Hansard -- Tuesday, April 27, 2004 p.m. -- Vol. 24, No. 6 (HTML)


CONTENTS

	Routine Proceedings
		Page

Introductions by Members		10525

Tributes		10525
	Lee Doney
	Hon. G. Campbell
	J. MacPhail
	Hon. G. Bruce

Introduction and First Reading of Bills		10528
	Partnership Amendment Act, 2004 (Bill 35)
	Hon. G. Collins
	Community, Aboriginal and Women's Services Statutes Amendment Act, 2004 (Bill 36)
	Hon. M. Coell

Statements (Standing Order 25B)		10528
	Zajac Ranch
	R. Hawes
	Gun violence in Vancouver
	L. Mayencourt
	Cameron Elementary School Youth Credit Union
	H. Bloy

Oral Questions		10529
	B.C. Rail privatization process
	J. MacPhail
	Hon. K. Falcon
	J. Kwan
	Work of leaky-condo task force
	E. Brenzinger
	Hon. G. Campbell
	Impact of health support worker labour dispute on autism services
	J. Bray
	Hon. C. Hansen
	B.C. Rail privatization process and police investigation
	J. Kwan
	Hon. K. Falcon

Committee of the Whole House		10533
	Society Amendment Act, 2004 (Bill 32)

Report and Third Reading of Bills		10533
	Society Amendment Act, 2004 (Bill 32)

Committee of the Whole House		10533
	Miscellaneous Statutes Amendment Act, 2004 (Bill 18)
	J. Kwan
	Hon. C. Hansen
	Hon. R. Neufeld
	B. Lekstrom
	Hon. G. Plant

Report and Third Reading of Bills		10539
	Miscellaneous Statutes Amendment Act, 2004 (Bill 18)

Committee of Supply		10539
	Estimates: Ministry of Advanced Education (continued)
	Hon. S. Bond
	J. Kwan

Proceedings in the Douglas Fir Room

Committee of Supply		10554
	Estimates: Ministry of Transportation (continued)
	J. MacPhail
	Hon. K. Falcon

Hon. G. Campbell: Today in the House we have a number of leaders of the Sikh community in British Columbia who are here to celebrate the 400th anniversary of the first installation of the Guru Granth Sahib at the Darbar Sahib, commonly known as the Golden Temple. British Columbia is the first province in the country to actually proclaim the 400th anniversary of the installation, and I'd like to just take a moment to read the proclamation.

This is an important year for our Sikh community. It's important that they have shared their beliefs, their religion and their culture with all of us. They make our province richer, and I would like the House to make them all welcome.

Hon. S. Hagen: In the precincts today I am pleased to welcome as guests Mr. Geoff Horn, who is the teacher, and ten grades 9 to 12 students from the North Island Distance Education School in Courtenay. This was an agency that was set up in 1991 by a very progressive and very solid-thinking Minister of Education. Their mission statement is to support successful learning by providing student-centred, teacher-directed, distributed learning services through the use of diverse technologies and community partnerships. Would the House please join me in welcoming them.

Hon. G. Campbell: Everyone in the House recognizes the strength of our public service in the province and the contributions they make. Today I rise to recognize the many contributions of a career public servant, Lee Doney. He's joined today by his mother and his family.

Lee is retiring this year. Certainly, it will be a great loss to British Columbia's public service. His leadership has been exemplary. He joined the B.C. public service in 1975 when he started as a research officer at the Ministry of Labour. His contribution has accelerated from opportunity to opportunity. He was a director, general manager, manager, special adviser, chief executive officer of Forest Renewal B.C., the B.C. Labour Force Development Board, chairman of the WCB, director of the B.C. Treaty Commission, the provincial Round Table on the Environment and the Economy. He served as Deputy Minister of Forests and is currently Deputy Minister of Labour.

I should say that Mr. Doney has always been someone who gives us the best kind of advice from the public service. He provides and lays out a full array of options. He allows his political colleagues to work that through at the cabinet level. He has, in fact, been an exemplary public servant for the last 30 years.

On behalf of everyone in the House, I'd like to say thank you to Mr. Doney for his contribution and also thank you to his family for letting him be away from home so often to make sure that the public in British Columbia were served.

J. MacPhail: I am honoured to be able to take this opportunity to acknowledge Mr. Lee Doney as well. He has been a public servant through many governments. I actually first met Mr. Doney in the early eighties. We both started out our careers at the bargaining table. It will come as a bit of a surprise to people to know that we were on opposite sides of the bargaining table.

Mr. Doney was a big mucky-muck in government management back in those days of the early eighties. It was a terribly difficult time in negotiations. A huge part of the public sector was about to go out on a provincewide strike. The government was asking for concessions and wage rollbacks. I just want to say: gee, Lee, look how things have changed since you became Deputy Minister of Labour.

Anyway, I must say that between that time and this time, Mr. Doney has done great public service for all British Columbians, and we're delighted to join in his celebration of his retirement.

Hon. G. Bruce: Lee, of course, has had the pleasure of working with me for the last three years, and he's often told me that great line in Yes, Minister: "Yes, Minister, you're about to be very courageous." I appreciate those lines of counsel. You know, Lee and I get together and have worked well together simply because of the fact that his father actually coached my father in baseball years and years and years ago.

With Lee today is his mother, Marjorie, and his family: Kendall, Samantha, Stewart, Spencer and Shelley Larsen. I would ask the House to make them all feel very, very welcome.

Hon. G. Bruce: As you know, it's not often that I get folks down here that I can introduce. I'm always looking for a few other folks to be able to express my appreciation that they come from the Cowichan area.

Along for the proclamation that was read by the Premier here are people from the Paldi Khalsa Diwan Society in Duncan: Mr. Kuldip Singh Bhandari, who is the treasurer, and Suntokh Singh Ghainiji, also from the temple.

With my wife, Anneke, in this gallery over here are three individuals that really do a lot for our community. Greg Adams, who had a great career in the NHL, is here today with us and is still trying to teach me how to skate. Along with him are a couple of other guys that do just a tremendous amount both in the community of Lake Cowichan and in the community of the Cowichan Valley: Dave Johel and Jerry Doman. I'd ask you to make them all very, very welcome.

H. Bloy: It's my honour to introduce Simon Fraser University B.C. Young Liberals, present and past, who have once again made their annual trek to the Legislature. My colleagues will be introducing a number of them. The SFU B.C. Young Liberals has always been a vibrant club at SFU and a focal point for constructive debate and positive social events. The SFU B.C. Young Liberals are the second-largest club at SFU. It is my pleasure to introduce today Young Liberals from my riding, Tina Poole and Woosang Lee, who live in my riding. I am also proud to introduce Jessica Fuchs and David Godin from the riding of Vancouver–Point Grey.

G. Cheema: I would like to introduce a few special guests visiting from the lower mainland who join me today in celebration of the Guru Granth Sahib proclamation reception. From Dashmesh Darbar Gurdawra in Surrey are Kuldip Singh Jagpal, past president, and Mr. Kehar Singh Bains, the new president. From Surrey Guru Nanak Sikh Temple, which is in my riding, are Sadhu Singh Samra, senior vice-president; and two other dedicated community leaders, Mr. Mota Singh Jheeta and Mr. Pritam Singh Aulakh. I would like to thank all the members of the Sikh community in this province for their hard work and their dedication in building this great province. Would the House please join me and make them very welcome.

D. MacKay: Today I am pleased to introduce a couple of guests. I have the former mayor of Burns Lake, Paul Jean, and his wife, Doris, in the gallery today. The timing has got me a little bit perplexed here, because last time there was a health care issue that the government had to deal with, Mr. Jean actually slept on the lawn of the Legislature on a bed showing his displeasure with the issues around the health care issues. It's nice to see you back here again, Paul. Accompanying Paul is his brother, Clement Jean, and his wife, Margie, from Olds, Alberta. I'd like the House to please make them all welcome.

V. Roddick: In the gallery today, also celebrating the proclamation, is Ghaini Ji Harkit Singh, a priest at many Sikh temples. Will the House please make him very welcome.

J. Nuraney: As part of a group visiting us today is a person called Brock Stevenson. He not only happens to be a bright, young and intelligent man, but he's also a part of our executive in our riding of Burnaby-Willingdon. Will the House please join me in welcoming him.

Hon. C. Clark: I just had the pleasure of meeting with two representatives of the child and family services department in Denbighshire, North Wales, today. We talked a lot about the respective issues and challenges that we face and some of the great successes that we've both had in our ministries. We are joined today by Gwynfor Griffiths, Angela Mathison and Ian Scott. I hope the House will please make them very welcome.

G. Halsey-Brandt: Joining us today in celebrating the proclamation, we have three members of the Sikh community: first from the Nanak Sar temple in Richmond, Mr. Amrik Nijjar, who is the general secretary; from the India Cultural Centre of Canada, Mr. Sohan S. Basi, who is the president, and Mr. Avrar Singh Gosal. Would the House please make them welcome.

R. Lee: It's my pleasure to introduce three SFU B.C. Young Liberals to the House today. Miles Lunn, Ken Wong and Suki Wong are from North Burnaby, just east of Simon Fraser University. Miles and Ken have been very active in the riding association, and they have been my great supporters. Would the House please join me to give them a warm welcome.

B. Locke: I would like to introduce a few guests that are in the gallery today celebrating the proclamation with all of us. From the Surrey Guru Nanak Sikh Temple, Mr. Ajab Singh Johal, Mr. Jarnail Singh Billa and a good friend of mine, Mr. Jassa Grewal. Welcome.

