. In those letters, what did CP Rail and Omnitrax list as preferential treatment?

Hon. K. Falcon: The member is referring to a situation where it was actually CPR and Burlington Northern Santa Fe and not Omnitrax, as the member indicated. Those two firms were concerned regarding a meeting arranged between a representative group of shippers and CN. The CPR and Burlington Northern Santa Fe were concerned because they thought there may be information provided about their operations. That wasn't the case. They were subsequently made aware of that fact, and that settled that issue.

J. MacPhail: So that's what both people were writing about in the letters to the Premier? Would the minister make the letters of complaint available? He's giving us assurances that's all that was contained in them, so I assume he'll make the letters of complaint public.

Hon. K. Falcon: Yes, they were both about the same issue, and as far as releasing the letters, it's subject to whatever the Freedom of Information and Protection of Privacy Act says. I would have absolutely no objection to having those released.

J. MacPhail: Of course, it all depends on what the minister's answer is about when his government in-

formed the other bidders of the sensitive leak of information about the commercially sensitive data, the leak that went to CN — whether the other bidders ever even knew about that leak and whether, indeed, the bidders would have had a chance to complain about that in their letter to the Premier. I assume the minister will be able to get that date for me — about when the other bidders learned of the leak to CN — before the end of these estimates. Also, I assume I can have the letters before we finish these estimates as well.

Who dropped out of the bid? Who in their letters to the Premier said that they were dropping out of the bidding process?

Hon. K. Falcon: I can confirm that CPR did withdraw from the process late in the stages and that Burlington Northern Santa Fe was never part of the process.

J. MacPhail: Perhaps the minister could identify who the bidders were from beginning to end and who remained at the end and who dropped out when.

Hon. K. Falcon: There were four first-round bids, and the four parties in the first-round bids were CPR, CN, Omnitrax and a firm called RailAmerica. Then RailAmerica dropped out, and in the second round there were three bids: CPR, CN and Omnitrax. As I indicated, CPR dropped out in the very late stages, leaving the final CN and Omnitrax.

J. MacPhail: Well, when I asked about Omnitrax expressing concerns, the minister said: "No, no. It was Burlington Northern Santa Fe." Perhaps the minister could clarify it. They were one of the three final bidders of whom two dropped out. CP Rail dropped out. What was the status of Omnitrax? Weren't they the ones complaining?

Hon. K. Falcon: Forgive me. I'm not being at all cute about this. I'm just trying to explain what I think I understand and hear clearly in terms of the relationship between Burlington Northern and Omnitrax. It would seem that Omnitrax was kind of like the lead bidder. They had some kind of strategic relationship with Burlington Northern, but it was just Omnitrax that was legally and in every other way the bidder in this process. They clearly had some kind of strategic relationship. Burlington Northern had written the letter because they were concerned that they didn't want any information about their company being provided to shippers.

J. MacPhail: Okay, but my gosh. I accept that the minister is just trying to clarify the record, but Burlington Northern was only listed and its complaint only made public through Omnitrax because Omnitrax was the bidder. I mean, this was all part of the public record at the time. The Omnitrax group wrote a letter of complaint because one of their partners, Burlington Northern, had an issue about the leak around information about their company to shippers or whatever.

I want to get back to CP Rail in a moment, but I also want to ask a question about the third leak about shippers' information. The minister said that leak was to the media. Was that the first time information had been leaked? Or was it leaked prior to that to other participants in the process?

Hon. K. Falcon: On the last point first, I'm not aware of that information being provided to any of the bidders at all. This was information that was prepared for the evaluation committee to assist them as they prepared to go to the bid process. I'm not aware that it was leaked to anybody other than the media, which I indicated.

To the first point of the member's question, I do want to emphasize that Omnitrax never had any complaints about this process from beginning to end. It was their strategic partner, Burlington Northern, that was concerned about the aspect having to do with information being provided to shippers about their operations. They were subsequently relieved of that concern.

J. MacPhail: The Minister of Finance is on record in his estimates saying that he called the failed bidders after this process finished. He was on record telling me that he called Omnitrax, a failed bidder. Then he had dinner with them after, too, because Omnitrax wasn't satisfied with the private telephone call. They actually wanted to have a private dinner.

The minister must have called or someone in government must have called CP Rail, as well, if the Minister of Finance said it was government's practice to call the failed bidders. It was a brand-new practice to me, but hey, what do I know?

If the Minister of Finance's word about Omnitrax holds true — that the government contacted the failed bidders — surely someone must have talked to CP Rail. CP Rail only pulled out days before the bidding process concluded, and CP Rail let it be known that they were dissatisfied with the fairness of the bid. Who called CP Rail?

Hon. K. Falcon: I believe Minister Collins — and you would have to confirm independently with him — did call CPR, as I believe he did call all the bidders that had been unsuccessful. My understanding is that the purpose of those phone calls was, essentially, to extend appreciation for the efforts, time and money they had invested in the process and to let them know the government appreciated the fact they'd invested the time, money and resources.

J. MacPhail: Yeah, I'm not quite sure…. I think that's probably a first. I don't think there has ever been

another minister in history, depending on political stripe, that has done that — ever.

We're assuming it's good business if all of the bidders were treated fairly. The minister says: "Oh, it's good business." We have no idea whether the bidders were treated fairly. What we do know is that Omnitrax was the only one that got a private dinner with the Minister of Finance after he made that phone call to them. He made the phone call, and then they wanted a private dinner with him, and he gave it to them. No staff, no bureaucrats — just Omnitrax and the Minister of Finance. There was also a bidding process going on for the rail spur out to Roberts Bank during that period of time as well.

Is the minister suggesting that yes, CPR was called, but he doesn't know the nature of the conversation? Or is he saying I should ask or the media should ask the Minister of Finance whether he called CP Rail or not? We know he didn't have a private dinner with CP Rail the way he did with Omnitrax.

Hon. K. Falcon: Yes, as I explained to the member, the Minister of Finance did make those phone calls. The phone calls were made in the spirit of thanking them for their involvement in the process.

Hon. K. Falcon: You'd have to ask the Minister of Finance. I haven't got the slightest clue.

J. MacPhail: If the Minister of Finance said he made the calls to just reassure them that everything was fine, surely there must be some record. There must be some feedback given to show the fairness and the balance the calls took. We know that only Omnitrax got a private dinner with the Minister of Finance after that. They're the only ones. Pat Broe, who is the CEO…. I think Broe partnerships owns Omnitrax. We know they got a private dinner. We know CPR didn't get a private dinner. Is there anything in the analysis, post–bid process, that indicates what CPR said as to why they pulled out of the bidding process?

J. MacPhail: The minister sort of said off the record or off-mike that it's good business practice to make these calls. How is it good business practice to call them after they've pulled out of a bidding process just days before the final announcement is made, and nobody in government knows why they pulled out? How's that good business practice? What is learned from that?

Hon. K. Falcon: Two points. One is that Charles River Associates, as the member knows from reading the report, did interview all of the bidders in the process prior to releasing his final report. That was reflected in Charles River's final report.

With regard to the Minister of Finance, I can tell you that the Minister of Finance is tireless in his efforts to promote British Columbia and those that are considering investing significant dollars into the province. I take my hat off to the Minister of Finance, because I think that what he is trying to do is extend his hand of appreciation to those that are taking the time, energy and commitment to try and see how they can invest in British Columbia and improve the province.

J. MacPhail: Can the minister refer to the Charles River Associates final report and read into the record what it says about why CPR withdrew from the bid?

Hon. K. Falcon: We'll dig up that information and provide it to the member at a later point.

J. MacPhail: I don't know why we can't do it now. That's what estimates are for. I've read the final report, and I can't find anything about why CP Rail withdrew from the bid. It doesn't say a word about that. That's why I'm asking the minister these questions about why CP Rail pulled out of the process.

The reason why these questions are so key is because…. We're going to get into the legislative raid, but let's remember that this government had to cancel the second part of the privatization of B.C. Rail. Selling the spur line to Roberts Bank — that sale actually had to be cancelled because of the police investigation.

It's not like these are questions just out of political curiosity. I'm trying to figure out what the business acumen of this government is and what work they actually did to demonstrate impartiality, fairness and balance around the CN successful bid. The reason why I'm sure the minister is going to have trouble finding any quote in the Charles River Associates report giving information about why CP Rail pulled out is because there isn't anything there.

Now, November 19, we have CP Rail and one of the partners in the Omnitrax bid complaining about fairness. November 25, the government announces that it has accepted CN's offer — big splashy announcement. I wasn't invited. I'm not quite sure why. It seems to be a trend of this government not to invite opposition members to an announcement. It was not at all the practice of the previous government to prevent opposition members from attending. They were always notified. This government never does that. Anyway, it was a big splashy announcement, and lo and behold, CN was the successful bidder.

Then legislation is introduced, and I debate that legislation in the House with the previous Minister of Transportation. I'll be examining what the previous Minister of Transportation said during the debate of legislation allowing for the sale of B.C. Rail Properties Ltd. with the minister later on. That was November 25. Then the legislation was passed that week.

December 1, 2003, the B.C. Attorney General is told by his staff that a case requires the appointment of a special prosecutor and may involve the search of the

B.C. Legislature. December 27, 2003, the B.C. Solicitor General calls the Premier of B.C., who's on vacation in Hawaii, to tell the Premier to expect an important call in the next day or so. The Solicitor General says later that he did not give the Premier any details.

December 28, 2003, the RCMP and the Victoria police department execute nine search warrants at seven locations across the province, including two offices in the B.C. Legislature. The Solicitor General again calls the Premier to brief him on those legislative police raids.

December 29, 2003, Dave Basi, who was the ministerial assistant to the Minister of Finance, is fired from his job as ministerial assistant, and Bob Virk, who is the ministerial assistant to the former Minister of Transportation, is suspended with pay.

The budget for this minister's office, according to the supplement to the estimates, was $415,000 for the year '03-04, and it's $415,000 for the year '04-05. How much of the minister's budget for '04-05 has gone already to Mr. Bob Virk?

Hon. K. Falcon: The response to the question regarding the budget implications of Mr. Virk's salary…. We're one month into the new fiscal. That represents one month of Mr. Virk's salary. I actually don't have what his monthly salary is at my fingertips. It does create a pressure, candidly, but we will deal with it, and it won't have any impact on the overall bottom line of the ministry.

J. MacPhail: The minister is saying that Mr. Virk is still on his, the minister's, budget payroll. Where is Mr. Virk, and what are his responsibilities?

Hon. K. Falcon: Mr. Virk is on paid leave and continues to be on paid leave.

J. MacPhail: What is his responsibility in reporting in to the minister for that leave? How does one get on paid leave? Is there medical documentation? What are his responsibilities to keep this minister informed?

Hon. K. Falcon: As that member knows well, there is a police investigation ongoing. During the time of that police investigation, we have had no direct contact — nor will we have any direct contact, myself or my ministry staff — with Mr. Virk for obvious legal reasons.

J. MacPhail: I am not aware of a paid leave in the public service that permits this kind of lack of contact. What are the terms of the paid leave? There are very strict rules in the public service about how one stays on paid leave.

Hon. K. Falcon: That is, ultimately, a decision made through the Premier's office because they actually employ him. He gets paid out of my ministry budget but is employed through the Premier's office.

J. MacPhail: What is the Treasury Board order that is being complied with that has Mr. Bob Virk on paid leave?

Hon. K. Falcon: I would suggest that the member canvass the Premier's office during the Premier's estimates.

J. MacPhail: I love it when people delegate up. I just think this minister is showing courage beyond belief today, Mr. Chair. I mean that seriously. I'm quite taken aback at his courage.

So I'm to ask the Premier why Bob Virk is suspended with pay and what Treasury Board order applies to allow him to be suspended with pay. Great. I'll do it. I can hardly wait for the Premier to take those questions. They will be on camera in the Legislature. I can hardly wait. I admire the minister's courage.

Tell me who the staff are in the minister's office compared to the staff complement prior to the suspension of Mr. Virk.

Hon. K. Falcon: I currently have four staff in my ministry office, and we had four staff prior to my becoming Minister of Transportation. The four staff, for the record, are the ministerial assistant, my executive assistant, an administrative coordinator and a clerical position.

J. MacPhail: The minister said there were four staff prior and four staff now, and Mr. Virk is still being paid out of the minister's budget. How does the minister anticipate staying even in his ministry operations — $415,000 budgeted for last year and spent last year, and the same amount spent this year. The minister has already admitted that that creates a pressure. What's the solution for the pressure?

Hon. K. Falcon: As I told the member before, it does create a pressure — there's no question about that — but as I've said to the member, we're monitoring that pressure carefully. One thing I can absolutely guarantee the member is that it will have no impact on the overall budget of this ministry. We will manage it.

J. MacPhail: I have no idea how the minister is going to do that. I mean, if he's guaranteeing it, he must have a plan, so just let's outline what this means. Bob Virk, the ministerial assistant who's suspended with pay…. And the minister can't tell me how he's suspended with pay, yet he's sure he's got a plan to manage it in his own budget. That's interesting.

Bob Virk gets paid over $63,000 a year. He's on paid leave — suspended with pay. I'm sorry, Mr. Chair. Let's be very clear: suspended with pay. That's why I'm dying to see what the Treasury Board order…. Remember those things called Treasury Board orders? They're the rules you actually have to follow for spending money. And

there are all sorts of orders about how you deal with the public service — OICs, union, management. There are rules that govern this, so I can hardly wait to see Treasury Board order 990: "When a ministerial order is suspended with pay." I predict there isn't one.

The fiscal year has started. The minister admits that Mr. Virk is still on the minister's payroll. He can't explain how he's going to manage that fiscal pressure because, of course, Mr. Virk is a spare. The rest of the office is fully staffed.