R. Nijjar: I'd also like to recognize members of the Sikh community that are here for the celebration from the Vancouver area. From the East Vancouver Akali Singh Sikh Temple: Sadhu Singh Dhesi, Piara Singh Dhillon, Pritam Singh Aulakh, Rattan Singh Girn and Balbir Singh Purhar. Would everyone please make them welcome.

A. Hamilton: This afternoon it is my great pleasure to introduce one of my hard-working constituents, Helen Bates, who has been heavily involved with the military family resource centre at the Esquimalt naval base. Her countless hours of volunteer service are greatly appreciated by the entire community. I thank her for her time and look forward to congratulating her next Tuesday when she receives a B.C. community achievement award. Would the House please make Helen very welcome.

R. Hawes: From the Mission Gur Sikh Society and the Mission temple, I'd like the House to welcome my good friend and longtime associate, Terry Tarlok Singh Gidda, president; Karam Singh Mann, director; and Harcharn Singh Brar. Could the House please make them welcome.

S. Orr: I am privileged to have in my community three temples, on Topaz, Graham and Celelia streets. On behalf of all the South Island MLAs, I am pleased to welcome three members of the Punjabi Akali Singh Society and very valued members of our community. They are Charan Sangha, Charanjit Parmar and Shivdave Lalari. Would the House please make them all very welcome.

Hon. T. Christensen: It's my pleasure today to introduce two guests from Calgary. Doug and Diane Cox are here visiting Victoria and visiting their son Bryan, who is my executive assistant. I can tell them that Bryan has been doing an exemplary job, and there was only a small period of time a couple of weeks ago that we thought we might have to let him go, when he was cheering much too hard for the Calgary Flames. Would the House make them both welcome.

H. Bloy: I have two more introductions to make. First of all, I'd like to introduce two proud parents, Gino and Edith Ferronato. They are here visiting their son, Chris Ferronato, who is also a past Young Liberal and is working on an internship here. It's their son's birthday today. Would the House please give them a warm welcome.

There's a very special couple that I would like to introduce. I met these two young people four years ago, before I was elected, but I met them through the political process. They were both Young Liberals at SFU. They committed so much time to the Young Liberals at SFU, and they both worked on my campaign for election.

When I first met them, they were individuals, and I watched them mature and grow. Later they started dating and became a couple. The relationship developed over the years until last Saturday night when I had the honour and privilege of attending their wedding. It was a great day for their wedding, and they held the reception at — you'll know where — the Diamond Club at Simon Fraser University. Chris works for me as a legislative assistant. Would the House please welcome Chris and Janet Steinbach.

Hon. G. Campbell: This is a marathon day of introductions, and it's okay if we set a new record here. Let me just say that there's also another important thing that has taken place in the last few days. Congratulations should go out to a special team of people in Vancouver who worked very hard to win a national championship gold medal, and it actually happens to be from a great secondary school called Templeton Secondary School — not in my riding.

They have done a very good job. They have come out number one in the — now, I want you to hear this, and I hope Hansard hears this — the Canadian Smart Ask! competition. The Smart Ask! competition is what we used to think of in the olden days as Reach for the Top. I think it's great that a great British Columbia high school with great students has come out on top.

B. Locke: I also want to welcome to the House today two SFU Young Liberals, David Yau and Brandon Langhelm. They support me in my endeavours in Surrey. I thank them and welcome them to the chamber.

P. Sahota: In honour of the celebration of the proclamation, the two temples in my constituency, Shri Guru Ravidass Temple and the Canadian Ramagarhia Society, also send their best wishes and congratulations.

Hon. G. Abbott: A couple of introductions. First, I want to introduce two constituents from Armstrong, Roger Lockwood and his son James Lockwood. They're leaders in business in the community back in Armstrong. I also want to join with the member for Richmond Centre in welcoming Olga Illich, the incoming chair of the Assessment Authority board. I'd like to make them all welcome.

D. Hayer: I have two special groups of individuals here today. The first one are SFU B.C. Young Liberals from my riding of Surrey-Tynehead: my son, Alexander Hayer, and Richard Ly, who are also volunteers in my constituency association.

The second group is Rupinder Rue Bains from Indo-Canadian Times and Apna Roots newspapers, and Gurwinder S. Dhaliwal and Gautam Arora from PTV Punjab television station, here to celebrate the 400th anniversary of Guru Granth Sahib. Would the House please make them all welcome.

Hon. M. de Jong: Visiting from Abbotsford, home of the oldest standing gurdwara — and, I think, the only one in Canada designated as a national historic site — Mr. Nirmal Sanghera, Mr. Norm Sangha, Mr. Nazar Gill, Mr. Sukh Darshan Gill, Mr. Sadhu Sekhon, Mr. Jagtar Sangha, Mr. Malkit Dhesi and Mr. Mohinder Jawanda. I hope we will make them welcome today.

L. Mayencourt: I thought I'd get in on this act. I have a couple of friends visiting here as well. Candace Newton is a woman that I met recently. She runs a radio program called Unlocking the Secrets for Women. She's here today with her good friend Laura Prosko and Laura's mother, Margaret. They are filming responses from members of the Legislature to support the Rick Hansen Foundation. They're wonderful people. I would ask that the House please make them feel welcome.

Also, I have, from the SFU Young Liberals, Shaun Webb visiting. Shaun is an important part of our community. I would ask that you also make him feel welcome. I think that should just about do it.

Hon. G. Collins presented a message from Her Honour the Lieutenant-Governor: a bill intituled Partnership Amendment Act, 2004.

Hon. G. Collins: I am pleased to introduce the Partnership Amendment Act, 2004, which allows for the registration and operation of limited liability partnerships in British Columbia. British Columbia has lagged behind other jurisdictions in Canada and around the world in not having legislation providing for limited liability partnerships. These amendments will remedy the situation, making British Columbia an attractive place to do business.

Under the amendments included in this bill, partners in a limited liability partnership will generally have protection from personal liability for the debts of the partnership and the other partners. However, a limited liability partner will not have this protection in instances of negligence or wrongdoing by that partner. These amendments also contain a number of provisions to ensure that those who deal with the limited liability partnership are aware of that fact.

These amendments will bring this province into line with other provinces and countries around the world by allowing the registration and operation of the limited liability partnerships in British Columbia. They'll make this province a more attractive place to do business while at the same time providing a balanced level of protection to those who do business with the limited liability partnership.

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

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

Hon. M. Coell presented a message from Her Honour the Lieutenant-Governor: a bill intituled Community, Aboriginal and Women's Services Statutes Amendment Act, 2004.

Hon. M. Coell: I am pleased to present the Community, Aboriginal and Women's Services Statutes Amendment Act, 2004. This act makes minor amendments to a number of local government statutes for which my ministry is responsible — specifically, the Local Government Act, the Vancouver Charter and the Community Charter.

These amendments respond to some specific changes and requests that will further enhance and clarify aspects of local government legislation. In particular, these amendments will implement proposals from a joint development industry, local government and provincial government committee. These proposals will fine-tune aspects of the development finance system established in the Local Government Act and the Vancouver Charter.

The act will also provide regional districts with greater flexibility to adapt cost recovery for administrative-type services to meet unique local needs. Further, the act responds to requests by the city of Vancouver to clarify the scope of the charitable property tax exemption and the size of the board of variance under the Vancouver Charter. Finally, the act will ensure that a number of clarification and correction amendments that have been made on an interim basis by regulation are now enshrined in the Community Charter along with a few further housekeeping fixes.

I move that the Community, Aboriginal and Women's Services Statutes Amendment Act, 2004, be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 36 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. Hawes: Sometimes very good news can flow from bad. Last year, when it was announced that the minimum-security Stave Lake corrections facility was going to close in Mission, there was considerable angst in the community. Along came Carmen Zajac and Mel Zajac, her father, who saw great potential in the site, and they inspired the Mel Jr. and Marty Zajac Foundation to purchase the property and develop it into a camp like no other in British Columbia.

Transformed into a western village theme, the Zajac Ranch is dedicated to raising awareness, spirits and money to assist children with special needs. The Zajacs have recognized that for many of the more than 10,000 children in B.C. with special medical needs, their disabilities may prevent them from ever enjoying a summer camp adventure. The Zajac Ranch is dedicated to ensuring that they do have that opportunity, and children attend this camp free of charge.

As their brochure says, each program at the ranch is designed to improve the self-esteem, confidence and quality of life of each child in a supportive environment. At the Zajac Ranch, children will learn what they can do, not what they can't. Whether it's horseback riding, swimming, wall climbing or art expression, every program at the ranch is carefully crafted to bring out the best in every child. The ranch features an around-the-clock health centre offering everything from bandaging a minor cut to dialysis.

This is great news for the Mission district. This is great news for British Columbia. This is especially great news for the thousands of kids in this province with special needs. I would invite everyone to visit their website at www.zajacranch.com. Your support and your donations can really assist this outstanding and worthwhile cause. I'd ask that all members join me in giving a special thanks to Mel and Carmen Zajac and the dedicated volunteers on the board of the Mel Jr. and Marty Zajac Foundation for their amazing generosity and foresight in fulfilling this dream for so many kids.

L. Mayencourt: I don't know if it's just me, but I have become increasingly worried about the prevalence of guns and violence in our communities. It seems over the last little while that almost every week there's a shooting in Vancouver. I have a nightclub in my neighbourhood called Atlantis. In the past month they've had three shootings. There are families that live in the neighbourhood beside Atlantis, and there are children that live there.