This Minister of Transportation said on Prince George radio on April 21…. He was asked about Mr. Virk, and he — the Minister of Transportation — said: "He is innocent of everything in the eyes of everyone." What does that statement mean?

Hon. K. Falcon: …but I suppose anything's possible. I think what I've been trying to say, and perhaps not very eloquently, is that this does create a challenging situation. There's no question about it. One of the challenges is that we always have to remember there is a presumption of innocence. That is a standard that has guided our justice system for as long as we can all attest, and we appreciate the importance of it. That's really all I can add to that. That would have been what I was attempting to say, if the member has me quoted as saying what the member read into the record.

J. MacPhail: I fully understand it's hard to keep up with everything a politician says, but that's a direct quote. It was actually radio. It was radio, and we played it back. Okay. The minister says it is a presumption of innocence — and it is — but in our business, one also has to be seen to be balanced and fair as well.

Of course, we have Dave Basi being fired and Bob Virk suspended with pay — for exactly the same raids on the Legislature. The Minister of Finance says it was because of the important work Mr. Basi did that he had to be fired and Mr. Virk not. I thought that was interesting, because the ministerial assistant who briefed me on the B.C. Rail legislation was Bob Virk, not Dave Basi. He had a pretty important job, Mr. Virk did, as well. He actually had access to the legislation before the legislation was introduced into the House. Bob Virk briefed me, Mr. Chair.

Then we find out later that the B.C. Rail deal is under suspicion, or parts of it, as a result of those raids, yet Mr. Virk is innocent until proven guilty, and Mr. Dave Basi is fired. That's even after the Minister of Finance admits that Dave Basi never saw legislation, never saw Treasury Board documents, never saw anything as far as I could tell. Mr. Virk saw all of those. Mr. Virk had access to the confidential Treasury Board information and access to the legislation far before it was tabled in the Legislature, and he's suspended with pay.

Since his appointment as Minister of Transportation, has the minister discussed the situation of Bob Virk with Martyn Brown?

Hon. K. Falcon: Regarding these issues, if I'm not incorrect, I think the member had an opportunity to canvass these quite extensively with the Minister of Finance. One thing I will say is that certainly, I'm not prepared to discuss personnel issues here or comments related to personnel issues.

J. MacPhail: No, I didn't have an opportunity to canvass this stuff about Mr. Bob Virk with the Minister of Finance, so my question stands. Did the minister talk about his situation with Mr. Virk being on suspension, being suspended with pay? Since he became the Minister of Transportation, has he discussed that with Mr. Martyn Brown?

Hon. K. Falcon: I've already answered that. One thing I would reiterate is that I'm happy to discuss the budget implications that Mr. Virk's status vis-à-vis paid leave has on my ministry budget and the vote, but that's the extent to which I'm going to be discussing personnel matters. It is, as I indicated, the chief of staff in the Premier's office who is responsible for the hiring of employees and ministerial and executive assistants. The member knows that, and she will have every opportunity to canvass that in the Premier's estimates.

J. MacPhail: Sorry, I missed the minister's answer. I'm sorry. It must have been because I was trying to get out the door. What did he say in his answers to meeting with Martyn Brown? He said he'd answered that question. Would the minister mind repeating his answer about meetings with Martyn Brown concerning Bob Virk?

Hon. K. Falcon: Essentially what I just said, which is that I wasn't prepared to discuss any conversations regarding personnel issues and that I was prepared to discuss financial impacts as they may relate to the vote and to my budget. I'm happy to do that, but that's the extent of the discussion I'm prepared to have.

J. MacPhail: How is the Bob Virk situation a personnel matter? Could the minister just outline for me…? He keeps saying this glibly. Perhaps he could tell us how it's a personnel matter.

Hon. K. Falcon: I'm not sure what the member is driving at. I'm just not sure what more I can add to that for the member's benefit.

How is it a personnel matter? The member's on a…. Well, I just don't know that I can add anything more

J. MacPhail: Well, the minister felt absolutely comfortable talking about Bob Virk on radio. On April 21 in Prince George, he said that he's innocent of everything in the eyes of everyone. That was April 21. Today is — what? — April 26. He said in the Legislature hallway…. This is what he said, the Minister of Transportation. He explained to the media that the difference in the two cases, between Bob Virk and Dave Basi, is as follows: "In the one case, they — the Premier's office — felt that there were serious enough allegations being presented by the RCMP to terminate, and the other was much less clear. And so it was felt it was appropriate to put on paid leave until the RCMP investigation was completed." Then the next day it turns out that all of a sudden, the government is on a defence of: "It's a personnel matter."

I'm trying to jibe: how did we move…? What advice did the minister receive to say that it was a personnel matter? I'm just curious. A personnel matter, to me, is how much you get paid for what reasons and why you should or shouldn't get paid — whether you're being disciplined or not. I've asked the minister this question of why the ministerial assistant is being paid. He can't tell me. Clearly, he hasn't looked at that from a personnel point of view.

Is he being disciplined? I don't know. No one said he's being disciplined. He's suspended with pay, Mr. Chair — rough life — so that's not a personnel matter. What happened between the minister making the statement I just read into the record in the hallway to the next day, saying it was a personnel matter? What advice did he receive about it being a personnel matter? That's all I'm asking him. Explain.

Hon. K. Falcon: The member knows well that I, in the House the next day, apologized for making that statement, that it was a statement incorrectly made by myself. My understanding of this whole episode, as the member knows, is largely based upon a distillation of media reports. Most of us were in that same position, including the member opposite. I acknowledged that the statement that I made was incorrect, and I have nothing more to add to that.

J. MacPhail: Let me add another little chain in the logic of this government. Here's what the Government House Leader, the Minister of Finance, said on March 2 when I asked him about whether there had been any conversations between Mr. Brown and the Minister of Finance about the firing of Mr. Basi: "I can't tell the member on what basis Mr. Brown made that decision…. I don't know who Mr. Brown consulted, if anybody, in making this decision. It certainly was within his job description to make that determination." That's what I gleaned from the Minister of Finance.

Then I move my questions over here. Bob Virk is suspended with pay. The minister can't tell me on what basis he's allowed to suspend someone with pay. He can't quote the Treasury Board order or the public service directive. He can't do any of those, and he's paying for Mr. Virk. Mr. Virk is extra to his ministerial complement. He has to stay within the same budget as last year, and he assures me that he's got a plan to stay within budget.

Well, unless he's going to fire someone else out of his minister's office, Mr. Virk is the basis upon which he will manage this extra pressure. This minister makes a statement both on radio, in the hallway, about the circumstances under which Mr. Virk remains suspended with pay, but to me, he says it's a personnel matter. Based on the fact that the Government House Leader told me that Mr. Brown made these decisions, based on the fact that this minister has already referred me to the Premier and Mr. Brown on these questions, kind of delegating up, all I'm asking the minister is if he has discussed the situation of Mr. Bob Virk with Martyn Brown.

Has he gone to Martyn Brown and said: "Hey, Martyn, I've got a pressure in my office here with the guy being suspended with pay and no budget to pay him"? Could he just…? That's not divulging any personnel secrets. I can't even figure out how this is a personnel matter, myself. I can't figure out for one second how this government has justified that this is a personnel matter, but I'm asking the minister: has he informed Martyn Brown, or has Martyn Brown informed him, of the future pressures on this minister's office budget?

Hon. K. Falcon: My answer is unchanged. It's the same as the last answer and the answer prior to that.

J. MacPhail: Are you saying that question is…? That's why I asked the minister to explain how that's a personnel manner. How is my question intruding on a personnel matter? Teach me — I'm here to learn so I'll know what questions not to ask in the future — how that question intrudes on a personnel matter.

Hon. K. Falcon: As I've already reiterated earlier, this is an area that comes under the responsibility of the chief of staff in the Premier's office. The member knows that full well. She will have every opportunity to canvass that during the Premier's estimates.

J. MacPhail: That's shameful, Mr. Chair. That's absolutely shameful that the minister is denying me an opportunity to discuss his ministry's office budget under the guise of a personnel matter. Who gave the minister that advice to say that this was a personnel matter and that he can't discuss it?

J. MacPhail: Then why couldn't the minister answer my question on the basis of what personnel matter? Is there a grievance filed? Let's start there.

Hon. K. Falcon: The member knows full well, as I've said, that she will have every opportunity to can-

vass this through the Premier's estimates. I would remind the member that we're here to discuss my vote. I'm happy to discuss questions related to the vote, but we seem to be getting off on a tangent.

J. MacPhail: Yes, I understand these questions are uncomfortable. It's directly related to the vote of $415,000 in the minister's office. He's already admitted that he's got a plan to deal with the pressure of paying Mr. Virk while he's suspended with pay. He's got a plan, and he just guaranteed us that he wouldn't be going over budget, so I don't know why these questions aren't absolutely in order.

The minister himself is saying he came to the conclusion that this was a personnel matter after he made that statement in the hallway that he then had to apologize for or admit that he was incorrect about the next day in the Legislature. When the minister made that statement in the hallway to the media about Martyn Brown determining that the RCMP investigation led to the suspension of one and the firing of the other, and then the next day he, the minister, corrected the record and apologized for making that statement in the hallway, did he himself come to the conclusion in the meantime that it was a personnel matter? He didn't discuss it with anyone?

Hon. K. Falcon: The member knows well that I was duly appointed to the portfolio. I was asked a question. I answered the question based on the information that I was aware of, which was essentially a distillation of what I had read in the public media reports, which were ultimately found to be incorrect. The moment I realized that, I acknowledged that in the House, and I think I've been pretty clear about that with the member.

With regard to the vote, as I've said to the member, we are talking about the vote. She is referring to one line in the vote, but the vote itself is an $811 million budget. I've indicated to the member that this does represent a pressure, starting at the first month of the new fiscal, and we will manage it within the vote. I'm extremely confident. In fact, I will tell the member that that's exactly what we will do. I'd rather not have a pressure, but we all deal with pressures in our life, and I'll deal with this one.

J. MacPhail: Can the minister answer my question? Between the day that he said in the hall…. I'm going to read it into the record again: "In the one case they — the Premier's office — felt that there were serious enough allegations being presented by the RCMP to terminate, and the other was much less clear. And so it was felt it was appropriate to put on paid leave until the RCMP investigation was completed." In March the Minister of Transportation said that. In the House the very next day, when questioned about this, the minister said: "Actually, the member opposite is correct in the sense that my comments were inappropriate. I had based them on media coverage that I had distilled over the last number of months. That was wrong." Did the minister come to that conclusion without any advice? Did he discuss that matter about how his comments were inappropriate with anybody?

Hon. K. Falcon: Absolutely. I apologize if I misunderstood the tenor of the question that was asked previously. Yeah, absolutely. In fact, when the reports were published, the Minister of Finance asked me if that was what I said. I said: "That's what I said." He said: "Were you aware that that was what you said?" I said: "Well, that's all I know, based on the media reports that I've read." He pointed out to me that that wasn't the case. He was absolutely correct, and I was incorrect. I immediately sought to rectify that the next day in the House by pointing out that I was incorrect. I made my comments when I shouldn't have, based on a distillation of information.

J. MacPhail: It was the Minister of Finance that advised you that it was a personnel matter. Is that what he said? He said that it's a personnel matter, and you shouldn't be discussing it.

Hon. K. Falcon: No. As I said to the member, the Minister of Finance let me know that the comments I had made were incorrect. Once he apprised me of that, I immediately sought to correct the record the next day.

J. MacPhail: Yes, okay. Fair enough. But how has the minister moved on to hiding behind the shield of saying that this is a personnel matter? How did he reach that conclusion?

I don't agree with the minister that this is a personnel matter. That's why I'm challenging him on this. How did the minister now learn to use the defence, the hiding behind, the shielding from questioning that Mr. Virk's circumstances are a personnel matter? What advice did he receive concerning that?

Hon. K. Falcon: As I've said to the member before — I've said it numerous times — I'm not trying to hide behind a shield or whatever term the member used. All I'm doing is pointing out the obvious fact that the responsibility for the individual that the member speaks of is through the chief of staff and in the Premier's office, and that's where she should be directing those questions.

J. MacPhail: Okay, but what I'm trying to figure out here is how the government came to the conclusion that this was a personnel matter. If the minister is just sidelining me to ask questions of the Premier, then the Premier will use that answer too. He'll probably be really upset that he's being asked the questions, but I'll just be able to refer him to the estimates of April 26, 2004. And it wasn't me that referred these matters to the Premier; it was the Minister of Transportation.

I could save the Premier a lot of time if the minister could explain to me how this is a personnel matter, because then I'll at least know that the government has

done some sort of analysis of this and that that's what the Premier will be using as well. It's just completely inappropriate for this minister to upload to the Premier and perhaps at the same time mislead me by saying that I can get some answers there. That's why I'm trying to figure out what the government's rationale is.

Either Martyn Brown or the head of the Public Service Agency or the minister's own personnel director or industrial relations director: who gave the minister advice that this was a personnel matter? The minister is using that as a shield because it has legal consequences, legal implications to it. There must have been some advice.

Hon. K. Falcon: I've answered this question repeatedly. As I told the member many times before, this is something she can extensively question, if she feels it's appropriate, at the Premier's estimates. Bob Virk is a staff member. Clearly, there's a personnel aspect related to that. She'll have every opportunity to engender herself in the questioning through the Premier's estimates.

J. MacPhail: Let me put this to the minister. There's no personnel matter here. Mr. Virk is on paid vacation at the taxpayers' expense. That's what he is. There's not one iota of personnel matters or legal matters involved here, because the minister can't put it on record. He's on paid vacation leave. That's what he's doing, and the public has every right to know why he gets a vacation at the taxpayers' expense. He isn't being disciplined. "He is innocent in the eyes of everyone," says the Minister of Transportation.

There is no grievance filed. There's no disciplinary report on Mr. Virk's file. This isn't a personnel matter; this is a shameful giveaway to Mr. Virk of thousands of dollars every month for him to sit God knows where. He doesn't even have to report in. He's probably out of the province on vacation. It's shameful that the minister is trying to hide behind this being a personnel matter. There's not one legal scintilla of reason why this minister can claim this as a personnel matter, yet he refuses to answer questions.

You know, this government refusing to answer questions about Bob Virk and Dave Basi is embarrassing — absolutely embarrassing. It just kind of indicates that they have something to hide. Who determines what Mr. Virk's vacation is?

Hon. K. Falcon: I've made it pretty clear to the member that this is a personnel issue, and I think it's time we move on.

J. MacPhail: I always appreciate it when I receive advice from a minister to move on. I always take that under very serious advisement.

Is Mr. Virk collecting vacation credits while he's suspended with pay? These are all absolutely legitimate questions. They're not personnel questions unless the minister can stand up and say: "The reason why this is a personnel issue is because there's some area of disagreement between the ministry and Mr. Virk and his treatment." The minister cannot demonstrate that at all.

Hon. K. Falcon: I actually have no idea. I would have to find that out for the member, or perhaps more appropriately, when she has the opportunity in the estimates of the Premier's office, she could probably ask them.

J. MacPhail: Okay. I'm going to ask the Premier about the vacation pay being built up by Bob Virk. I can hardly wait. I can hardly wait to get into the Premier's estimates. Mr. Chair, let's move on. I'll be preparing all of these questions to the Premier — good news.

December 31, 2003. B.C. Finance minister returns from a vacation in Hawaii — temporarily returns. The Finance minister tells reporters that he knows no more than the public about the case and adds his assurance that the raids will not affect government business.

January 2, 2004. The B.C. Supreme Court hears an application from the media to unseal the search warrants that allowed for the raid on the Legislature. The case is put over until January 14.

January 7, 2004. The Premier meets with reporters in Victoria after returning from vacation in Hawaii and says that he doesn't know much more than the basic details. He also reveals that Dave Basi received $54,000 in severance pay. I'll be asking the Premier about that as well.

January 14, 2004. Associate Chief Justice Patrick Dohm of the B.C. Supreme Court adjourns the media's request to unseal the search warrants. He schedules further hearings on January 21 to give the Crown a chance to find out how long the investigation may take and to decide whether an edited summary of the warrants can be released.

On March 1, 2004, the RCMP meets with Chris Trumpy, who sits on the committee evaluating bidders on the Roberts Bank sale of B.C. Rail. That's a spur line of I'm not quite sure how many kilometres that goes to Roberts Bank and is up for sale by this government. It's a multiple tens-of-millions-of-dollars sale. The RCMP provides Mr. Trumpy with information they gathered during a criminal investigation. The information causes Mr. Trumpy "to believe that one or more of the advisers" to the bidders may have received confidential information. This information was released to all of us on March 10, 2004.

Does the minister know what was divulged to Mr. Trumpy during his meeting with the RCMP, and will he tell us on the record?

Hon. K. Falcon: I know some of the elements that were divulged to Mr. Trumpy, but as the member can, I'm certain, appreciate, as there is an ongoing investigation, I'm not in any way at liberty to talk about any of those.

Hon. K. Falcon: That's on the advice of the RCMP, whom we worked — I should say, Mr. Trumpy worked — very carefully with to ensure that we were very careful of what we were able to say. I should foreshadow for the member that I am going to be very, very careful about what I say in the interests of making sure that I don't, even inadvertently, jeopardize any ongoing investigation by the RCMP.

J. MacPhail: Okay, so the RCMP actually communicated directly with the minister and said he can't talk about any of this stuff?

Hon. K. Falcon: No, that would be through Mr. Trumpy. I never had any direct communications whatsoever.

J. MacPhail: Is there something in writing? A bid was cancelled on the basis of this.

Let me approach this from a different aspect. What did the government say to the bidders for that Roberts Bank spur line in the cancellation of the sale?

Hon. K. Falcon: They would have heard exactly what you and the media and everyone else heard when I stood up in the press theatre and read out a statement regarding the port subdivision.

J. MacPhail: That was the first time the bidders on that spur line heard about the bid being cancelled? Were there any financial implications for the bidders as a result of that?

Hon. K. Falcon: With regard to cancelling, they knew going into this process that the province had the full and unreserved right to cancel the bid process at its own choosing.

Referring to the member's question about when the other bidders found out, I'm informed that the moment I was up speaking in the press theatre announcing the decision, TD Securities, the investment banker adviser was notifying the bidders at the same time.

Hon. K. Falcon: The evaluation committee made a recommendation to me, as the minister, and I agreed with that recommendation.

J. MacPhail: Did the minister take it to cabinet, or was it a unilateral decision of the minister?

Hon. K. Falcon: The short answer is yes. The more explained answer to the member opposite is that I certainly advised the Premier's office and let them know that that was going to be the decision, and there was no argument about the decision that was made.

J. MacPhail: The information was released…. I think the minister made that announcement on March 10.

Hon. K. Falcon: The day prior would have been the day that I would have been aware that the recommendation was going to be coming forward. A letter was being drafted by the evaluation committee that was going to be confirming the decision they had come to that day. That letter arrived the next day, on March 10, and as you know, I immediately went to the press theatre to give the press conference.

J. MacPhail: Are there any financial implications for the cancellation of that bidding process?

Hon. K. Falcon: The member will recall that I was asked that question at the time. I did indicate that there would be costs associated with it. I had no idea what those costs were, but I had made the assumption that they were going to be in the hundreds of thousands of dollars.

We're in the process of finalizing what those total numbers will be, but they're going to be in the range of $900,000. We'll have a final number for the member as soon as we get those numbers consolidated.

J. MacPhail: I assume this is cost that the government has to pay to the bidders for cancelling the bidding process. Was there any contractual obligation? What is the nature of the $900,000 that the government has to pay as a result of the failed bid?

Hon. K. Falcon: To clarify, there's no cost paid to any of the bidders. The costs are typically associated with the kind of legal accounting and investment banking costs associated with a transaction like this. Much of that information, I should point out to the member, is actually valuable, useful information that government can certainly avail itself of in the future.

J. MacPhail: Do the bidders have any right to sue the government? Do the bidders themselves get any costs awarded for their bidding process — for the effort they put into this?

Hon. K. Falcon: The RFP was very clear that government retained the sole right to cancel the bid process.

J. MacPhail: Is it that the bidders don't get any money paid from the government to themselves for the work they put into this bidding process? That's a different question.

J. MacPhail: Is there any ability to bring a lawsuit forward by any of the bidders?

Hon. K. Falcon: I have absolutely no idea. I have no control over that, and I'm certainly not going to speculate on that at all.

J. MacPhail: Given the fact that the Minister of Finance and this minister confirmed that it's the practice of this government to call failed bidders after they've lost out, who made the calls to the bidders in this process?

Hon. K. Falcon: I understand that John McLernon, chair of the B.C. Rail board and chair of the evaluation committee, did make some phone calls to those folks.

J. MacPhail: Why were these failed bidders treated differently than the failed bidders of the original sale of B.C. Rail? Why was it not the Minister of Finance? The Minister of Transportation just said that the Minister of Finance likes to do this and spends a lot of time doing this. Why was this process treated differently?

Hon. K. Falcon: I think it's important to point out that the term "failed bidders" is inappropriate. The government made the decision to terminate the port subdivision process.

J. MacPhail: I'm sure the bidders would look on it as a failed opportunity — certainly a failed process. I know this government is actually having a lot of trouble attracting investment here through their Partnerships B.C. and their privatization operations. This might be a good indication of why.

Let me be a little more generous, then. There were bidders in this process who didn't succeed. They didn't get the product upon which they were bidding, the same as Omnitrax and CPR in the $1 billion sale of B.C. Rail. Why didn't a politician call them?

Hon. K. Falcon: It's the same answer as the one before. The only distinction I think the member would recognize is that one was the completion of a process and the other was the termination of a process in which — appropriately, I think — the chair of the evaluation committee and chair of B.C. Rail made those phone calls to the bidders.

J. MacPhail: The minister made his announcement on March 10 about the cancellation of the bidding process for the sale of the Roberts Bank spur line of B.C. Rail. However, as we've just noted, on March 1, 2004, the RCMP actually advised Mr. Chris Trumpy that they had reason to believe that one or more of the advisers…. Or no. The information causes Mr. Trumpy to "believe that one or more of the advisers" to the bidders may have received confidential information March 1. This information isn't released to the public until March 10.

On March 2, Associate Chief Justice Patrick Dohm releases a summary of the search warrants. Some highlights are: "Whether official 1 and official 2 were offered and/or accepted personal benefits" in connection with government business including B.C. Rail, and whether these officials "passed unauthorized confidential information to persons interested in government business for the purpose of obtaining a benefit." That's what we found out March 2 through the summary of the search warrants.

On March 10 we also find out that government officials will cancel the sale of the Roberts Bank spur line because they have reason to believe that one or more of the advisers may have received confidential information. We don't find that out until March 10.

In response to Justice Patrick Dohm's release of the summary of the search warrants, the Premier states: "It is clear from the court summary that this is a personal issue. It is not an issue with government. It is not an issue with any elected official in government." Who advised the Premier to make that statement, given the fact that on March 1 Mr. Trumpy had been advised that the RCMP knew otherwise?

Hon. K. Falcon: Could I ask the member to clarify the dates again? I'm sorry. I forgot, and then none of us could remember what dates the member had said, so just….

J. MacPhail: On March 1 — this is from the public record, Mr. Chair — the RCMP meet with Chris Trumpy, who sits on the committee evaluating bidders on the Roberts Bank sale. The RCMP provides Mr. Trumpy with information they gathered during the criminal investigation. The criminal investigation causes Chris Trumpy "to believe that one or more of the advisers to the bidders may have received confidential information." That isn't made public until March 10.

In the meantime, on March 2, the very next day, Justice Patrick Dohm releases the summary of the search warrants, where it makes it clear that official 1…. Some of the highlights were that official 1 and official 2 were offered and/or accepted personal benefits in connection with government business, including B.C. Rail. The summary of the search warrants was to see whether these officials "passed unauthorized confidential information to persons interested in government business for the purpose of obtaining a benefit." The two overlap completely. That's March 2.

The Premier, in reply to the release of those search warrants, says: "It's clear from the court summary that this is a personal issue. It is not an issue with government. It is not an issue with any elected official in government."

Mr. Trumpy already has information that a deal is going to have to be cancelled. It affects government business. Who advised the Premier to make that state-

ment on March 2? We know that Martyn Brown called a meeting of all the public affairs bureaus' employees prior to the release of this information. He had a meeting of all of the public affairs bureaus, even the ones working in Human Resources, to talk about the release of these warrants. Somebody was coordinating the government reaction to these warrants. Who advised the Premier to make what we know is an erroneous statement that this was simply a personal issue?

Hon. K. Falcon: It's important to point out to the member that she understands the time line. She's correct in that Mr. Trumpy did receive a visit from the RCMP on March 1. The visit was essentially what I would characterize as a heads-up that there may be some problems associated with information that may have come into the possession of individuals that shouldn't be in possession of that information.

On March 2, as I've stated publicly…. I actually went over this quite extensively with the media in a scrum — it lasted about 30 minutes — where we went over the time line. I indicated that Mr. Trumpy had popped into my office on an unscheduled visit on March 2. If the member is going to ask me the time, I have to be candid and tell her I don't recall the time, to be honest.

That was the first time that I myself, as Minister of Transportation, became aware of that. What I would suggest to the member is that it's evident from the time line that the Premier would not have even been aware of this issue at that time.

J. MacPhail: Okay, but the minister was aware on March 2. On March 3 here's what the Minister of Transportation said. The Minister of Transportation on March 3, after having been informed by Mr. Trumpy about the RCMP's information that one or more of the advisers to the bidders may have received confidential information, tells the media about the differential treatment between Dave Basi and Bob Virk. He said on March 3, fully informed of Mr. Trumpy's information from the RCMP: "In the one case they, the Premier's office, felt that there were serious enough allegations being presented by the RCMP to terminate, and the other was much less clear."

The Minister of Transportation got in trouble for those remarks, because everybody leapt on them to say: "Well, the government knows more than what they're stating about the investigation." It's true. This minister did know more. This minister knew more. He'd already been informed by Mr. Trumpy the day before that, to believe one or more of the advisers to the bidders may have received confidential information.

Hon. K. Falcon: The question was what role Bob Virk played in the minister's office. The member knows well that I've never worked with Bob Virk. Obviously, I wasn't minister at the time that Bob Virk worked in the office. Obviously, it's impossible for me to describe what role he played, but I would presume that he played the role of a normal ministerial assistant — which, the member would be fully aware of, involves liaising with ministry staff, etc.

J. MacPhail: That's why we have public officials advising the minister — so that there's actual continuity of answers. I'm sure the minister knows that a cabinet shuffle is not a reason to not answer questions. Ministerial continuity is a premise of our British parliamentary system regardless of who holds the office.

I know that Mr. Virk was the ministerial assistant advising me on the B.C. Rail sale legislation. I knew he was involved in those discussions before it was tabled in the Legislature. He had access to confidential information around the legislation. What involvement did he have, other than that, in the B.C. Rail deal? Did he meet with the steering committee? Did he attend meetings of the steering committee that directed the sale of B.C. Rail?