What really concerns me is that the number of gunshot wounds we hear about are really only the tip of the iceberg, because there doesn't seem to be a mechanism in place to ensure communications between hospitals and police. We simply cannot have people in our communities worried about their children and their families not being safe as a result of gun violence. The Vancouver police department is doing what it can to crack down on this, but we need to be able to help them to keep our city as safe as can be. Already this year, the Vancouver police department has reported numerous incidents related to firearms, including weapons seized at Cordova and Granville, shots fired on Granville Street, gunfire exchanged at Carrall Street, shots fired on Commercial Drive. Just this week, a young man was shot after a concert that took place at the Pacific Coliseum.

Gun violence is becoming increasingly common among young people, and the concern is that if the first offence is not reported to police, there will likely be retaliatory offences. Young people are not only in possession of guns, but they are dying of gunshot wounds. For example, 21-year-old Rachel Davis stepped in to stop a fight in Gastown and was shot and killed. Her good friend, Sebastian Temper, was left wounded and traumatized by the incident.

Ontario is expected to table legislation this year that would require doctors to report gunshot and knife wounds to the police. Our own Dr. Roy Purssell, head of emergency medicine at VGH, feels legislation is necessary for change. This House has heard me speak about safer communities and safer streets on many occasions. This is just one more way that we can make our streets safer for our children. I urge doctors to report gunshot wounds to the police and be part of the solution, making Vancouver streets a safe place for kids.

H. Bloy: Last Tuesday I had the pleasure of meeting the Dalai Lama, Archbishop Tutu and Shirin Ebadi, three Nobel peace prize winners who contribute to the social conscience of the world.

Later that day at Cameron Elementary School, I met future business leaders of our country. Cameron Elementary School has opened my riding's newest credit union, the Cameron Youth Credit Union. This credit union opened in partnership with VanCity credit union. We had Dave Mowat, Van City's CEO, on hand to help get the credit union started. But the driving force behind this newest credit union in my riding is Margaret Gardiner, branch manager of VanCity on North Road, and Sandra Woodside, head teacher at Cameron.

The Youth Credit Union has its own board of directors: CEO, Yun-A Park; president, Amanda Chen; promotions, David Ma; secretary, Jovy Eramela; treasurer, Alvin Jang; board assistant, Sean Choi; Zulybeth Galan and Jessica Lee. These are all grade 7 students.

To date, this new credit union has attracted 87 customers with nearly $1,000 in deposits. The credit union will teach children to save and plan for the future. Not only do these students learn business skills, but they are earning money for their school. For every new client signed up by the bank, VanCity donates $10, and that's $878 to the school. This is an important program so that our next generation will learn financial values and the values of savings.

J. MacPhail: Last night in estimates debate the Minister of Transportation finally abandoned his message box. I don't think he meant to, but he did admit to a few things that haven't been previously admitted by this government. First, he finally came clean and admitted what everyone else in the province already knows: the Liberals have sold B.C. Rail Ltd. to CN — not leased but sold. He also admitted

that there is absolutely no requirement — not from the competition bureau, not from the agreement with CN — that the terms of this deal be kept secret from the public.

To the Premier: why are he and his government continuing to insist on keeping the details of this agreement from the public? What does the government have to hide?

Hon. K. Falcon: This member is a broken record in her ongoing attempts to try to create misinformation around this deal, and it just frankly…. I don't know whether it's just a complete lack of understanding on the most basic concept of business transaction or if she's just trying to be disingenuous.

I've said to that member and I'll say it again: the government, through B.C. Railway Company, is the owner — the landlord of the railbed tracks and right-of-way. Does she get that part of it? As the owner of the railbed and the rail tracks and the right-of-way, we have a partnership agreement to lease the operations of the railway to CN — who, by the way, will be investing some $5 billion of private sector investment into a railway that will help revitalize northern British Columbia and create enormous opportunities for the province of British Columbia.

That member needs to stop trying to misinform and get people thinking facts that aren't the case and actually listen to the answers that I give.

J. MacPhail: Oops, oops, he slipped back into his message box. Someone must have talked to him. Fortunately, we have Hansard, and everyone can go and see what the minister has admitted to over and over in estimates.

Here's what the minister also revealed. He also revealed that the cancellation of the sale of the Roberts Bank spur has cost taxpayers $900,000. We actually have reason to believe that the cost to taxpayers is considerably higher than that. Last month the Minister of Finance assured members of the House that CN in no way received any beneficial information from leaks, but yesterday that part of the story changed too. The Minister of Transportation admitted that highly confidential information was leaked from CIBC World Markets to CN at a critical stage in the supposedly open bidding process — information that was supposed to go only to the winning bidder.

J. MacPhail: I'm sure the Minister of Finance can stand up and answer if he wishes. He's up to his eyeballs in this too.

Can the Minister of Transportation explain how the confidential and competitive information leaked to CN did not give CN a leg up in the bid to buy B.C. Rail?

Hon. K. Falcon: You know, Mr. Speaker, the member knows we canvassed this very extensively in estimates. She's actually got all these answers on the record. This is just the member again trying to spread some misinformation, pretending she's creating new news where none exists. This has been on the public record. I encourage her to read the Charles River Associates report. It very clearly lays out all that information. That was information that was going to the proponent anyhow. They got it a number of weeks earlier, and that was all dealt with in accordance with all the rules brought together….

Hon. K. Falcon: The member is not listening again, and this is possibly why she never gets the answers right.

If the member would just refer to the Charles River Associates report, the independent fairness evaluator who came and reviewed and interviewed all of the proponents — all of the people involved in the transaction — came forward very clearly and said that not only was this a good deal, not only was this deal well run, but the province achieved more than fair market for the investment partnership with CN–B.C. Rail.

J. MacPhail: Well, the Hansard record is far more interesting on what the minister admits when he's not in front of the Premier. In fact, Charles River Associates doesn't reveal any of this information. Here is what the minister is not answering about.

Mr. Speaker: Order, please, hon. members. The Leader of the Opposition has the floor.

J. MacPhail: Here's new information we learned yesterday in estimates. CN had this confidential information during the open bidding process for October 8, 9 and 10 before they were asked for it back. CN originally offered a 5 percent rate reduction to shippers. Its final bid, after it had received this confidential informa-

tion, was a 7 percent reduction. What changed? Through an amazing coincidence, CN received a leak of — wait for it — highly confidential shipping rates paid by CN's competitors. That was the confidential information they received — and they alone. How can we be sure that CN…?

Mr. Speaker: Order, please. Order, please. It's time for the question, hon. member.

J. MacPhail: Well, I'm sorry. I understand that the Speaker…. That's fair enough.

How can we be sure that CN didn't use this confidential leak to its advantage and not to the advantage of the shippers in B.C.? What's to say that CN didn't use the information to lowball their shippers discount?

J. MacPhail: They lowballed their shippers discount because of that confidential leak.

Hon. K. Falcon: I would remind this House that these are exactly the kinds of conspiratorial questions that this member came up with ad infinitum in the estimates process. You know, she actually got all these answers. I guess she only reads one side of Hansard, and that would be her questions. Possibly the challenge is that she doesn't listen to the answers, as we're seeing displayed here again, because as I'm giving my answer….

Hon. K. Falcon: What I would say to the member is this: actually take the time to read the Charles River Associates report, the independent fairness evaluator who has an impeccable reputation internationally, who did a fairness evaluation. She refuses to read the report that answers all of those questions to everybody's satisfaction but, apparently, hers.

J. Kwan: Since 1996, CN has donated more than $122,000 to the B.C. Liberal election machine. Yesterday the minister coughed up yet another fact that we didn't know about. According to the minister, CIBC leaked the information to CN in mid-October of last year — only a few weeks before CN was handed the contract.

Let's be clear. CIBC identifies CN as the clear favourite in September. A few weeks later, CN is handed confidential competitive information, which it hangs on to for at least three days — information that results in it changing its bid. Subsequently, the other bidders pull out in protest.

To the Minister of Transportation: will he just admit that CN had the inside track all along and the government did everything it could to help the big election financier win the bid?

J. MacPhail: You're a lot braver now in this Legislature, aren't you? You're a lot braver. Uh-huh. They changed their bid.

Hon. K. Falcon: Again, we canvassed all this information. Actually, this information has been on the public record for a long time. In fact, I've had many scrums with members of the media over this issue. If that member would take just five minutes to actually read the Charles River Associates fairness report, in that report it explains it all there. I think what that member needs to know is what I told her in estimates. Apparently we're revisiting estimates.

Hon. K. Falcon: Well, the member is not listening again. I think the member needs to listen. Part of the reason you're not hearing this stuff is that you don't listen. If you'd listen…

Hon. K. Falcon: Mr. Speaker, it's a challenge to answer the question, because the member opposite continues to make noise and, therefore, frustrates my attempts to try and answer the question. One of the things that I've said to the member before — I said it in estimates — is that she knows full well that that information…. CN already had their bid forward. Their bid was in place.

Hon. K. Falcon: No. As the member knows very well, we engaged in negotiations with the lead proponent right up until the day before it was announced,

E. Brenzinger: The constituents of Surrey-Whalley have been asking about the status of the leaky-condo committee, of which I was a member. The Premier created this task force to investigate the status of the leaky-condo crisis. A report was produced and was reviewed by the Premier and the chair of the committee.

My question is to the Premier. Where is that report now, and why has it not been released to the public? Or was this task force created to keep the members busy and the public quiet?

Hon. G. Campbell: As you know, Mr. Speaker, many people have been affected by the challenges that have been presented by the leaky-condo crisis in British Columbia. This government, in our caucus and our caucus committee, has asked for a number of recommendations on how we might be able to move forward. We will do that only after review with the cabinet.