Hon. K. Falcon: I have to go back to what I said before, and that is that I wasn't minister at the time that Mr. Virk was involved. I can't possibly even begin to discuss what his level of involvement is, because I can't possibly do that in any knowledgable way that would add any value to this.

I remind the member that we are referring to the vote for '04-05, and the member is referring to the previous fiscal. Unless there is a question associated with the financial implications, I can't add anything for the member.

J. MacPhail: This deal is being booked in '04-05. The sale and the proceeds of this B.C. Rail deal are being booked in '04-05. I always love it when the government tries to say: "Oh my God, you're a fiscal out of order." Wrong. I want to know whether this deal is going to survive or not, and these questions all relate to the survival of this deal. We've got a police investigation into this sale. We've got part of the deal stopped because of a police investigation.

Mr. Chair, these questions are completely in order. If the minister is afraid to answer them, that's a different issue. It is completely unacceptable for this minister to say: "Oh, I wasn't there, so I don't have to answer these questions." It's completely unacceptable, because the minister is being advised by the very people who sat on the steering committee.

Did Mr. Virk attend steering committee meetings regarding the sale of B.C. Rail?

Hon. K. Falcon: I can confirm that Mr. Virk, according to the advice I'm given, attended some of those meetings.

J. MacPhail: That's what our leaks told us too, so I'm glad our sources are exactly accurate. Bob Virk at-

tended the steering committee meetings where the terms of the B.C. Rail sale were discussed. That's what the Minister of Finance said. That's the body that discussed the sale of the B.C. Rail deal. That's what the former Minister of Transportation said in the Legislature when she was ramming legislation through: "Don't worry. The steering committee handled all of these arrangements."

Mr. Bob Virk attended those steering committee hearings, so he had access to inside information. Mr. Virk also saw the legislation before it was tabled in the Legislature, so he had access to confidential information, both financial and legislative. Did Mr. Virk have access to Treasury Board information through the minister's office regarding the sale of B.C. Rail?

Hon. K. Falcon: Again, I'm left in the position of certainly not being prepared to speculate on what information Mr. Virk may or may not have had access to, because I actually don't know. What I can say is that within my office, typically, the ministerial assistant has access to whatever information is at least passing through them to the minister, to myself, relating to cabinet information and Treasury Board information. That certainly wouldn't be uncommon.

J. MacPhail: I'm forced to compliment the minister, again, for his courage. In this case, it's speculative courage, but nevertheless, it's courage.

It is completely unacceptable for the corporate information to disappear with the change of a ministerial political staffer. It is completely unacceptable, so the minister should be able to answer the question. Now he's answering it in a way that actually implicates him, to say that one would have to reach the conclusion that Bob Virk did have access to confidential Treasury Board information.

Being a smart person, I should just sit down and accept that, but I also know the minister knows the answer to that question or can get the answer to that question, because it is simply unacceptable for him to not outright confirm that Mr. Bob Virk had access to confidential Treasury Board information.

Mr. Chair, the reason why this is important is because there's some question about when this deal was actually approved and whether it was approved by cabinet, but we do have everybody admitting that Treasury Board, at least, dealt with this. We can only assume that Mr. Virk, given the practices of ministers' offices, had access not only to confidential legislative information and not only attended steering committee meetings but had access to Treasury Board information regarding the sale of the B.C. Rail deal.

On March 2, Chris Trumpy advises the Minister of Transportation of the RCMP's conversation with him, Mr. Trumpy, that would eventually lead to the cancellation of the Roberts Bank spur line sale. Yet when the Minister of Transportation was questioned on March 3 in the media scrum to which he just referred, when he was asked about whether the Roberts Bank deal may be tainted, the Minister of Transportation said, emphatically, no. Why?

Hon. K. Falcon: The member should know that when you're in the position of minister…. What I received from Mr. Trumpy through a very brief…. When I say very brief, I mean an unscheduled meeting that lasted certainly not more than a few minutes. Mr. Trumpy advised me that he received a visit from the RCMP and indicated he may have information that would suggest there could be a problem associated with it, and he would be getting back to me to talk about that.

That is the full and total extent of what I knew at that point on March 2. That certainly, I want to underscore to the member, is not information that, as a responsible minister, I am going to do anything on until I get some facts and some more information from Mr. Trumpy about what this information has to do with or what the facts are regarding it.

J. MacPhail: I don't care whether the meeting lasted 15 seconds. It's the basis upon which this minister said the decision-making process started to roll about cancelling the Roberts Bank spur line sale. The minister didn't just say, "I'm not prepared to comment," when asked whether the Roberts Bank deal may be tainted. He said, emphatically, no, and he was emphatically misleading at that point because he already had advice that it may be tainted. He already had that advice. He had it on March 2, and on March 3 he deliberately misled the media.

March 1, the RCMP visit Chris Trumpy. March 2, Chris Trumpy visits the minister. March 3, the minister is asked a question about the Roberts Bank deal and whether it's tainted. He says no. No wonder people don't believe this government. No wonder they're suspicious that they're not being told the truth. They have every right to be suspicious. I think that the media…. I will say this. I think the minister deliberately misled the media on March 3 in that scrum — deliberately misled them.

On March 3, I was also in estimates with the Minister of Finance. It was during those estimates that the Minister of Finance said he met with Pat Broe, who's the head of the company that holds Omnitrax, which is bidding on the Roberts Bank spur line sale. It was on March 3 that the Minister of Finance said he met with Pat Broe twice: once before the B.C. Rail deal, the $1 billion sale; and once after that sale.

The Minister of Finance admitted that he met with Pat Broe, the CEO of Broe Companies, of which Omnitrax is a subsidiary, on two separate occasions. Can this minister tell me if he was aware of those meetings?

J. MacPhail: When did the minister become aware that the Minister of Finance was meeting with Pat Broe, the head of Omnitrax, while the bidding process for the

Hon. K. Falcon: The fact is, I'm not even sure when I became aware. I think I recall reading something in the media about the member's questioning of the Minister of Finance in estimates or something. I have some brief recollection that I read something in the media, but that would be it.

J. MacPhail: I just want to clarify. It is this Minister of Transportation who is responsible for the sale of B.C. Rail — am I correct? — including the spur line to Roberts Bank.

When the Minister of Finance was asked questions about these private meetings with Pat Broe by a Vancouver Sun reporter, the Minister of Finance admitted that he discussed the Roberts Bank spur line sale with Pat Broe. He said, "Oh, it was inconsequential," but he did admit to discussing it. That's his interpretation. It was inconsequential — a private dinner between the Minister of Finance and one of the bidders on the Roberts Bank spur line sale while the bidding process was going on. The Minister of Finance admits that it was discussed at their private dinner.

Did the Minister of Finance ever tell this Minister of Transportation about the nature of those discussions? Did he ever declare that discussion in what's supposed to be an open and transparent bidding process, of which Omnitrax was one of the bidders?

J. MacPhail: Well, I guess for reasons other than the RCMP investigation, it's darn good that this deal was cancelled, when you've got those kinds of private meetings going on about an ongoing bid. Thank God for the police raids on the Legislature is all I guess we can say here. Thank God.

Has this minister ever met with anyone, lobbyist or bidder, regarding the sale of B.C. Rail — any aspect of the sale of B.C. Rail?

Hon. K. Falcon: I took some time on that, member, because I'm trying to rack my recollection from previous to this when I was also a Minister of State for Deregulation. To the very best of my recollection, I don't recall having a meeting with anybody associated with B.C. Rail.

J. MacPhail: How about the minister's staff, either as Minister of State for Deregulation or as Minister of Transportation? Did his office in either of those portfolios meet with anyone associated with the B.C. Rail deal? I'm talking about lobbyists as well as the bidders themselves.

Hon. K. Falcon: I guess my answer would have to be that in the Ministry of Transportation it's always a challenge not to meet with people in the transportation industry, for obvious reasons. It's difficult for me to know whether the member was referring to the staff in my ministry prior to me becoming minister — where, obviously, I'm on less sound footing — because frankly, I have no idea.

When I was Minister of State for Deregulation…. The question is: did my staff ever meet with anyone? The truthful answer is that I don't know. I don't know, especially with respect to B.C. Rail. I don't believe so. Certainly, there's nothing in my recollection that would suggest they did. Those lobbyists often lobby for different clients and different issues too, so it is possible that perhaps one of those lobbyists may have met with one of my staff on an unrelated issue. I don't have any recollection myself of meeting with…. Well, I've already indicated that to you. The answer is that I don't believe my staff ever did, but I actually don't know for sure.

J. MacPhail: Could the minister find out for me, please, and give me that information.

No, I wasn't asking about the previous ministerial staff in the Ministry of Transportation, but I am now. Did Mr. Bob Virk meet with anyone ever associated with the B.C. Rail deal in terms of being a bidder or a lobbyist for a bidder?

Hon. K. Falcon: I have no idea. I will try and check to the extent that I'm able to check, but I have no idea.

J. MacPhail: Well, we do have this little matter of the Lobbyists Registration Act. The lobbyists' registration lists very carefully who they've met with. I know that there's been a bit of fallout for the lobbyists since I've been raising these issues and that some of their clients are saying: "Hey, pal, you said you got us access. It turns out the government's denying that you had any access."

There's been a little bit of backlash on the lobbyists' community about how much they're allowed to charge. They're blaming me for that. They're blaming me for the fact that I've actually put together that they're charging big bucks to lobby ministers, and then the ministers are saying: "Oh, not us. We never met with that group. Our staff didn't meet with us." I feel badly about the downturn in the lobbyist industry here in British Columbia. I'm sure they'll recover, though.

The minister should know very well that ministerial aides have to register who they meet with now, or have to acknowledge and keep a record of who they meet with. That's what the Lobbyists Registration Act is supposed to do, so the minister should have no trouble finding out whether Bob Virk met with any lobby-

March 4 was the day the minister already has acknowledged that he admitted he was wrong and withdrew his comment about why Bob Virk was suspended with pay and why Dave Basi was fired. We've canvassed that.

On March 5, 2004, the Minister of Transportation states that the rail bid for Roberts Bank is still going ahead, regardless of the fact that Omnitrax is bidding for Roberts Bank's spur line. It's a 37-kilometre rail link. I didn't say exactly what it was. It's a 37-kilometre rail link out to Roberts Bank, which is a very lucrative sale.

The Minister of Transportation says that it's going ahead when he knows full well there's a possibility that it may not. He states that the government has appointed an independent "fairness auditor" to oversee the Roberts Bank deal. It turns out that it's the same group, Charles River Associates, who failed to find any wrongdoing in the B.C. Rail deal. They were paid $300,000 and found nothing wrong, even though today we know that one of the leaks they uncovered was commercially sensitive information that should only have gone out after the final bidder had been selected. It turns out that during the bidding process, it went to only one of the bidders, the successful bidder in the end. So that's March 5. The minister is still saying: "Well, the Roberts Bank deal is going ahead."

On March 8, 2004, Chris Trumpy visits the minister for what I think is a third time.

On March 10 the Transportation minister admits that leaks of "significant confidential information may have compromised the government's negotiating and financial position." The Minister of Transportation calls off the Roberts Bank rail deal. Taxpayers are on the hook for about $900,000. I bet you that figure is going to break $1 million. You can pretty much guarantee it. Taxpayers are on the hook for at least $900,000 for that cancelled process.

Can the minister explain why it took from March 1 to March 10 for him to cancel the Roberts Bank deal?

Hon. K. Falcon: I think it would be helpful to walk the member through the process. I think it might enlighten her as to how the process unfolded.

On March 1, as the member knows, Mr. Trumpy was contacted by the RCMP, who presented him with documentation and information that caused him to believe that one or more of the advisers to the proponents may have come into possession — I underscore may — of the information they shouldn't have had in their possession. On March 4 I had a meeting with Mr. Trumpy, who advised me that there could be a problem associated with that port subdivision process.

My instructions to Mr. Trumpy at that time in that meeting were, first, to try and go back and determine the extent and severity of the problem with the RCMP; second, to meet with the evaluation committee to review the options available for us as a government and me as a minister regarding the port subdivision evaluation process; third, to confirm if the province's financial and negotiating position had been compromised; and fourth, to report back to me — and this is something that I felt was particularly important — an appropriate course of action, putting the public interest at the very top of the decision pyramid. What I emphasized to Mr. Trumpy is to not worry about the politics — that would be something I would deal with — but to make sure that the public interest was at the very top.

By the way, I missed the March 2 meeting that we already discussed. I apologize for that.

Mr. Trumpy went back and of course held his meetings. I should let the member know that this was a challenge, I think, for Mr. Trumpy, because he had to meet on many occasions with the RCMP. The challenge was trying to determine what information, presumably, they could make Mr. Trumpy aware of and what information Mr. Trumpy could subsequently make us aware of without jeopardizing the investigation.

On March 8 I met with Mr. Trumpy again, and on behalf of the evaluation committee, he confirmed that the committee was of the opinion that one or more of the advisers to the proponents involved in the port subdivision process had come into possession of confidential information that they should not have been in possession of.

On March 10 the evaluation committee subsequently confirmed that in writing in a letter to myself which recommended termination of the port subdivision process. I immediately went to the press theatre that same day to confirm exactly that.

J. MacPhail: Given that the minister offered to handle the politics of all of this, why, after his meeting on March 4 — which is the second meeting he had with Mr. Trumpy, where I assume Mr. Trumpy outlined all of the information he had from the RCMP about the problem…? Why, politically, on March 5 did this minister say quite boldly that the deal was still going ahead? What was in the political mind of this minister to declare that, knowing the information he'd received on March 4?