However, let me say quite clearly to the member opposite that I think she understands how hard all of our MLAs are working to solve challenges in British Columbia, and they will continue to do that.

J. Bray: As we know, currently there is the HEU job action that is occurring. Although we see it in hospitals, it's in fact having impacts across the health care sector. I've heard from many constituents in the last few days on those impacts, including a mother of an autistic son here in Victoria whose services are being withheld because of the HEU job action. These services include autism interventionists and occupational therapists, who are unable to assist these children in homes and day cares because of the HEU strike. These children depend on a stable routine to ensure that they have the supports they need.

Can the Minister of Health Services please tell me what options are available to this mother and other parents who need these services and are faced with removal of these services due to the strike?

Hon. C. Hansen: I think the point the member raises and the concern by that mother underscore the real hardship that British Columbians are facing because of the strike action by the Hospital Employees Union. There are so many contradictions in this strike. They claim that they are trying to protect patient care, and yet they are denying patients access to the care that they want. They say they're interested in collective bargaining, but they will not come to the bargaining table to negotiate a new agreement.

As the member may know, I talked to the Labour minister earlier today. I have asked the Labour minister to intervene, because I think that this strike has gone on too long. Too many people have been hurt. Too many mothers of autistic children have been hurt, and too many other British Columbians are being denied the care that they need. We will take the action necessary to make sure that the patients' interests get put at the top of the agenda.

J. Kwan: As we know, CN has pretty close ties with this government. The Deputy Premier, for example, had to absent herself from votes on the deal because of a potential conflict of interest. While the Roberts Bank deal has been scuttled, the government has said the main line deal is solid. Can the Minister of Transportation tell us: if tens of thousands of electronic documents seized by police in the seventh warrant have been fully reviewed by the RCMP, with the police investigation still underway, how can the minister be certain that the B.C. Rail deal isn't tainted by leaks of confidential information and allegations of criminal activity?

Hon. K. Falcon: It's always interesting when…. I guess it's just out of desperation, because they have no decent questions to ask, that they continue to come back on questions that have long been answered and explained.

I will say it to the member again. The member knows full well that the day I rose and announced the termination of the port subdivision process, I read a statement. I encourage the member to actually take some time to read the statement. The RCMP, as that member knows full well, reviewed and approved that statement prior to my reading it out. That statement said, in part, that there was absolutely no evidence whatsoever to suggest that CN was in possession of any information with respect to the main freight line deal. Those members appear to have a challenge accepting that most basic premise.

I'm sorry if you're failing in your attempt to continue to misinform, but good luck in the future.

Hon. G. Collins: In Committee A, I call Committee of Supply. For the information of members, we'll be

debating the estimates of the Ministry of Transportation. In this House, I call Committee of the Whole House for consideration of Bill 32.

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

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

Bill 32, Society Amendment Act, 2004, reported complete without amendment, read a third time and passed.

Hon. G. Collins: I call Committee of the Whole for consideration of Bill 18.

The House in Committee of the Whole (Section B) on Bill 18; J. Weisbeck in the chair.

J. Kwan: This section amends the Health Professions Amendment Act, 2003, passed just last October. The explanatory notes accompanying the bill say that this amendment "corrects an error." Actually, what it does is replace the word "possible" with the word "practicable," so it's more than correcting an error. It's the changing of a word. I'd like to ask the minister: is there a legal or practical difference between these two terms? Why is the change necessary? It appears to me that it's more than an error. It's the replacing of one term with another.

Hon. C. Hansen: What's driving the amendment was in fact a typographical mistake in the legislation. As it had read before, it was saying that the committee must investigate the matter raised by the "complaint," and it should have read the "complainant." That is what we are correcting.

In addition, while we were making the same change, the legislative counsel recommended that we change the term "as soon as practicable" to instead make it say "as soon as possible." That is simply to have more consistency with other legislation. I gather legislative counsel is going to try to do this across legislation as we move forward — to not use the word "practicable" but instead use the word "possible." In legal terms….

Hon. C. Hansen: No. What it currently states…. Hang on one quick second. I will get some clarification on that, and I will rise to my feet again in a moment, Mr. Chair.

In Bill 18, what is before us today is repealing section 23. In section 23 it will remove the words "by the complaint" and substitute them with "by the complainant as soon as possible." You have to go back to the original Health Professions Act, because the amendment that was put in last year, which had not actually been implemented, used the word "practicable." To make it more consistent with other legislation, we're actually taking advantage of this change today — the typographical mistake that's being corrected — to also change the term from "practicable" to "possible" to have it more consistent with conventional drafting practices across other legislation.

J. Kwan: In other words, there is no substantive difference. It is just a terminology issue, and there is no legal substance to these two terms — practicable versus possible.

J. Kwan: The section amends section 12 of the Hydro and Power Authority Act. Last year we amended section 12 of the act to provide for the privatization of a part of B.C. Hydro through the partnership with Accenture. In those amendments last year we specifically exempted the Accenture partnership from sections 3 and 5 of the act. With these amendments to section 12 of the act, we are now removing any mention of the word "partnership" and thereby any application of this act to any firm Hydro may partner with in the future.

The Premier has made much of keeping B.C. Hydro's core assets and functions under public control — the production, distribution and transmission of electrical power. We have any number of cabinet ministers and government supporters now publicly musing about building Site C and using the private sector to do so. Despite what David Black says about Hydro building Site C as it has the proven expertise, these amendments set the stage for Hydro to enter into a partnership with a firm to build large-scale projects like Site C.

How will these amendments, of course, impact on the Premier's pledge to keep Hydro's core assets in public hands? When it came to not selling B.C. Hydro, as the Premier promised during the last election campaign, we find a lease arrangement that extends in perpetuity, as it has renewal options extending for 900 years beyond the initial 90-year agreement.

The Attorney General, by all accounts, is a pretty good lawyer and will know that any contract with renewal terms — provisions that extend beyond any reasonable determination of the life of a fixed asset — is in fact a sale. I suspect that as a politician, the Attorney General is somewhat embarrassed to have to defend this so-called partnership with CN when the contract is explicit that it is no such thing. It is simply a landlord-tenant agreement.

My question relating to this section of the act is: can the Minister of Energy and Mines guarantee to this House that any new dams constructed by or on behalf of B.C. Hydro will be owned by B.C. Hydro regardless of any partnerships and not subject to any lease arrangements such as was entered into by the government with regards to B.C. Rail?

Hon. R. Neufeld: First off, there has been no decision to build Site C. There is a request before the B.C. Utilities Commission to review Site C to see if that would be an option for British Columbians, but there is in no way any decision made on building Site C. That would be something that would take a lot of discussion and consultation work with the B.C. Utilities Commission before any of those decisions are made.

I want to again stress, in case someone misunderstood some of the question, that the core assets of B.C. Hydro are publicly owned, will continue to be publicly owned into the future, have been publicly owned and will be publicly owned at least while this government is in office.

J. Kwan: If we use the B.C. Rail example, for which this government had used a 990-year lease with its core assets, you know what? By any stretch of the imagination, one knows that in such an arrangement, where the renewal provisions extend beyond any reasonable determination of the life of its fixed assets, it is in fact a sale.

While the minister says there is no determination as yet with respect to Site C…. The question to the minister is, though: will the minister guarantee that any new dams constructed by or on behalf of B.C. Hydro will be owned by B.C. Hydro regardless of any partnerships that would be entered into, and that it would not be subject to lease arrangements like that of the B.C. Rail situation?

Hon. R. Neufeld: This has absolutely nothing to do with B.C. Rail — nothing at all. This section deals with B.C. Hydro and cleaning up the act to a certain degree to make it more understandable and palatable to independent power producers that wish to build projects to provide incremental energy moving forward for B.C. Hydro.

As I said earlier, there has been no decision made on the construction of Site C — none whatsoever. In fact, B.C. Hydro, as I said earlier, has put some information before the B.C. Utilities Commission, which will review all that information. There has been no decision made.

The Chair: I must remind the member to keep her questions relative to section 14.

J. Kwan: Yes, and I use B.C. Rail as a way of an example where the government says there has been no sale, when in fact….

The Chair: Member, carry on, please. Keep your questions relative to section 14.

J. Kwan: I'm drawing the analogy of the government's action with respect to sales and lease arrangements with the B.C. Rail situation. As I mentioned, a 990-year deal in fact, in a sense, is no longer a lease arrangement but rather a sale, because the term actually extends beyond the life of the fixed assets. The question related to this section of the act is about Site C in terms of any possible partnership arrangements.

What is clear from the minister's answer, then, is this. He is not prepared to commit on record that this notion of partnership the government may well enter into, this notion of lease arrangements in the case of B.C. Rail, is in fact a sale of B.C. Rail. The government is not prepared to commit in this House with any new dam constructions that they would not sell off that asset. The government would actually ensure….

The Chair: Order, please. Order. Member, keep your questions relative to section 14, please.

J. Kwan: The Attorney General can take the floor and answer the question if he wants to. But the reality is this….

J. Kwan: My goodness. The government members are just a little sensitive these days. I wonder why that would be. Maybe it's because of all the different….

J. Kwan: Thank you, Mr. Chair. There are lots of sensitivities here around the government bench. There's a lot of nervousness, and I wonder why that is, particularly from the Attorney General.

J. Kwan: You know, there are two opposition members. We're asking questions that are completely legitimate within the debate of this bill. I asked a question about guarantee from the government with any of this notion of a partnership that the government would enter into with B.C. Hydro and this new dam construction with potentially Site C — whether or not the government will sell its assets like the government has done with B.C. Rail. That's exactly what this government does. On the one hand they sell off assets that belong to British Columbians, and then they turn round and say, "Oh no, we did no such thing," and we've got to call it all these other things that they call it.

The question becomes…. It's a critical one that I put to the minister. The question is this. The minister would not commit on record to whether or not he'll guarantee that any of these partnerships the government would enter into with respect to new dam constructions related to B.C. Hydro would still remain with B.C. Hydro — that they would be owned by B.C. Hydro. If the government is so certain about its approach of not selling off British Columbia assets, then the answer could have been, "No, we will not sell off B.C. Hydro assets or British Columbia assets, and we'll say with any new dam constructions: 'Yes, the answer is that it will be owned by B.C. Hydro.'" But the minister would not give that answer, and I wonder why that is.

J. Kwan: They say it's not relevant, just like the sale of B.C. Rail was not relevant to the new-era campaign of the Liberal government that said: "We will not sell…

J. Kwan: I guess that commitment was not relevant. Yes. Yes, that's exactly what the government is doing — promises made, promises broken. You know what? That's not relevant to debate. Why? Because the government is embarrassed about it, and they don't want to talk about it. That's why they say it is not relevant.

That's my interpretation of the minister's answer to the question. It's a simple question to the minister about making sure and guaranteeing to British Columbians that in fact any of these new partnerships entered into with B.C. Hydro in the new dam construction would be owned by B.C. Hydro, and the minister would not commit to that.

At second reading the Attorney General had this to say about these amendments: "Next, Bill 18 amends the Hydro and Power Authority Act to increase B.C. Hydro's business flexibility and to eliminate duplication and overlap. These changes will allow the corporation to become more efficient and cost-effective, and will also assist the corporation and government to implement a provincial energy plan by supporting low-cost electricity." Can the minister explain just how these amendments support low-cost energy when all new production is to come from the private sector?

Hon. R. Neufeld: Well, after that long-winded little spiel about B.C. Rail and about privatizing B.C. Hydro, it's not untypical of the opposition member to try and say things that are the furthest from the truth on a constant basis. After a while, I think, she believes it herself. It seems absolutely ridiculous to me for that member to stand up in this House and say anything about B.C. Hydro being for sale. That's the most ridiculous thing I've ever heard.

This government, under Premier Campbell's vision, has kept B.C. Hydro in the public hands. We've kept its core assets in the public hands so we can actually maintain the lowest rates in North America in public hands. The only administration that I know of in the last little while that was contemplating selling B.C. Hydro was the administration that that member was a part of. That in fact comes out in the records. That comes out in the records of B.C. Hydro in the voting.

The Chair: Member for Vancouver–Mount Pleasant, let's listen to the answer.

Hon. R. Neufeld: It was the last administration that wanted to sell B.C. Hydro. It was the last administration that did a poll on how people would feel about selling B.C. Hydro or B.C. Rail or all the Crown corporations. It was your administration that did that.

We've never done that. This is a public entity and will continue to be a public entity, and we will continue to have the lowest costs going forward in British Colum-

bia under the leadership of the Premier of this province. These sections will help us continue to do that.

J. Kwan: You know, I have to say that the government is a bit on the edge today. I wonder why that is, Mr. Chair. Yeah, okay, there is one opposition member in the House asking questions of the minister, and there are three ministers who feel they must heckle the one opposition member.

So be it, Mr. Chair. You know what? The minister says that the NDP was going to sell B.C. Hydro. No, that is absolutely not true. The options were put before the minister for full consideration, and the former minister rejected it, the former administration rejected it, and no B.C. Hydro of anything was sold off under the previous administration.

What is clear, however, is that this government said they weren't going to sell off B.C. Rail, and what did they do? They turned around and sold B.C. Rail. This government said they did not privatize B.C. Hydro, and what did they do? They brought in Accenture, pretty well to run the entire operation of B.C. Hydro.

They say: "Oh, we didn't do that; we didn't privatize. We did all these great, wonderful things." But you know what? They change the terms to mean whatever they want them to mean, but the public knows the difference. You, the government, Mr. Chair, can call the B.C. Rail lease, a 990-year lease, a lease for all intents and purposes. The public knows that is a sale.

The Chair: Member, member. Member, take your seat, please. Take your seat. Take your seat. Take your seat, please.

Member, we've asked several times now to stay relevant to this section. You are getting back to the same tired argument here. Please stay current with the section.

G. Halsey-Brandt: I'm very pleased that joining us in the gallery just above me this afternoon is a grade 5 class from the Jewish Day School in Richmond led by their teacher, Ms. Dodek. A number of adults have joined them on this trip to the Legislature, where they're learning about government and parliamentary procedure and decorum and good-quality debate, as we obviously have this afternoon here in the House. Would the members please make them welcome.

J. Kwan: The minister didn't answer my question on section 14. I asked the minister a question about how these amendments would actually support low-cost electricity when all new production is going to come from the private sector. The minister did not answer the question.

I asked the question of the minister for a guarantee that any new construction with new dams, with partnerships with B.C. Hydro — whether or not he would guarantee those would be owned by B.C. Hydro…. The minister would not provide that guarantee.

At the end of the day, what does it mean, and how does one sum up the information that is before us — that the government has sold British Columbia assets in many areas, as we have identified and seen throughout government? The government will call it anything else but what it is and the truth of what it is. You know what, Mr. Chair? This government can't try and fool British Columbians, because they know the difference. They know what the government is doing, and they will hold this government to account.

B. Lekstrom: Just a question regarding section 14. When I read this, when we talk about the Hydro and Power Authority Act, section 12, removing the ability of the authority to do the following…. It's the first bullet: "Demand particulars from persons who own, operate or control power sites, power projects or power plants." Can the minister explain just what that section really means in the context of, for instance, somebody putting water through a spillway on a run of the river? That type of information I think is valuable to the people in the area, to the environment and so on. In that context, how do we get that information?

Hon. R. Neufeld: The information about the water and the spillways can be accessed through the Water Act. That's where B.C. Hydro accesses its information, and the requirements of how they operate are through the Water Act, so that can be done through that act. The section here, section 12(1)(i), is actually a section we're removing that was used in the creation of B.C. Hydro under B.C. Electric. It has been there, I guess, since the first B.C. Hydro act, and what we're doing is moving towards taking some of those sections out. That's all that takes place there.

B. Lekstrom: Just one follow-up question, then. Having another act to cover the issue that arose is interesting and comforting to the people, I think, so they know there are other areas of government legislation that cover that. Would that hold true for the amount of power put back into the grid, for example, from somebody that holds a power generating site? They're going to contract with Transmission, I'm sure, with the amount of power. We would need to access that type of information as well. Is that encapsulated within another piece of legislation?

Hon. R. Neufeld: If an IPP sells to B.C. Hydro and has a long-term agreement — let's say a 20-year agreement — that agreement is directly with B.C. Hydro. If

they have an agreement with BCTC to wheel power to, let's say, a large consumer or if they want to build for export or something, then that agreement would be with BCTC.

B. Lekstrom: Under section 15, where we talk about the Hydro and Power Authority Act, sections 13, 21, 26, 28 and 29, it removes the following — and I'm going to go to the last bullet: "that the authority submit an annual report and financial statements for provision to the Legislature." Can you minister explain the removal of that provision and why?

Hon. R. Neufeld: This is just cleaning up, because that requirement already exists in the Budget Transparency and Accountability Act.

J. Kwan: In section 19, the explanatory note for this section says this amendment to the Interpretation Act "facilitates the new table format for commencement provisions by establishing a general rule respecting retroactive commencement of provisions in an act." But to read the amendment, one would be hard-pressed to find any mention of the new table format — a format already in use in bills before this House, including, in fact, this bill.

There is no legal or parliamentary reason for the Interpretation Act to be amended to allow for the use of a table rather than what has been the case thus far of simply listing the differing coming-into-force dates of any given act. What this section does is captured in the explanatory note, where it says this amendment establishes a general rule respecting retroactive commencement provisions.

It is curious that this government has seen fit to amend the Interpretation Act to permit what, not too many days ago, the Minister of Finance, the House Leader, argued quite strenuously was a perfectly legal and appropriate parliamentary measure. In fact, the Government House Leader, the Minister of Finance, stated that he had consulted legislative counsel before his December tax increase announcement and was assured that all was in order.

Yet here we are today establishing in legislation the right to enact legislative provisions including increasing taxes retroactively. Given that the Minister of Finance says everything was done in order, one has to question why the Interpretation Act is now before the House with this amendment. Can the Attorney General tell this House why this amendment is necessary, if legislative counsel says that there is no need for it? Will the Attorney General table any and all legal advice provided to the Minister of Finance in regard to retroactive, retrospective legislation?

Hon. G. Plant: The Interpretation Act, which is being amended in this provision, is a statute of general application. It accomplishes a number of goals. One of the things it does is contain some definitions or words that appear in a variety of statutes. Sometimes in order to read a statute completely, you've got to make sure that any particular provision you've got in front of you and the words in it don't have a unique meaning that might be found in the Interpretation Act.

So the Interpretation Act is, among other things, a sort of users' guide to how to read statutes. It sets out some rules and some principles about how statutes are to be read, how they operate and their legal effect. What's being proposed here is an amendment to streamline — I think the word is — in effect, the way in which commencement provisions are to be drafted in statutes on a going-forward basis.