Hon. K. Falcon: What was in the mind of this minister was the recognition that I had only very limited information and that what I needed to do and what I was waiting for from Mr. Trumpy was to have him have discussions with the RCMP, as I indicated, to determine what the extent and the severity of the information was and whether it jeopardized and undermined the process — basic facts, obviously, associated with the process.

The member, I think, also recognizes that it's incumbent upon me — in fact, I think it's my highest priority — to ensure that I am also extremely careful in ensuring that I don't just blurt out whatever information comes into my head. The reason is that there's an ongoing criminal investigation of, presumably, some seriousness. My responsibility as minister is to be as cautious, careful and responsible as I possibly can be, and that's exactly what I carried out.

J. MacPhail: Well, thanks for the self-analysis. Others may have a different view — that the minister deliberately withheld information he had on March 4 when he said….

The Chair: Member, please, to the question and without having to be unparliamentary about the allegations. I would prefer some direct questioning.

J. MacPhail: Thank you, Mr. Chair, for the guidance. We now know the minister had information that didn't guide his comments in the media on March 5.

Has the minister ever heard of "no comment"? No, he didn't say, "No comment," when asked whether the Roberts Bank deal was going ahead. He said, "The rail bid for Roberts Bank is still going ahead," regardless of the fact that Omnitrax was bidding for the Roberts Bank spur line. He didn't say: "I'll get back to you. Let me look into that. I'll give you an update tomorrow." No siree. He had information from Chris Trumpy on March 4 and then went out to the media and hence the public and said: "It's going ahead."

Hon. K. Falcon: One meeting and several phone conversations with the RCMP during the period from March 4 to March 8.

Hon. K. Falcon: We don't have that date, but we'll get that date for the member. I do note that there was a weekend, too, of course, that flowed between the 4th and the 8th, but we'll get that date for the member and get back to her.

J. MacPhail: I know Mr. Trumpy, and weekends make no difference to him. I know that.

Well, I would very much like to know when the RCMP…. Because, Mr. Chair, this smacks of cover-up. Yes, absolutely, it smacks of cover-up that the minister was not….

Hon. K. Falcon: On the grounds that the member is using language that is totally unparliamentary and she's referring to cover-ups, and I take total exception to that.

The Chair: Members, as I indicated earlier, the line of questioning is to deal with the Ministry of Transportation estimates. There are some issues surrounding B.C. Rail. As it has been pointed out, answers will be limited due to issues of the courts, and I certainly have a great deal of respect for that.

I would encourage the members in their line of questioning to try and be forward with their questioning but in a polite and respectful manner, to be respected from both sides.

J. MacPhail: The minister sure had information that he didn't reveal about the Roberts Bank deal when asked specific questions on March 5. He sure didn't reveal information. In fact, he didn't say: "No comment." He actually went in the opposite direction, giving assurances around the sale proceeding. He went in the opposite direction of the information that he had. So let's just say that. He took us down another path than the one he was being informed of by Mr. Trumpy, who was being informed by the RCMP. I'd be very happy to know when the meeting with Mr. Trumpy and the RCMP occurred post–March 4.

What reassurances did the minister receive through Mr. Trumpy that the leaking of significant confidential information did not compromise the $1 billion sale of the B.C. Rail main line?

Hon. K. Falcon: The member knows that on March 10 I read out a statement in the press theatre. That was a statement that had been reviewed by the RCMP, and the RCMP were satisfied that the statement was something we could release. The member will recall that within the statement there was a sentence that said — and I'm paraphrasing, although I'll read it directly if the member wants — we have no information to suggest that the successful proponent in the freight-rail partnership — CN, obviously — has come into possession of any information that would undermine the outcome of that partnership.

Hon. K. Falcon: Yes. In partnership with CP and the Vancouver Port Authority they together had put forward a bid.

J. MacPhail: Can we assume from that, then, that it was one of the other bidders that received the leaked information?

Hon. K. Falcon: I am not going to engage in any speculation over that at all. I would suggest that the member not continue that line of questioning, because I won't even be standing to answer.

J. MacPhail: Look, I'm just trying to put together the information that this minister is giving. The minister is holding up his little medals of honour that he got in what he was allowed to say from the RCMP. The RCMP said that they have no information that the CN sale would be compromised. But do they say that CN, in partnership with others on the bid of the sale of the

spur line, was let off the hook too? Do they clear them of that? Or do they just clear it…?

J. MacPhail: The minister says he's not going to speculate. I'm asking what it means when he says the RCMP says they have no information that would taint the sale to CN of the main line. What does that mean? Because CN is involved in the sale of the B.C. Rail spur line to Roberts Bank too.

Hon. K. Falcon: I'll remind the member that these are two totally separate deals and two totally separate processes. I'll also remind the member that I will not be engaging in any speculation as to who has what or who doesn't have what.

J. MacPhail: Is the investigation ongoing? Is that why the minister is precluded from discussing this?

J. MacPhail: When was the last time the RCMP visited the government about the leaked information?

Hon. K. Falcon: It would have been, as we had discussed earlier in our questioning, the week of the announcement. We're getting that date for you. Whenever that date is that we get for you is the last day we had a conversation.

Hon. K. Falcon: It was ongoing at the time I read my statement in the press theatre. I'm making the assumption that it's ongoing, but I shouldn't make that assumption. I have no conclusive evidence that it's ongoing or not ongoing at this point.

J. MacPhail: Does the minister know — or his staff, or his officials — what sort of significant confidential information was leaked? I'm not asking what it is. Do his officials know?

Hon. K. Falcon: Yes, because that's what led us — the evaluation committee — to the recommendation.

J. MacPhail: What changes has the government made since receiving this information?

J. MacPhail: Well, we have a raid on the Legislature. We have the RCMP telling Mr. Trumpy that there's enough information that Mr. Trumpy then advises the minister the sale should be cancelled. We have someone inside government leaking information to an adviser of one of the bidders. Based on receiving that information, what changes has the government made since that time? Any?

Hon. K. Falcon: The member is engaged in total speculation about what went on with regard to the decision to terminate the port subdivision process. She knows she's engaging in speculation. I am not going to engage in that speculation with her, but the member should be comforted by this: at the time we were able to ascertain the information and got the factual information that suggested there was a problem associated with the port subdivision process, we terminated the process. That is the right thing to do. It would be the right thing to do in the future, and it was the right thing to do then. I can't add any more.

J. MacPhail: I'm not speculating on anything. I'm putting back the information that this minister released and asking him questions about it. The minister's announcement on March 10 has the minister admitting that leaks of "significant confidential information may have compromised the government's negotiating and financial position." All I'm asking the minister is: what changes has his government made since that time? None?

Hon. K. Falcon: There are people out in the public arena that are making assumptions and trying to engage in speculation by connecting dots that may or may not be related. As I said to the member, I won't be engaging in that. There is an investigation ongoing, and I'm satisfied to wait until the conclusion of that before I make any further comments.

J. MacPhail: I'm trying to give the government an opportunity to reassure the business community and reassure the public. A multi-tens-of-millions-of-dollars sale of a publicly owned asset had to be cancelled. It involves the RCMP. It involves, to quote the minister, "leaks of significant confidential information." I'm just asking the government what changes they've made since that time. If the minister says none, shame on them.

Or do we assume that the people who had been responsible for it have already been fired? Is that what we can assume? If the government is still paying Bob Virk for a paid vacation and has fired Dave Basi and if the government hasn't made any changes at all since the March 10 announcement, then we can only assume it was Dave Basi leaking the information.

J. MacPhail: Mr. Chair, the minister says it's unbelievable. He's the one leading to the speculation. What changes has the government made — none, absolutely none since March 10? Is that the answer to the question?

You don't have to reveal confidential information. The minister had a complete meltdown on a sale that had to be cancelled because of a police investigation,

and the minister's saying: "We didn't make any changes subsequent to that." How's that for building business confidence in British Columbia?

Hon. K. Falcon: I would happily put our record of building business confidence up against that member's record of building business confidence any day of the week. All of the indicators show that business confidence…. In fact, as I recall, the small business association did a survey of their members and found that the highest level of confidence — I would encourage the member to read this — from the small business sector was right here in British Columbia.

I will remind the member that I am not going to engage in speculation, though she continues to engage in speculation, which I think is irresponsible. I won't, and if the member wishes to continue to do so, that's up to that member.

The Chair: Members, noting the time, at this time we will recess this committee until 6:35, at which time we will reconvene. We stand recessed.

J. MacPhail: Mr. Chair, I'd like to ask the minister for the information that CIBC World Markets leaked to CN. I'd like to know what that information was, and I'd like to have a copy of it.

Hon. K. Falcon: The information the member is requesting relates to interline agreements. That includes information on contracts between B.C. Rail…. That's information that is proprietary and that, no, we cannot release to the member. It's very sensitive proprietary information.

J. MacPhail: Can the minister at least explain what an interline agreement is?

Hon. K. Falcon: An interline agreement is essentially an agreement relating to any product that is…. You'll appreciate, member, that I'm not trying to sound like an expert in the rail business, but I'm just getting a quick education. Any goods that flow outside of the province — basically, outside of B.C. Rail's track — require an agreement with another railway to ensure that, for example, lumber gets from, say, Prince George to Georgia. To do that, there has to be an interline agreement with another railway.

The reason why it's sensitive is it contains not just shipper-tariff information with respect to that other railway but also customer information regarding the goods being shipped, etc. So there's proprietary information in relation to the tariff rates charged by the shippers that B.C. Rail is making those agreements with and also customer information that's sensitive.

J. MacPhail: The 7 percent price reduction that's part of the CN deal with the government applies to what kinds of agreements?

J. MacPhail: So CN, as part of their deal, negotiates a 7 percent price reduction on interline agreements, and this kind of information that they had over and above everyone else didn't help their bid?

Hon. K. Falcon: All of the bidders were provided with the aggregate information related to that particular subject. CN's bid was predicated and based upon the aggregate information that was provided to all the bidders.

J. MacPhail: How does the minister know that, and what proof is there of that?

Hon. K. Falcon: The second-round bids had already been received by all of the proponents. That was before the data leak that the member refers to actually took place. Their bids were already before the evaluation committee before that inadvertent leak that the member talks about took place.

J. MacPhail: Is the minister saying that the price reduction of 7 percent had already been negotiated and bid upon across the board prior to this leak occurring?

Hon. K. Falcon: In their second-round bid, that particular proponent had offered 5 percent — CN.

J. MacPhail: Mr. Chair, I'm just trying to get the time line here, so maybe the minister could use some dates about first and second bids, and maybe he could be very specific about when the leak occurred. Prior to supper he didn't know when the leak occurred.

Hon. K. Falcon: The receipt of the first-round proposals was June 30 of 2003. The receipt of the second-round proposals was September 15, 2003. We'll get the exact date for you, member. I don't have it exactly before me, but my staff believes it was likely mid- to late October when there was the inadvertent release of the information to CN from CIBC World Markets. But as I state, that was well past the receipt of the second-round proposals.

J. MacPhail: What's the difference between first round and second round? What happened between those two? Were there different bidders? What happened to incur a second round of proposals? Was there a new RFP or a…?

Hon. K. Falcon: The proponents are provided initially with some confidential information memoranda

and some supplementary information questions and answers, etc., prior to then going into their round 1 proposals. Subsequent to the round 1 proposals going into round 2, they're then provided additional information. That additional information is management presentations, access to the data room, site visits, line inspections, information meetings regarding transaction agreements, etc. — essentially, access to the data room and site visits.

J. MacPhail: The final bid, I was told by the former Minister of Transportation in the Legislature during the debate on the legislation, wasn't decided until within a couple of days before the announcement of the Premier. Indeed, the final bid was clearly…. Well, when were the final bid negotiations completed? What was the exact day?

Hon. K. Falcon: On the Wednesday subsequent to the announcement of the partnership, cabinet provided direction to the evaluation committee. There was no deal yet, but cabinet provided direction to the evaluation committee to go forward, subject to confirming, upon direction of cabinet, some outstanding issues. The evaluation went back to the table. They concluded an agreement on the Monday, and the investment partnership between B.C. Rail and CN was announced the following day.

J. MacPhail: Of course, everyone was asking questions and alleging — I certainly was, with the government, in question period — that CN had the inside track and they were going to be the successful bidder. The government said: "No, no, no. Nothing's been completed. Negotiations are ongoing." The members of the steering committee…. The member for Prince George North, for instance, was on air saying: "No, nothing has been decided yet. Negotiations continue."

We know that the government hadn't made a final decision, by its own admission, at least a week before the announcement. The announcement was on a Monday, as I recall. November 25 was a Tuesday? Okay, Tuesday. It was announced on a Tuesday. At least, they hadn't made a decision the week before. They were still saying: "Negotiations continue."

Here we have CN with private and confidential information, very commercially sensitive information, about interline agreements. They had already made one proposal about a price reduction on those interline agreements. Then all of a sudden they get this new information that shows exactly what those agreements cost, and lo and behold, they up their bid. The minister said they only offered a 5 percent price reduction in the second round, and all of a sudden, they're at 7 percent, and they've received confidential information about interline agreements in the interim — confidential information that gave them, actually, the details about the contracts CP had with shippers. CP never got their confidential information about what CN's interline agreements were.

All of a sudden CN changed the rate of price reduction on interline agreements that they could bid. Interesting. Just interesting — but, oh, they didn't use any of that information. They took all of that information…. They did have it for a minimum of 72 hours, the minister has already admitted. Nobody else had that information. Ultimately, their bid was different on the interline agreement price reduction than it was on the second round.

Charles River says this is all just fine. Isn't that interesting? Charles River, the fairness adviser, says that's all just fine. Gosh, I sure hope there's somebody else that has a better definition of fairness than what Charles River had when they looked at all of that.