There are a number of ways you can draft commencement provisions. There are some changes that have been made recently to try to change the presentation of commencement provisions so that people can see more quickly when a particular section comes into place. Sometimes legislation includes provisions that are intended to operate retroactively. The traditional practice that's been followed in this House is that the bill that contains a retroactive provision will have at the end of it a section which says when that retroactive provision is to come into effect and will contain language that expressly makes the provision retroactive to the extent necessary to give it force and effect on and after that earlier date.

What we're doing here is nothing more and nothing less than removing the requirement to do that in every single bill by creating here a general rule that will be found in the Interpretation Act. The way the general rule will operate is that anytime an act contains a provision to the effect that it or some part of it comes into force on a date that is earlier than the date on which the bill is given royal assent, then the act or that part of it will come into force in accordance with the provision in the bill. It will be deemed to have come into force on the earlier date and will be deemed to operate retroactively, in the language used here.

What it really is, is sort of a legislative drafter's tool of convenience to help drafters make legislation easier to read. Really, this is an initiative that came forward on the recommendation of legislative counsel, who are always looking for ways to make our statutes easier to read and use.

J. Kwan: If the Attorney General says that this is just housekeeping in some ways, if you will, to streamline all the other pieces of legislation where the government is putting forward actions — for example, the tobacco tax that the government had introduced prior to legislation being introduced…. Therefore, this section of the act would rectify that problem so the government can then introduce tax grabs any-

time they want without debate, because then all they can do is just fall back on this provision to say: "Well, there's a provision that says we can collect this illegal tax retrospectively" — in that instance with the tobacco tax —" and so therefore everything is in fine order."

If the minister says that is in fact the case, then on the question to the minister about all legal advice that was provided to the Minister of Finance in regard to retroactive legislation relating to the Tobacco Tax Act provision, will the minister commit to tabling that information to this House?

Hon. G. Plant: All governments from time to time are required to legislate retroactively. Certainly, the government that was in office when I sat in opposition for five years legislated retroactively. All the retroactive provisions contained in those bills back then had to have a separate provision in each bill where such a provision was found to explain that the section in question or the portion of the bill or all of it would operate retroactively.

For example, when the former government was required — as a result of the litigation in the probate fees case in the Supreme Court of Canada — to retroactively repair its collection of probate fees over a number of years, it brought in an act called the Probate Fees Act, I think. That act contained a number of provisions that ensured that all of the tax that had been collected under a provision which the Supreme Court of Canada had, in effect, declared to be unconstitutional could nonetheless be deemed to have been collected under a lawful provision.

There was similar legislation introduced by the former government to repair some of the challenges they experienced when they unlawfully attempted to administer gaming, changes to gaming practice and policy. Again, that was legislation — it was Bill 51 — that had retroactive provisions in it.

As I say, all governments are required to legislate retroactively from time to time. I think most governments, perhaps all governments, do so reluctantly, but sometimes they do so because they have to. All that's being provided for here is a change in the rules of drafting that will simplify, without affecting substantively, the way in which retroactive legislation is drafted.

The member may have arguments from time to time about whether legislation can be made retroactive, either because she has concerns about parliamentary practice or substantive law or just her sense of what makes good politics. Those arguments will continue, and nothing in this amendment will affect those arguments one way or the other. This is really just changing drafting conventions.

J. Kwan: I will remind the minister…. I quote the Minister of Finance when asked the question about the illegal tax grab on the tobacco tax. His response was: "We did speak to legislative counsel before making this announcement and were assured that it was in order." Of course, the government introduced legislation after the fact with the tobacco tax, and the House was still sitting, actually, on December 16. The government didn't introduce legislation on December 16, but then on December 19 the government made this announcement that they're going to have a tax grab of $6 million without the matter coming to debate in the Legislature.

Now we have this section of the act, section 19, amending all government actions. The government would like to call it streamlining, but the reality, in my view, is this. The government is paving the way for any mistakes it might make in the future and is paving the way, actually, to justify the actions of what this Minister of Finance had engaged in. That was essentially to engage in an illegal tax grab.

The Chair: Member, I must caution you on that. It is improper language to use in this House, and you will have to retract that. Thank you.

The Chair: Member, I asked you please to retract that. You referred to a statement as being illegal. I would have to ask you to retract it, please.

J. Kwan: I will retract that. But you know what? The public knows what it is. The government actually….

But I do want to actually highlight an issue on which we're engaging in discussion under section 19. That is that the government introduced and brought into force a tax grab on British Columbians without having the matter come before debate in the House. The House was sitting in the Legislature at the time when the government brought this announcement to British Columbians on December 19. On December 16 the House was still sitting, just three days prior to government introducing this tax grab. There was nothing introduced in the House, and then three days later they introduced this tax grab without any legal authority — because the matter has not been debated in the House, and it was retroactive.

The Chair: Member, take your seat, please. Take your seat, please. Member, the Speaker….

The Chair: Member, the Speaker has ruled on that issue, and the matter has been put to bed. Thank you very much. Proceed now with section 19.

I'm using this as an example to highlight the issues being raised under section 19. Section 19 before us is dealing with a situation where the government is allowing, from now on, for any retroactive legislation that could come into force, in what this Attorney General says is just simply streamlining. But in my view, as I stated, it is to cover the government's tracks in terms of what the government has done. The most recent example is the tobacco tax.

If the Attorney General and the Minister of Finance are so confident with their actions to date, why won't they just simply commit to providing all of the legal advice and documentation they have received regarding the tobacco tax for this House's information so the public can judge for themselves in terms of what that legal advice is? They can make that determination. For this government, the Minister of Finance and the Attorney General to say: "Everything is just fine. Just trust us…." The track record of this government's word has been anything but trustworthy to date.

Hon. G. Plant: I should explain a little bit more, perhaps, about how the provision will operate. As I said earlier, all legislation — well, almost all legislation — has some commencement provisions. Sometimes the bill doesn't have a commencement provision because it simply comes into force on royal assent. But oftentimes legislation has a commencement provision or more than one commencement provision because the intention is to phase in the operation or the implementation of the legislation to allow for regulations to be drafted or something similar. Commencement provisions are certainly a familiar feature of legislation.

As a result of the change in drafting practice that is already being implemented and the change in procedure that will be permitted by the passage of this amendment, what members interested in looking at legislation will see is a slightly different set of provisions and a slightly different-appearing set of provisions around commencement.

Now, as I said earlier, occasionally governments are required to legislate retroactively. All governments do it. The member clearly has an interest politically in the subject of retroactive legislation. So, now the question before the House is this: does this legislation, this bill, do anything that would remove the ability of the opposition either to identify that a provision is retroactive or to debate that issue of retroactivity? That is, is there something before the chamber that would allow government to hide or obscure that it is attempting to legislate retroactively? The answer is: there is not anything here that will hide retroactivity.

Any statute that has any provision in it which needs to operate retroactively will have a commencement clause that will identify that fact at the end of the bill. There will be a commencement clause which says that the act comes into force on a particular date. In fact, I suspect in most, if not all, cases there will be a title to that provision which will expressly identify that the section is intended — or some section is intended — to operate retroactively.

The member can't stand it when she is corrected. She can't stand it because she knows she's wrong, and she won't answer. In fact, I say: let's hear from the member. Let's have a chance to hear from the member in her chair on the fact that we've answered her question. What are the concerns she has about the section? Her concerns apparently may not extend to continuing the question on this section.

The fact is that all this does is change the way in which retroactive provisions are presented in legislation. Any member who has a concern about an issue of retroactivity will have all the opportunity they need to pursue that issue vigorously, and I'm sure that it will be pursued vigorously whenever the issue arises.

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

Bill 18, Miscellaneous Statutes Amendment Act, 2004, reported complete without amendment, read a third time and passed.

Hon. G. Collins: I call Committee of Supply for the consideration of the estimates of the Ministry of Advanced Education.

Hon. S. Bond: Mr. Chair, I would just like to introduce the staff that are with me. I have with me my

deputy minister, Philip Steenkamp; Tom Vincent, my assistant deputy minister, student and strategic services division; and Arlene Paton, the director of the public institutions branch.

J. Kwan: Prior to the lunch break in the estimates of Advanced Education, I was asking the minister questions about the on-line piece on the provision of advanced education. The minister committed to finding out for me some information with respect to that — the actual cost to deliver the on-line education on a per-space basis and if there is a wait-list in British Columbia for people to try to get into on-line learning. I believe the minister actually didn't have the exact information on the tuition fee piece. Oh no, the minister did have the information on tuition. She said the tuition is the same, which raised, in my view, the important point of finding out how much it costs to deliver the on-line learning so that we can compare that information.

Now, on the comprehensive strategy that the minister talked about and that's included in the throne speech with respect to increased access to advanced education, there were other things within it that the minister mentioned. One was the issue of targeting the aboriginal community with respect to access to advanced education. I wonder if the minister could elaborate on the work that the government is doing with respect to that — what programs, specifically, are in place and any updates the minister might have with respect to that.

Hon. S. Bond: In terms of our work with first nations students and the opportunities that we have, we have actually done a considerable amount of work on the aboriginal policy framework. One of the things that we wanted to do was be sure to be inclusive and make sure that first nations were providing the leadership as we looked for input. Very recently, within the last couple of months — the days fly by — we held a forum called Open Space. We brought together leadership, educators — just an incredible group of people from across the province — to talk about aboriginal and first nations student needs. That was one of the goals we had set working with the first nations leadership.

Secondly, we have just recently provided funding for there to be a position called a first nations education steering…. Actually, that's the committee that we're working with — a coordinator, $90,000, so that we can work more closely together with first nations organizations. In addition to that, we continue to fund $1.5 million — it was previously $1.3 million; we raised the dollars in that particular fund to $1.5 million — in the aboriginal special projects fund.

One of the things that's critical to me is that as we move forward with those funds and with the projects that are in place there, we involve the first nations leadership and educators around the province in the effectiveness and the appropriateness of those particular projects — working very closely with first nations in order to, frankly, improve the participation rates of aboriginal students in post-secondary institutions.

J. Kwan: A number of questions for the minister. First, the first nations community that the minister says she's working with — who are they?

Hon. S. Bond: First of all, we are trying very hard to involve a broad spectrum of people in the first nations community. For example, at our Open Space conference, which was a forum designed by first nations people actually, with the format we included the First Nations Summit, the Union of B.C. Indian Chiefs and several urban aboriginal organizations. We also included representatives of the Métis organizations, and we involved people who teach and are involved in the post-secondary system. We brought band coordinators together as well as first nations coordinators from throughout the college system.

We are working very hard to receive their input to look at how we can better serve the needs of their students in this province. We think it is important that they provide that kind of input. I'm really pleased about the ability to bring together a coordinator, which we just recently funded and which is not even in place yet. I think that in the very beginning of May that position will be in place. I have had the opportunity on a number of occasions to meet with Grand Chief Ed John as we, together, try to figure out how best to serve the needs of aboriginal students.

J. Kwan: The committee that the minister talked about — who is on that committee?

Hon. S. Bond: The first nations education steering committee is not one of government's. It is actually a product of the First Nations Summit. They bring together representatives from all across the province to discuss first nations education issues. I believe there is one on the K-to-12 side as well, and I'm not sure if they're part of that particular group. There are leaders from all across the province, and it is through the first nations education steering committee that we will be providing the funding for a coordinator's position. A couple of the names that come to mind in terms of committee membership would be Nathan Matthew and Christa Williams. We meet with them — certainly not frequently, but we have met with them — and they are the connection to the First Nations Summit.

J. Kwan: The coordinator, presumably, came out of the recommendation of the committee. Am I right in assuming that? In that instance, does the coordinator work for the committee, or does the coordinator work for the government?

Hon. S. Bond: The coordinator will be employed by the first nations education steering committee. One of the reasons it was important was that much work had

been done on the K-to-12 side, and there was a more collaborative approach there. So while the person will be an employee of the first nations education steering committee, our expectations are that they would liaise with government so we can do a better job of serving the needs of aboriginal students. There will be a role of liaison with the government, but ultimately the money will go to the first nations education steering committee for them to employ the person.

J. Kwan: So the position is funded by government, but the individual is chosen by the committee, and for all intents and purposes, the person actually works for the committee. Okay. The minister says that the individual has been chosen already, so that position is up and running?

Hon. S. Bond: It certainly will be a competitive process led by the steering committee. That is a process they will put in place. I'm not certain of the status. We're not sure if it's actually been posted or if they've done interviews, but it will be up to the first nations education steering committee to choose the person they think will best be able to help them provide leadership through the committee.

J. Kwan: Under the special projects account, if you will, for the aboriginal community, the minister says there is a $1.5 million budget for that. What are the programs under this $1.5 million special account?

Hon. S. Bond: The goal of the program is actually to have a partnership between post-secondary education and an aboriginal organization. Typically, it can be between a public post-secondary institution and either bands or tribal councils or aboriginal advisory councils.

The programs that have been sponsored over the last number of years are…. There's a large number of them, and they are very diverse. They include things like justice, trades, teacher training, adult education, social services, natural resources, administration and creative writing. They can also provide additional supports to institutions or to bands or just help students be more successful in their education.

A committee is put together with first nations representation that actually reviews the proposals and makes the selections, because we obviously get more proposals than we have dollars to fund. It's been very successful. I don't have the list of all of the projects that have been completed and supported over the last year, but I'd be happy to get that information and send it to you in terms of the specifics of those programs.

J. Kwan: Are these grant applications to which community groups apply? I'm not sure if I'm following at all what the program is exactly.

Hon. S. Bond: The current amount of funding in the program is $1.5 million. What we wanted to make sure we do is spread the availability of those dollars across any institution that has first nations students or interests. First nations representation actually select the proposals. An institution might have a particular need for their students in a particular area. It has some sense of a competitive process, but it's not granting in that sense. It is a pool of dollars which all the institutions, universities and colleges, are aware of. Together, first nations coordinators, for example, can generate the request and work with their institution.

It is about partnership. We do expect post-secondary education institutions to partner with an aboriginal organization. It is a competitive process. We increased the pool of dollars available to $1.5 million this year. It was $1.3 million last year.

J. Kwan: Okay. So the $1.5 million in this special account are dollars set aside for institutions that have something to do with aboriginal students and aboriginal programs within their institutions. I think that's what I can gather from the minister's comment to date.

I'm just trying to figure out how this works, as an example, and therefore how it translates on the ground for an aboriginal student, let's say. Can the minister give me an example of one program with one particular institution — what dollars it receives from government through this special account and what it is trying to achieve?

Hon. S. Bond: Certainly. Probably the best way for me to explain it is to give you a couple of examples, because there have been some extraordinary opportunities for aboriginal young people. Let me give you an example. At University College of the Cariboo, the aboriginal…. This would have come out of the aboriginal special projects fund. The aboriginal youth skills training program, for example, received $67,655 for recruitment, student support and program delivery. It was a summer training program at various locations in the city of Kamloops.

The program began with 14 students. Students earned occupational first aid, work-safety ergonomics, transportation of dangerous goods, WHMIS, transportation endorsement, fire safety, confined space, fall protection. Thirty percent of the students were able to find full- or part-time work, and an additional 30 percent of the students are now actively pursuing post-secondary education. The University College of the Cariboo and their aboriginal coordinator and a partnership would have created this particular program in meeting a particular set of needs.

That was at the University College of the Cariboo. Let me give you an urban example. Capilano College did an aboriginal film and television production program. It developed a second-year diploma program. They received $75,000 from the project fund for curriculum development, and what they did was create a 28-week ongoing program, including a five-week practicum, that provides aboriginal students with high-quality production training from the aboriginal perspective. It is base-funded by the college.

We've had two classes — 20 students and then 18 students. The good news about that was that while it

started as a pilot project funded with some seed money, that program has actually been rolled now into Capilano's base programming. The other thing is that it's developed an incredible relationship with the aboriginal arts department at the Banff Centre for the Arts, which allows for that transfer to advanced work-study or non-credit production training at the Banff Centre.

Those are the kinds of excellent programs that the fund begins. Then institutions from there hopefully roll it into their base programming.

J. Kwan: The partnership that the minister talked about in these kinds of initiatives — what role does the partner play with the institution?

G. Hogg: In the precincts at this very moment we have a group of exciting, dynamic students from H.T. Thrift Elementary School in Surrey, along with parents and their teacher, Mr. Daggett. Would the House please make them most welcome.

Mr. Chair, if I may use the prerogative while upon my feet, I'd also like to state that in the precincts today were 37 grade 5 students from Star of the Sea Elementary School, along with their teachers, Mr. Durante and Ms. Kaye Kyne. They had many dynamic, exciting questions, as did the students from H.T. Thrift. I'd like the House to also make them most welcome.

Finally, wanting to give the Minister of Advanced Education as much time as I possibly can for her to confer with her staff and get everything exactly correct for the questions from the opposition, in the precincts today was Mr. Shivdave Lalari. He was with members of the Sikh community to celebrate the 400th anniversary of the Guru Granth Sahib temple.

I would also like to introduce Ms. Kuldip Lalari. Kuldip is the mother of one of our dynamic and exciting caucus staff members, Terry Lalari. She's also well known for making wonderful samosas for caucus. I would like the House to please recognize them today at this point.

G. Hogg: Was the Attorney General asking to come to our office and eat the samosa? Was that the…?

Hon. S. Bond: In terms of what role the first nations have in these aboriginal special projects, certainly it's different in different circumstances. For example, they might be in an advisory capacity in curriculum development, because what's incredibly important is that we have an appropriate cultural perspective. Very key is the preservation of language, so they are often involved in those roles. They also have helped with labour market needs, assessing how best first nation students can fit into the workforce. We also, in some cases — and it's not as frequent as some of the advisory capacities — have actually delivered services on reserve. Obviously, they're then involved in the actual delivery. So it's a wide variety of ways, but there is an assumption of a partnership that the post-secondary institution should be able to demonstrate.

J. Kwan: I'm glad to hear the minister's answer. What I was trying to get at and what I was hoping for is that it's not contingent on first nations communities partnering up with financial contributions. I worried about that, if that was the case. Obviously, that may not be feasible for a lot of the first nations communities to participate in. I'm glad to hear that is not the criteria and that, in fact, partnerships are looked at in a much broader context than that.

In terms of the students' participation in these various programs, what process does one go through to try and get access to these kinds of initiatives?

Hon. S. Bond: Well, again, there isn't sort of a one-size-fits-all answer to the question, because it's a mix of programs. Even in just the two examples that I gave the member opposite…. Both of them, by the way, give me incredible hope for opportunities and expanded opportunities for aboriginal students, and I think we are working very hard to do that.

One of the examples included students in grades 6 to 8. That perhaps was a partnership between a school district and a post-secondary institution. One of the challenges we find is, obviously, keeping first nations students in K-to-12, and we're trying very hard to look at recruiting and retaining those students. If typically students are members of a college or a university, though, those core courses would be offered just like any others, and students could choose to participate.