Now, did CP Rail just accept that? No. They alleged that the government made a clear breach of fairness in the bidding process for B.C. Rail. CP said that B.C. Rail shipping customers were aware of the details of all the bids even though they were supposed to be confidential.

It's interesting. I just find it unbelievable that that kind of confidential information was leaked. It gave a distinct advantage to the company who had the information and was bidding, and lo and behold, that company changed its bid on interline shipment price reductions, and they were the successful bidder. Charles River Associates says that's all just fine. Well, it doesn't meet the nod test of the public, I'm sure, and it sure as heck doesn't meet the nod test of people who may be interested in investing in this province.

Maybe the minister could just refresh my memory. On what basis does the minister suggest, again, that the sharing of confidential information has no bearing on the main line B.C. Rail sale? Is it the RCMP's word on that, or is it Charles River's word on that?

Hon. K. Falcon: I know the member is absolutely bent on determining that there is something here that there isn't. I would remind the member that, really, this is just an issue of timing. They were going to be provided with that information anyhow. As the member knows full well, when CIBC World Markets inadvertently faxed that information to them, they took steps immediately to deal with that and received undertakings from CN's legal counsel that the information had been destroyed.

I would point the member to the Charles River quote, and I would also say this. I don't, frankly…. I take strong issue with the characterization of Charles River from the member opposite. Charles River is a firm with an impeccable international reputation and credentials in terms of acting as a fairness adviser towards transactions of this type. I will quote in part from Charles River Associates on page 28 of the report:

J. MacPhail: That's an endorsement? Even Charles River doesn't say that it was a fair process. They note it. They reached no conclusion about it — just the same way that they didn't reveal the leak in their interim report. That's what I'm saying. Save me from Charles River being a fairness adviser.

The minister says CN would have got this information anyway. If they were the losing bidder, would they have got it anyway?

J. MacPhail: Again, the minister tries to sort of skate around things by saying: "Oh well, CN would have got it anyway." No. If CN weren't the successful bidder, they never would have got that information. All the more reason why the leak is so important: because CN got this information during the bidding process, at a time when no one but the successful bidder was supposed to get it.

They got information about interline agreements, which is confidential information about the prices charged shippers to ship their goods. CN gets this confidential information and then changes its bid — changes its bid on interline agreement price reductions. That's what they did. And this minister says: "There's nothing wrong with that." Charles River Associates says: "Oh, we make no judgment on that."

Has the minister received any information…? Did the minister submit all of this information about the leak, the timing of the leak, the change in negotiations with CN as a result of leak…? After this leak, I should say. I'm not saying as a result of the leak but after this leak, because CN changed its bid after they got this information.

Hon. K. Falcon: I'll remind the member in her flourish there that one of the things that I think she needs to understand and understand clearly is that CN already had their proposal into government.

Hon. K. Falcon: The member correctly points out, as I explained to her, that that included a 5 percent tariff reduction for interline shippers.

One of the things that I have said publicly and I'll say to the member here again is that part of the toing and froing of negotiations as we get down to the final negotiated deal and investment partnership between CN and B.C. Rail was in movement of that 5 percent to 7 percent — something that we as a government felt was very important.

Hon. K. Falcon: That would have taken place subsequent to the second round and prior to the final agreement.

J. MacPhail: Yes. Did it take place after CN received the confidential information about the interline agreement?

Hon. K. Falcon: I've already indicated to the member that I was going to try and get back to the member with the exact date of when that information was inadvertently faxed out from CIBC World Markets. I will endeavour to get that information back to the member. That would obviously be helpful in answering this question. One thing I can assure the member of is that, you know, the toing and froing between a deal like this continues right up until the conclusion.

J. MacPhail: Oh well, I'm quite sure the toing and froing continues right up to the negotiation, and somewhere along the line CN changed its price reduction from 5 percent to 7 percent. In the meantime it had the total information about interline agreements that deals very specifically with the price of those interline agreements. No one else had it — just CN.

In an interview that this minister did in March of this year it says that the…. A letter written by McLernon, who as I understand it, is…. B.C. Rail board chair, John McLernon wrote: "Although a release of confidential customer tariff information to CN did occur at the beginning of October 2003…."

Well, how come Mr. McLernon knows and this minister can't give me an answer about a specific date?

Hon. K. Falcon: Because we're actually talking about the same time frame. I told the member I haven't got the exact dates. She's indicating it's the beginning of October.

One thing I do want to emphasize for the member to perhaps understand is that the fact that we were able to get CN from a 5 percent tariff reduction for interline shippers to 7 percent is actually in our benefit. That's something that benefits the government side of the equation, so the member should perhaps keep that in mind while she's thinking that there is something inappropriate with that. That was a benefit that we negotiated, and I'm proud we did.

J. MacPhail: Oh my God. My point is that perhaps CN had inside information about what it would cost them to move from 5 percent to 7 percent, and maybe it was in their interest and their benefit to have that inside information so they knew they could make the commitment without that great a cost. Did the minister ever think of that as a negotiating advantage? My God. Thank God the minister actually wasn't doing the negotiations.

There's a discrepancy here. The minister just said to me he thinks it was mid- to late October — he just said that since our supper break — that the leak occurred,

Doesn't anybody think this is important? Clearly not. A bidder getting the most highly sensitive information during the bidding process — information that actually would have been helpful as they move to commit from a 5 percent to a 7 percent price reduction…. Who knows whether there's a link or not, but it certainly would have helped them to make that commitment, knowing what it meant to their books. No one else has that information. This minister won't even come clean about exactly when that leak happened. Mr. McLernon sure had it in his mind. On top of this, Charles River Associates says there's nothing wrong with it.

Let me also quote what Mr. McLernon said in his letter to CP: "Although a release of confidential customer tariff information to CN did occur at the beginning of October 2003, immediate steps were proactively taken by CIBC World Markets and BLG" — that's the law firm Borden Ladner Gervais — "to have this information destroyed, with CN confirming in writing that no improper use was made of that information." CN said they didn't use that information, and the fairness adviser goes: "Oh, well, that's good enough for us."

Now, immediate steps…. The minister just said 72 hours. I can memorize tariff information within 72 hours. I can actually absorb in my mind in 72 hours what interline agreements are. This minister and the fairness adviser say, "Oh, no problem whatsoever," and the minister won't tell us when CN changed its offer of a price reduction from 5 percent to 7 percent.

Well, this gives new meaning to murky. Muddy. I'd even use the concept of a different brown substance, but I'm going to stick with muddy. But it all stinks. Let me be clear.

My question actually was: what reassurance, again, is the minister relying on? Just to be clear, whose reassurance is he relying on that the RCMP investigation around leaks of information does not affect the main rail line sale of B.C. Rail?

Hon. K. Falcon: That was a fairly lengthy dissertation, so I can't possibly even remember all the things the member was going on about. One thing I do know is she was referring to what she alleges is a disparity between the date which I suggested to her we would get back to her on — we thought it was mid- to late October — and her subsequent reading of a letter from John McLernon suggesting it was early October. Well, there's nothing new there, certainly nothing conspiratorial except in that member's mind, in which I get that everything's a conspiracy. Anyhow, I confirm to the member again that I will get her that information.

With respect to her latter information, she was suggesting with respect to the RCMP and our statement regarding the fact that the spur line deal information was not associated with the main line…. What I would do is just quote directly from the statement that I read in the press theatre. As I confirmed today and many times earlier, that was the statement that had been reviewed and approved by the RCMP subsequent to me publicly reading the statement out. The sentence that's germane to the question the member raises is this: "We have no information to suggest that the successful proponent, CN, has come into possession of any information that would undermine the outcome of the B.C. Rail–CN partnership."

J. MacPhail: So the RCMP is saying they have no information. Well, is the minister assured that the RCMP has reviewed all relevant information to this search on the Legislature? Is the minister assured of that?

Hon. K. Falcon: To the member: I will be making no comment on what the RCMP…. I have no idea what the RCMP review.

J. MacPhail: Exactly, Mr. Chair. This minister has no idea whether the RCMP has completed its investigation. As of March 10 the RCMP issued a statement saying they have no information that would link the two. That's as of March 10. The minister has no idea whether they've completed their investigation, whether they've even examined all of the information in the various search warrants. More about that, I'm sure, as the days unfold.

I find it unbelievable, in a deal that is so controversial, involving a billion dollars — to CN anyway…. Taxpayers are going to get about $750 million max. Yes, absolutely. The minister shakes his head. That's all the taxpayer is getting. The other is a $255 million tax credit that goes to CN. It doesn't buy one operation, doesn't fund one school seat, doesn't pay one social assistance cheque, but CN gets a $255 million tax write-down.

The minister makes a big deal. He says the fact that he's saying it was mid- to late October and he's going to get me the date…. I read here that Mr. McLernon said in the letter that the information leak occurred at the beginning of October. It means nothing to the minister. "What's a couple of weeks amongst negotiations amongst insiders?" Yeah. What's that? Well, I'm sure it'll be very important information to a lot of people.

Now, let's just carry on with the time line here as we complete it. We'll then be moving our questions to the actual contract itself, the transaction agreement versus what was submitted to the competition bureau and some perhaps discrepancies between what the previous minister said and what this minister has said.

Let's just complete the time line of this deal. April 1, 2004, a three-page summary of a federal drug investigation that led up to the police raid on the Legislature is released. The summary does not explain why the raids took place. It does say that the investigation does not involve any elected officials. I love this one too. It said that there was no grow op at the Legislature — whew — or no cocaine manufacturing.

Wow. I tell you, I felt relieved. I felt relieved that there was actually no grow op at the Legislature. What

a high standard. What a high moral authority. That must have given comfort to the Liberals. The Liberals were flogging it like: "Hey, man. There's no drug activity actually taking place at the Legislature, and no elected official is involved. Phew. We're kind of off the hook." I remember the government feeling relieved with that information.

The summary does describe some allegations of cocaine and marijuana trafficking by individuals in B.C., between B.C. and Ontario, but that's as far as we know. Stay tuned.

I also might add that the summaries of all of the warrants have yet to be released. That's why the statement as of March 10, where the RCMP say they have no information linking any of this to the main line rail deal, is only partial information. It isn't even conclusive information, because the summary of all the warrants has still not been released.

Just to complete, because I want to be fair, the Solicitor General then states to the media: "I'm not worried about it, because from our perspective, we have said all along we'd like to see as much information as possible released." Then April 15, 2004 — this is very interesting as well — Victoria lobbyist Erik Bornman is informed by the police that he is no longer under police investigation.

We still don't know, as the public, who leaked the confidential information and to whom it was leaked. Clearly, the government hasn't taken a scintilla of action as a result of their March 10 announcement — not a scintilla of action have they taken. Nobody's been fired. Nobody's been put on paid vacation leave. There has been no report-out about changed business practices. I don't even know whether the unsuccessful bidders were informed of who got what. That's where we are at in this great chapter in the history of business in British Columbia.

The minister has said: "Oh, look; everything's fine. It's going to the competition bureau, and by the way, we can't give you one iota of information about the deal. We're just going to say that anything that's leaked about the deal is wrong, and the people who are talking about it don't understand business. We're the only ones that understand business; take our word for it. The competition bureau is going to look after all of this."

Hon. K. Falcon: The competition bureau will get a copy of the lease agreement, the transaction agreement and any independent reports that were promulgated in addition to any reports or information from individual shippers that they're able to gather.

The competition bureau is brought into any transaction — what are called notifiable transactions — where there is at least a $400 million threshold that has been breached in a transaction. That automatically engages the competition bureau. The competition bureau is going to be looking at issues associated with a transaction that is a notifiable transaction to ensure that it doesn't in any way hinder a free and open competition.

J. MacPhail: So the lease agreement is different from the transaction agreement.

Hon. K. Falcon: There is the lease agreement, the transaction agreement and a whole bunch of schedules associated with those agreements.

J. MacPhail: My question was: is the lease agreement different than the transaction agreement? I take it from that that the minister's answer is yes.

What are the schedules attached to, which agreement — the lease agreement or the transaction agreement?

J. MacPhail: Okay. What is it titled? Is it titled the "lease agreement" or the "revitalization agreement"? Part of the leak that the minister pooh-poohs is titled the "revitalization agreement." What is it?

J. MacPhail: I guess the minister didn't want to say that, knowing that was the title of the document that had been leaked.

What is in the transaction agreement, separate and apart from the lease agreement?

Hon. K. Falcon: The transaction agreement is the transfer of the business operations to CN — the rolling stock, the railway cars, the customer lists, etc. The revitalization agreement is the lease of the right-of-way that is provincially owned.

J. MacPhail: We know from debate around committee stage of Bill 89, British Columbia Railway (Revitalization) Amendment Act, 2003, that CN is acquiring all of the shares of B.C. Rail Ltd. and the interest or units in the B.C. Rail Partnership. When the deal is done, does CN own all of B.C. Rail Ltd.?

J. MacPhail: Okay, so B.C. Rail Ltd. is sold to CN. That's a sale. God, I don't know why it's so hard for this government to admit it. It's not a long-term lease; it's not a partnership. It's a sale. We know that the transaction agreement deals with that sale. The lease of the

right-of-way is a lease agreement, the revitalization agreement. That's a separate agreement, the minister has just said. Phew. CN is buying B.C. Rail Ltd., which is everything except the right-of-way.

CN has all of the rolling stock as a result of the sale of B.C. Rail Ltd. It's interesting that the rolling stock is all that the company is about other than the right-of-way. CN owns that. We have to buy it back if we want to break the lease. Gee, that's a great deal.

How long is the transaction agreement that the competition bureau is examining? Oh, and by the way, when the minister said these agreements will be sent to the competition bureau, I assumed they've already gone. When did they go?

Hon. K. Falcon: To the member's first point, confirmation that the agreement is actually all of the things that the member mentions. It's the transaction agreement — which, as we've pointed out many times, is the transfer of authority to operate the rolling stock — and the revitalization agreement, which is, of course, the lease arrangement where the public, through the Crown corporation, maintains public ownership of the railbed and rights-of-way. With respect to when the information was provided, it was within ten days of the announcement of the partnership agreement.

J. MacPhail: Yeah, I know the minister hates to say: "We sold the rolling stock to CN." They hate saying that. "It's a partnership agreement. Under the leadership of the Premier, it's a partnership agreement." No, it isn't. It's a sale. It's a 990-year lease, where they get the right-of-way to run the rolling stock. If British Columbians actually want to end the lease, they have to buy the rolling stock back.

Now, I want to actually go over some of the things the former Minister of Transportation said in the debate so that we can make sure that everybody's got their story straight on this. The 600 new cars under the deal — is that in the transaction agreement?

J. MacPhail: Okay. That means CN's got those. They own that. They're in charge.

Hon. K. Falcon: Sorry, I shouldn't try and explain things across to you without putting it on record.

No, that is referring to CN's commitment to purchase on their own, without taxpayer dollars, of course — with their dollars — 600 new centre-beam cars.

J. MacPhail: Let's be clear. Taxpayer dollars haven't been involved in B.C. Rail either. Shippers' dollars are involved. It's non–taxpayer-supported debt. I never paid a thing to B.C. Rail except when I took the Starlight Train up to Whistler or however far it went, and I paid for a ticket for that. As a taxpayer, I haven't contributed anything else.

What does it say in the transaction agreement about the 600 new cars? Where will they be purchased from and over what period of time?

Hon. K. Falcon: Well, as I've indicated to the member before, upon the conclusion of the competition bureau review, the transaction agreement will be released, and all that information will be available for the member. With respect to the member's comments that she hasn't paid anything, actually, taxpayers have written down $836 million on B.C. Rail over the last 15 years.

J. MacPhail: Yeah. The vast majority of that for opening Tumbler Ridge, of which this government now has many members who raised their hands and said: "Let's open up Tumbler Ridge." It's his own government, renamed, that brought that debt upon taxpayers. Over $600 million was a write-down from Tumbler Ridge.

J. MacPhail: Oh, he's smiling, and the Minister of Provincial Revenue says no. I was actually part of the government when we had to write that down. It was the previous Social Credit government of which there are — what? — eight, nine, ten members who are part of this government now, who opened up the rail line to Tumbler Ridge, to Quintette Coal. It turned out to be not such a great idea — a $600 million not-great idea. His own government, renamed, brought that debt onto the public. That's absolutely true.

Now, why do we have wait to find out the details of purchasing 600 new cars? What's so secret about that?

Hon. K. Falcon: I've answered this question many, many times before. As we've said right from the very beginning, the moment the competition bureau has concluded its review of the transaction, we will be releasing all information that is not commercially sensitive and is in compliance with the Freedom of Information and Protection of Privacy Act. That includes any of the details that member is interested in with regard to the 600 centre-beam cars.

J. MacPhail: Could the minister predict whether the 600 new-car purchase is commercially sensitive information?

Hon. K. Falcon: Well, that was announced as part of the agreement, as that member knows. It is con-

tained in the transaction agreement, which we will review. I can't foresee any scenario in which it would violate any commercial sensitivities.

One of the reasons that it's such an important part of the transaction, as the member probably knows, is that shippers, even very recently, have been complaining that B.C. Rail has not got adequate capacity for them to ship just the lumber they need to ship right now, particularly under the softwood agreement challenge we're facing with the United States. They're doing such huge volumes of shipping that they're complaining quite vociferously about the fact that B.C. Rail hasn't got the capacity to handle that. This is clearly a very big plus for the shipper community to have those 600 new centre-beam cars.

When does CN have to commit to those cars? Where are they going to get the cars from?

It's not just a B.C. Rail problem; it's a North America–wide problem of lack of railcars. That's why I'm asking my question: 600 new cars when and from whom?

J. MacPhail: In order to see whether this actually is a good deal or not for the customers.

Tell me: who amongst the customers knows this information about…? Who outside of the cabinet knows about the timeliness of the delivery of the 600 new cars? Do the members of the steering committee know that?

Hon. K. Falcon: The commitment is that CN will be purchasing 600 new cars. I underscore new, so that it emphasizes the fact that this isn't a reallocation of existing railcars onto the line. As to where they purchase them and the process they go through, I'm not aware of that. I'm not a railway operator, but presumably they are fully capable of knowing how that operates.

J. MacPhail: Well, that wasn't what my question was about. Of course, the details of the commitment are extremely important because there's a North America–wide shortage of railcars — new railcars. I wasn't referring to a reallocation.

I'm just curious as to how they're going to deliver on this promise. But that's not what I'm asking. The minister has said: "It's very secret. We've got to wait for the competition bureau to bless the agreement." I'm not quite sure what the competition bureau has to say over any of this stuff. I'm curious as to when the commitment has to be delivered and how they're going to deliver on the commitment, but the minister has said that's all very sensitive information.

I asked whether the terms of delivery of the 600 new cars were known by the steering committee of this deal.

Hon. K. Falcon: With respect to the member's question regarding the steering committee, as I mentioned, the steering committee was there to ensure that at a high level this subsequent partnership agreement between B.C. Rail and CN was consistent with the original objectives that were outlined, which were government objectives in terms of what we hoped to achieve, consistent with what we heard from folks up north. They would have been aware of the fact that there was a commitment to purchase 600 new cars, which is something, again, I'm very excited about for the shippers and for the communities of the north.

J. MacPhail: The steering committee knew about the 600-car purchase, and Bob Virk was part of that steering committee. Interesting.

Hon. K. Falcon: The open gateway is a schedule to the transaction agreement. I'm trying to simplify this in sort of layperson's language so that we can all not pretend that we're shippers and railway folks here. What it does is guarantee rates and access to interchange points in the Vancouver area so that shippers are essentially in the same position they were in with regards to having access to those interchange points on the railway network in the Vancouver area.

J. MacPhail: Is it affected by the cancellation of the sale of the spur line to Roberts Bank?

J. MacPhail: I assume that B.C. Rail remains part of the group that makes the commitment to the gateway proposal, based on the fact that that's an interchange point. The spur line to Roberts Bank is an interchange point.

Hon. K. Falcon: Nothing is going to change at all. They will still operate the spur line. As you know, B.C. Rail essentially just acted as a toll collector on that line. They didn't run any railcars of their own along that 37-kilometre track.

J. MacPhail: Well, it was a pretty substantial toll collector. The bids were around $60 million to $100 million to buy that spur line. It was pretty significant, and it's the only spur that goes to Roberts Bank, which is now a significant shipper itself, beyond just coal. The Delta port authority is a significant shipper.

What happens to…? Let me tell you what the former minister said on December 2, 2003: "The reopening of the Dawson Creek–Hythe line will be in the contract. The D'Arcy-Lillooet service and the Takla shuttle will be in the contract." She also then went on to say: "The commitment for the Tumbler Ridge lines to remain in place will be in the contract." Is that the case?

J. MacPhail: What happens after five years and CN wants to discontinue these lines — any or all of them?

Hon. K. Falcon: In the agreement there is a five-year prohibition against line discontinuance. After that five-year term, should CN wish to apply for discontinuance, they can do so through the federal ministry responsible under, I believe, the Canada Transportation Act for line discontinuance, which involves a fairly length process that can take up to a couple of years to discontinue a section of track.

J. MacPhail: Can the minister give us an example of where it took a couple of years to discontinue a track in modern times?

Hon. K. Falcon: Under the Canada Transportation Act there is a time frame set out. I don't have the time frame in front of me. What typically happens under the discontinuance process is that there's an opportunity for short-line rail operators to take up that portion of the track that is not to be operated by the main line operator. You might find it interesting to know that in Canada there are about 40 short-line and regional operators that operate on over 13,000 kilometres of track, representing some 30 percent of the entire system. It's actually a pretty vibrant portion of the entire track process.

That's the challenge in asking for a specific example, because it depends. There is a time frame laid out that can take up to a couple of years, but what often happens is that there's quite a bit of heightened interest by short-line operators to take over those tracks that become available under discontinuance.

J. MacPhail: Well, just give me an example of a short-line operator that would, for instance, be the equivalent of the D'Arcy-Lillooet service.

Hon. K. Falcon: The route that the member mentions is a passenger service that they can't discontinue, so that wouldn't be a good analogy.

J. MacPhail: So D'Arcy-Lillooet is guaranteed for the 990 years, and the Takla shuttle is guaranteed for 990 years in the transaction agreement?

Hon. K. Falcon: Yes, it is guaranteed for the term of the lease, which is the 60 years plus the 30-year renewal option on CN's option. Again, the member is confusing the renewal options with the lease term, and I would encourage her not to be confused by those two, because I know she finds it confusing.

J. MacPhail: We'll get to what the government says is a lease and an extension and what the obligations and the rights are and who gets to pay for what. We'll get to all of that.

All right, well, give me another…. The Dawson Creek–Hythe line then. Why doesn't the minister just be forthcoming and explain what short-line operator in existence in North America would possibly be taking up those lines now, just as an hypothesis, if CN abandons them, as they have the right to do, unilaterally, after five years?

Hon. K. Falcon: There would be companies like Omnitrax, RailAmerica — all those kinds of short-line operators that always take an interest whenever they see an opportunity that avails itself on a short-line track.

J. MacPhail: Yeah, I doubt they'll be bidding on a short-line in British Columbia, what with their experience with this government. Well, that's true. There could be a change in government. You're right — five years, one year.

Would the short-line operator have to bring in their own rolling stock? Would they have to arrange for interline agreements and interchange agreements on the open gateway?

Hon. K. Falcon: It totally depends, of course, on the situation, because the situations may vary. It could be a case where the short-line operator is going to provide all of the rolling stock. It may be a case, depending on the agreement they come to, that they may provide just the locomotives and lease some of the rolling stock freight cars from the prior operator of the line. It just totally depends on the individual circumstances. It would be impossible to guess.

J. MacPhail: But the minister is writing an agreement around this. That's what the transaction agreement is all about. It says that after five years CN can abandon those lines. Who negotiates the right-of-way for that? I mean, the minister is speculating that somehow, just "poof," some short-line operator will take this over. Who do they negotiate the right-of-way, right-of-railway, with?

Hon. K. Falcon: In layperson's language, I would describe it as essentially a sublease agreement. That's probably not an oversimplification, but it's the easiest way to explain it in layperson's language. It's essentially a sublease agreement between the operator — which in this case, presumably, should the deal proceed, would be with CN — and whatever short-line rail operator they're dealing with. The member will be able to look at all the information there in the transaction and the revitalization agreement, as I've indicated earlier, upon the conclusion of the review by the competition bureau.

J. MacPhail: We've been promised that for five months now. "Five months, just wait, and you'll get all

The previous minister speculated that the competition bureau would take three months. She predicted three months. She said by the end of March it would probably be all in place — maximum of six months. We're now on the verge, tomorrow, of entering the beginning of the sixth month. What's the minister's best guess now on how long the competition bureau is going to take?

Hon. K. Falcon: The minister's best guess is the minister doesn't engage in a lot of guessing. The minister has stated publicly and I'll state to the member that we don't have any control over the process. I don't, frankly, spend a lot of time engaging in guesses as to when it's done. When it's done, it'll be done. As soon as it's done, the member will be one of the first to know.

J. MacPhail: Sounds like Jean Chrétien: "If you have proof, you have proof. If you don't have proof, you don't have proof." That's exactly what he sounds like.

The previous minister said three to six months. She hoped for three months. It's on the record. She anticipated six months at the maximum. Has the minister actually called the competition bureau? Or has anybody in the government called the competition bureau? Or is it just completely out of their hands? Do we just sit back and say: "Gee, I hope that competition bureau is working today — hope they're not on vacation"?

Hon. K. Falcon: I'm trying to get over the comparison with Jean Chrétien. I'm certain the member didn't mean that in a negative spirit.

As I've said to the member and I've said to the public through the media many, many times, I don't control the process. I don't phone them to find out when the process ends or begins or is midway through or anything. They will complete the process when they're completed. I can't add anything of great value to the member on that.

J. MacPhail: So I guess the previous minister wasn't being quite as forthright as this minister when she said it would take three months, maximum six. I guess she was being less forthright and maybe not exactly leading us down the right path. Is that what the minister is saying? Who in this government is in charge of dealing with the process of the federal competition bureau examining the sale of B.C. Rail?

Hon. K. Falcon: It's, again, the federal government's process. It's not our government's process. Our role is, frankly, restricted to provisioning any information if they happen to request it. If they do, we'll provide it, and if they don't, we don't.

J. MacPhail: Mr. Chair, come on. I don't know what the minister thinks he's doing by playing so cute. Do the documents kind of just float up to the federal competition bureau? They started this process? They said: "Hey, I hear there's a B.C. Rail sale in British Columbia. Let's go see whether it meets the federal competition guidelines"? No. The B.C. government initiates the application to the federal competition bureau. Who in the B.C. government initiates the application? Who in the B.C. government is providing the information? Who is keeping track of the process?

Hon. K. Falcon: I'll remind the member that I earlier stated that any transaction that exceeds a $400-million-dollar level is what's regarded as a notifiable transaction. That means that the competition bureau is automatically engaged in a review. I would ask the member to keep that handy so she doesn't need to keep asking the same question. Of course, upon their engagement, any information that is required by them will be provided. That information is provided by a whole bunch of parties: B.C. Rail; CN, of course; shippers; and whoever else the competition bureau may require information from.

J. MacPhail: Who in this government is managing that process? Is there no central person or agency managing that process?

The engagement of the federal competition bureau is upon notification of the deal from the person making the deal, which is the provincial government. Who in government…? Are we so lacking in business expertise in this government that it's just willy-nilly? No one is on top of it? It's not being managed by an oversight committee or a person?

Who was responsible for getting the transaction agreements to the competition bureau?

Hon. K. Falcon: CN is responsible for notifying them and providing information. That information, as I've said before and I'll say again, is information that will be provided in cooperation with B.C. Rail, CN, shippers, whoever else the competition bureau wishes to get information from.

J. MacPhail: Just to be clear, no one in the B.C. provincial government is managing this issue, is in charge of this issue? It's out of the hands of the B.C. government or any Crown corporation or any agency. We're just sitting back and doing nothing. Is that what I'm to understand the minister is saying?

Hon. K. Falcon: I think the member's got that pretty good. The government isn't interfering at all in that process.

J. MacPhail: Well, these words will come back to haunt the minister. No one is accusing them of interfer-

ing. We're asking whether the government is doing its job, and clearly the answer is no.

How is it that the minister knows what he needs to keep secret, then, if the government's got nothing to do with this process? How is it that day after day they can tell the public what needs to be kept secret in a process that they have no involvement in?

Hon. K. Falcon: Candidly, I have no idea what that question meant. We've been very clear from the very beginning on this agreement, and I'll say it again for the umpteenth time: we've made a commitment that upon the completion of the review of the competition bureau, we will release all information as long as it is not commercially sensitive and as long it is in compliance with the Freedom of Information and Protection of Privacy Act. That statement I make again now.

J. MacPhail: Who made the determination, if it's such a passive process, that the transaction agreement is in any way related to the competition bureau? Who made that decision inside government? Did the competition bureau say that the ministry is not allowed to release the details?

Hon. K. Falcon: What I would say to the member is that — and it is critical that the member understand this — the reason why the government's position is that we're not releasing the transaction and revitalization agreement and schedules associated therein prior to the review of the competition bureau is because you don't want…. There is essentially no deal until the competition bureau signs off, and in the event that that were to be the case, we certainly would be at the height of irresponsibility to be releasing all of that information prior to confirmation that there is in fact a partnership arrangement between B.C. Rail and CN.

J. MacPhail: Is that written into the transaction agreement — exactly what the minister has just said? Is that written into the transaction agreement?

Hon. K. Falcon: Within the transaction agreement there is a provision that states that we will release the information — subject, of course, to the Freedom of Information and Protection of Privacy Act, which I've indicated to the member.

J. MacPhail: Does that clause also say the transaction agreement won't be released until the federal competition bureau has ruled?

Hon. K. Falcon: No, of course not. I'm sorry if that wasn't clear to the member. That's a decision we've made. We made that decision because we wanted to ensure, prior to releasing all of this information, that we'd only release this information once we knew there was in fact a transaction agreement that was approved by the competition bureau.

J. MacPhail: So it's the government's unilateral decision to withhold information about the transaction agreement. It's got nothing to do with the federal competition bureau. It's not an obligation under the transaction agreement. It's their own secrecy that's preventing the agreement from being released. Why? Is the minister saying that if the federal competition bureau doesn't approve the deal, the public will never get access to the information, then?

Hon. K. Falcon: No, what I'm saying to the member is what I indicated earlier — that is, the reason we wait until we have confirmation from the competition bureau is that we of course want to make sure that we don't inexorably and very damagingly undermine the negotiating and financial position of the province and B.C. Rail.

J. MacPhail: Okay, let's just take that a step further. Is the minister saying that because there's no legal obligation for him to withhold the agreement — not for CN, not for the federal competition bureau…? There's nothing in the transaction agreement; he's admitted to that. It's his government's own decision to keep it secret, and that's because he doesn't want to undermine the negotiating position of the government and B.C. Rail. Does it mean, then, that if the competition bureau doesn't approve this deal, it's back to the negotiating table? Is that what he's saying?

Hon. K. Falcon: One of the things we are pretty confident about, member, is that we have negotiated a partnership agreement that will withstand the scrutiny of the competition bureau. CN has had some experiences with the competition bureau before, back in Ontario. There were some lessons learned from that experience. We have been very rigorous and careful in ensuring that in putting together this partnership agreement, it reflects our analysis of prior decisions and the mandate of the competition bureau.

J. MacPhail: All the more reason that we should be suspicious of why the government is keeping the transaction agreement secret. There's absolutely no reason to keep it secret based on what the minister has just said. The minister has said over and over again — I've heard him on numerous occasions saying it — there's absolutely no reason why a government should be involved in the rail business. He won't release the transaction agreement. There's no legal requirement for him to keep it secret, but he also says that based on our analysis, we're pretty confident that the federal competition bureau is going to approve this deal.

Gee, who's the loser here? I guess the British Columbia taxpayer who wants to know what's inside the deal. Those are the only losers, but they tend to be the

Hon. K. Falcon: I'm not going to speculate on that. I'm an optimistic person by nature. I'm very confident in the agreement that we put in front of the competition bureau, and I'm not going to speculate on any outcomes until we have the outcome, and then I'd be happy to deal with that with the member.

J. MacPhail: So now it's not just a hands-off passive process that the minister was making out like before, that oh, they had nothing to do with the competition bureau, that the little pixie fairies were going to take it up to Ottawa for approval and then come back. It turns out that the government has done an analysis. I assume the minister means the B.C. government has done an analysis of the bid in relation to past federal competition bureau decisions. Is that correct?

Hon. K. Falcon: We conducted analysis with the shippers to ensure that the open gateway commitment was going to be consistent with the mandate of the competition bureau, vis-à-vis recent or prior decisions from the competition bureau.

J. MacPhail: Okay. Who's "we"? Is there anybody in the government that the minister can name who actually is in charge of the B.C.'s government's role vis-à-vis the federal competition bureau decision? The minister won't claim to have any alternate strategy, so I assume that on the government's great big $1 billion — maybe $750 million — deal, they've got all their eggs in this basket.

Hon. K. Falcon: I think the member is aware — if she's not, I'm happy to remind her again — that there was an evaluation committee. The evaluation committee brings together some of the brightest legal and accounting talent in the country to ensure that the information they are working on is the best information possible. The member appears to think that all these negotiations and decisions are being made directly out of the minister's office. I remind the member that there was an evaluation team. The evaluation team was tasked with a mandate and did a very good job in fulfilling it.

J. MacPhail: Oh, the minister misunderstands me. I don't think the minister understands anything about this deal. Believe you me, I don't think he's on top of it at all.

Who are the brightest legal and accounting minds on the evaluation committee? Just name the firms.

Hon. K. Falcon: Well, that included firms like Borden Ladner Gervais, CIBC World Markets, Aikins, MacAulay — that's Allan Foran at Aikins, MacAulay — and Travacon.

J. MacPhail: Who do those people work for — the B.C. government side of the deal or the CN side of the deal? How does it work?

Hon. K. Falcon: The firms that I mentioned, of course, work for the evaluation committee.

How often does the evaluation committee meet currently? The reason why I'm curious about this is that this deal is being booked in this fiscal year. I'm just curious as to when this great deal for the government is going to actually be booked.

Hon. K. Falcon: The first part of the answer is that the deal will be booked in '04-05, of course with the caveat on the presumption that the deal is going forward, subject to competition bureau review. As to the evaluation committee, the committee, of course, completed its work and is no longer meeting, because they've completed their work. We're waiting for the results of the competition bureau.

J. MacPhail: Does the minister or the evaluation committee or B.C. Rail have any alternatives if the, albeit unlikely, prospect — although I have no idea whether it's unlikely, given the recent pushback from various parties to this deal — that the competition bureau will approve this or not…. Does the minister have any alternate arrangements if the competition bureau does not approve the sale?

J. MacPhail: Yes, the minister said he didn't want to speculate. Well, why not? This is a billion-dollar deal. The minister is trying to tell me that he can't name anybody who's actually managing the process with the competition bureau. It's just kind of laissez-faire: "Let's stand back; we've got nothing to do with it." It was the most relaxed, hands-off description I've ever had of a process by a government — a billion-dollar process. That's just going to happen.

Is the minister saying the reason he's not going to speculate is because he's afraid of what may be revealed publicly? Or does he not have any alternative plans?

J. MacPhail: If there are no alternative plans, why does the deal have to be kept secret? If this is the deal, why does it have to be kept secret? The minister isn't going to…. There's no alternative to it. He doesn't have an alternative that he's going to go back to the bargaining table. He hasn't said that there's any alternative

except for this deal. If that's the case, if this is the deal, if there's no requirement by the federal competition bureau to keep the deal secret and no contractual requirement to keep the deal secret, why is the minister keeping it secret?

Hon. K. Falcon: Again, I've gone through that quite extensively with the member. I've indicated to the member the rationale and all the good public policy reasons why we've said that we will wait until the completion of the competition bureau review.

J. MacPhail: No, the minister hasn't at all. He said: "Our government made a decision to keep it secret until the federal competition bureau confirms it." What possible public policy rationale is there for that, to keep it secret?

Let's just go through it one last time. The transaction agreement has no clause stipulating that the transaction agreement has to be kept confidential — none. The minister says there's no clause that says the deal has to be kept confidential until the federal competition bureau has approved it — none. There are no further negotiations planned by the government if the competition bureau doesn't approve this deal — none.

The deal is the deal. Nothing is going to change. This government is going to keep the deal secret. There's no public policy rationale, there's no legal rationale, and there's certainly no transparency rationale to keep the deal secret. The minister somehow says he's explained that over and over again.

Is there any contract language in the revitalization agreement that requires the minister to keep the agreement secret until the federal competition bureau has approved it? He said there's no legal contract language in the transaction agreement.

J. MacPhail: No, he didn't. We were talking about the…. I know that the poor minister's getting tired. I can just see him wilting there. I know these are difficult questions for him.

He said there was nothing in the transaction agreement — no legal requirement to keep the deal secret. I'm asking him the same question about the revitalization agreement. I'd be happy to rewind the Blues for him.

Hon. K. Falcon: Once again, no, but I should state on the record that the minister actually is feeling very energetic and looking forward to going to the gym upon completion of this. I have lots of energy left.

J. MacPhail: I'm not sure at all what the minister thinks that contributes to the debate. I have no idea what he's….

The Chair: Members, if we could just keep the debate on the estimates and continue on with that…

J. MacPhail: The revitalization agreement has no legal requirement to keep the deal secret. There's no legal requirement to keep this deal secret, at all, from anybody. Yet this government has said: "We're going to keep the deal secret."

Let's just test a little part of the deal that the minister's just revealed: the sublease concept. That's his layperson description of it.

These short-lines that I listed, like the Dawson Creek-to-Hythe line or the Tumbler Ridge lines…. CN has to keep those operating for five years, and then they can discontinue them at their behest. The provincial government, according to the minister's own words, has no control over the future of those lines — whether they operate or not. It's then between CN and a federal bureaucracy. The minister describes it as a sublease. Is it CN that will control the sublease of the short-line operator if indeed there's one available?

Hon. K. Falcon: As I explained, there's a five-year moratorium on discontinuance. After that, there is a discontinuance process that CN would be obligated to go through. It's managed and controlled, as the member knows, through the Canada Transportation Act. If, through the completion of that process, there was no short-line operator that wished to take it over…. One of the great advantages of this partnership arrangement, of course, is that the government maintains public ownership of the railbed and right-of-way, and it would therefore revert to us, and we could do with it what we wish. There would be many options available for us to explore. There would be local government options. There would be first nations opportunities. There would many opportunities for government.

J. MacPhail: Really. I wonder where the rolling stock's going to come from. I can hardly wait to see the government say what kind of deal that is. No rolling stock; a line that's been abandoned by CN, who controls the entire rest of the province — a monopoly on rail transport, a monopoly on the rights-of-way and the railbeds in a lease — and some first nation's going to get a railcar from somewhere to operate the spur line, the short-line? I can hardly wait.

I'm referring to the description the minister himself put on record that it would be like a sublease. Who would that be a sublease with? Who would be the main lessor?

Hon. K. Falcon: Well, of course, CN has the right to the lease, so CN would be assigning that portion of

their railway in what I think I've aptly characterized as a sublease arrangement with a potential short-line operator.

I might also point out to the member that it's actually…. She says: "Where would people get the cars?" This is apparently a great mystery, and I'd like to clarify that most railways lease their cars today. Certainly, there would be an opportunity for anybody who the government, as owner of the railbed and rights-of-way, wished to turn that over to, to lease cars.

J. MacPhail: Yeah, but of course, that would be CN, because this government has sold all of the rolling stock to CN. The minister doesn't want to admit that when CN abandons these short-lines, they're abandoned. He doesn't want to admit that. The rolling stock in this province is owned all by CN. Nobody else leases rolling stock on short-line hops like that — one or two cars, or four or five cars — none. The short-line operator would have to negotiate the sublease with CN, because CN's the lessor.

It's just like la-la land that this government is about how the short-line rail would operate if CN decides to abandon it — just fantasy. There is absolutely not a hope in heck that a short-line operator would take up that line, or that a local government or a first nation would, because of the virtual monopoly that CN has on rail elsewhere in this province.

Mr. Chair, I have lots more questions about B.C. Rail and then, of course, B.C. Ferries, Transportation — the ministry itself. Noting the hour, I move that the committee rise, report progress and ask leave to sit again.

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