Another way is that when they're offered on a reserve, the local community does a lot of work to actually recruit and bring the number of students necessary. If you were going to offer an LPN course, for example, they need to make sure there's the critical mass necessary — a variety of ways. In essence, that's why it's targeted funding, in a sense, to try to reach the particular group that we want to try to attract to the system — a mix of programs and a variety of ways of trying to bring students into those programs.

J. Kwan: The programs that the minister talks about — I presume that the funding they receive from government would be one-time funding only. Have

there been instances where programs have proven to be successful and the government has actually decided, "Hey, you know, this works, so let's fund it and give it core funding," so that it could sustain itself year after year to maximize the potential from these kinds of initiatives?

Hon. S. Bond: That's a good question. One of the programs I gave an example of was the Capilano program. In fact, that one was so successful. Of course, Capilano has a great focus on things like film and production and those kinds of things. These are pilot projects. The member opposite is correct: it is one-time funding. One of the challenges we face is then, if those projects are successful, moving them into an institution on a regular basis. What we have done and what we encourage institutions to do…. There is no blanket funding that goes with it after that point, and that's one of the challenges. Institutions, though, have chosen, seeing the success of the programs, to roll them into their core program offerings. They take some of the new FTE growth that we have added. For example, out of the 25,000 seats, they could choose to take 14 seats and replicate this program.

But it is an issue that we need to work on, on an ongoing basis. The point is obvious. It's one-time funding, and we need to make sure that we are evaluating those programs. And if they are successful for first nations students, we need to find a way to make sure they continue on into core programming.

J. Kwan: In the instance with Capilano College where it's the curriculum development, it's easy for it to be duplicated because once the curriculum is developed, you can use it time and again. But with some of the other programs that the minister highlighted in the House today, it seems to me that those are not easily duplicated unless you have ongoing funding for them. It's more than an issue of the institution just accepting it as a curriculum within their institution.

On that basis, I would argue that there is a need and a mechanism for the government to actually come forward with ongoing core funding for these initiatives. The whole purpose, I think, with pilot programs is to test them to see whether or not they work. Then once we figure that out, if they do work, it's to keep it going so that you can maximize the success of that pilot initiative.

So I hope the government will actually undertake to do that work as part of this new comprehensive strategy. I also hope it's not going to be a case where the government will say, "Yeah, okay. So we see that these initiatives work," but instead of funding it, giving it new additional money, it just tells the institution to rob Peter to pay Paul. We know that with those kinds of practices, all it does is prove to be divisive and prove to be, I think, very unfortunate in many instances. Sometimes in that kind of approach, instead of all the good intentions that were there, the good intentions are then lost because of the funding pressures, and then the good work that has been established will be lost through time. That would be most unfortunate.

So I hope to see in the government's budget next year that there will be specific targeted dollars for these initiatives, for ongoing funding for successful pilots. I'll be canvassing those questions with the minister next year in the estimates debate to see how we're doing. I'm just going to flag it for the minister. It's going to come back again next year on that.

Okay. That's the aboriginal special projects. Now, on the literacy fund, the minister says that the funding has increased to $1.4 million. Maybe, first of all, the minister can give me some information on what that entails in terms of the $1.4 million for the literacy initiative.

Hon. S. Bond: The fund that we're talking about here is called the adult literacy cost-shared program. I'm actually pretty proud of the fact that we just doubled the funding to this as our commitment. Certainly, the Premier has made it clear — and we agree — that literacy is absolutely critical for British Columbia and for people who live here, so we recently doubled our commitment to the adult literacy cost-shared program. Previous to this, we had contributed $700,000 annually. It is ongoing funding. It is part of our budget. We have doubled that now.

It is cost-shared with the federal government. They currently contribute $944,000 to this program, and you should know we are urging the federal government to match those dollars. We'd love to have them double their contribution as together we tackle literacy issues in British Columbia.

One of the things I appreciate most about this program is that much of the provincial funding goes to community-based literacy groups. One of the things they do a lot in the province is train volunteer tutors, who deliver one-to-one literacy instruction. It also supports a number of activities such as family literacy.

I can't begin to think how much more we're going to be able to do by doubling our contribution, and just think what the possibilities would be if the federal government came to the table with us as well. In essence, it is an opportunity for us to work particularly with small community-based literacy groups in supporting the work they do to provide tutoring and training opportunities in the province.

J. Kwan: The minister says she is proud that the government has doubled the funding in the literacy funding initiative to $1.4 million. It's true. It's good that the government has provided the dollars in this area, but on the other side of the coin, the government has also put a lot of pressure on the adult basic education initiative. That kind of counterpressure, in my view, doesn't make sense.

If the government is serious about literacy and trying to address the issue around literacy across British

Columbia, then we need to look at it from a comprehensive point of view and across governments in terms of strategically funding these kinds of initiatives. Yet the ABE program has been under tremendous constraints in terms of funding pressures under this government's administration. In fact, when we were doing estimates debate with the Minister of Education in the K-to-12 sector, I asked a question in terms of the literacy initiatives from that ministry and whether or not there are specific targeted dollars for children in the K-to-12 sector in that area. The minister replied they have no funding, at least at this time, with respect to that.

The other issue that has been highlighted in the estimates debate in the K-to-12 sector is this. We have study upon study that says the library services within schools and teacher-librarians actually do make a difference in student outcomes and their achievement outcomes, particularly in the area of literacy and numeracy.

In spite of that, we see a situation in the K-to-12 system where the ratio of students to teacher-librarians has actually increased significantly from 400 to 700. That's one per 700 students. In fact, a report came out that talked about a crisis situation in the library system in the schools, so the counterpressure, if you will, of the government's approach to literacy is baffling. On the one hand, the government says it wants to address literacy, but on the other hand, you see programs that are suffering within the government's system.

Therefore, if we really want to address literacy, it leaves one wondering why that kind of situation exists within the government — why those counterpressuring points exist to perhaps offset the good work that's being done in one sector and then offset by another sector where funding pressures exist to potentially eliminate the gains one could receive from different programs across government.

I just want to bring that to the minister's attention. Now, is it the case, as far as I understand it, that the Premier is establishing some sort of committee on literacy? I don't think that committee has been put in place yet — a committee or task force, whatever the term was that was used in the throne speech. Is the Minister of Advanced Education involved in that? Presumably, the minister will…. I shouldn't presume. Will the Minister of Advanced Education be on this task force?

Hon. S. Bond: While the actual committee — I don't know the name of it, task force, committee, whatever it is — has not been announced, certainly our ministry will be one of several that will be working on the literacy initiative. It's important to all of us and certainly my ministry, and because of the initiatives we have here, it's a key foundation to the pieces that we're doing.

I should also point out that at the recent meeting of Ministers of Education across Canada, literacy was one of the issues that we brought to the table, knowing how important it was to British Columbia, and that it was an initiative also being considered by the first ministers as well. We think it's incredibly timely and very appropriate that B.C. take the lead in the issue of literacy across the country, and that's what we intend to do.

J. Kwan: I would say this to the minister as well, given her involvement in this area, that it's counterproductive for government to be saying they are targeting literacy issues in British Columbia, on the one hand, and then increasing the funding; but then on the other hand, in another ministry, reducing the funding or seeing pressures mount that would impact literacy and the advancement of the successes that one is trying to achieve.

Given that that is the situation before us, if we keep going down this road, really the successes that you might be able to gain through this ministry's work are going to be offset by the pressures and the budget reductions in another ministry. At the end of the day, the net result may well be a zero gain, and worse yet, it could actually set us back in trying to advance in the area of literacy. I want to bring that to the minister's attention in her work with the government with respect to this.

Is the $1.4 million in the literacy initiative targeted towards what the government had highlighted in the throne speech, or are there going to be additional dollars towards the throne speech commitment on addressing literacy?

Hon. S. Bond: The $1.4 million is out of our budget and will deal with the issues that we have around the adult literacy cost-shared program. It's my understanding there will be additional dollars attached to the literacy agenda, but that's obviously a bigger agenda than mine.

J. Kwan: Then the expectation is that there will be additional dollars to this new initiative that the government talked about in its throne speech. The Ministry of Advanced Education would not be expected to take money out of its existing budget towards the initiative that was announced in the throne speech.

J. Kwan: Could the minister update me on the status on the ABE program, please?

Hon. S. Bond: Certainly. Adult basic education is part of a package of programs we call developmental programs. That's really our generic name. We have a cluster that includes adult basic education, English as a second language and adult special education. Those courses are delivered in 19 of our post-secondary education institutions. Since I've been the minister, we have included in our budget letters a highlight that

adult basic education is a priority for us and that it should be reflected in programming at institutions.

We have recently added to our service plan the indication and the intent that we will include targets in terms of adult basic education, English as a second language and adult special education. What we're currently doing is developing the baseline data that's necessary so that we can measure how institutions are doing in terms of targets that are set for them. At this point in time we have indicated to institutions an individual target in terms of the number of seats that are offered at their institutions.

We're in the process of developing baseline data. Of course, that takes a bit of time. We're looking at '03-04 data, and we'll be putting those into targets in the future. The intent would then be to look at increasing those numbers, but first we have to develop the baseline data. The key point is that we continue to make it a priority, and we have set targets in the institutions' budget letters around their numbers.

J. Kwan: Let's begin by getting some comparisons, then, in terms of how we're doing, if it's government's priority. For the budget years 1999-2000, 2000-01, 2001-02 and then '02-03 and '03-04, etc. — to date — what were the budgets for those respective years for adult basic education?

Hon. S. Bond: We don't have the budget numbers for the past number of years with us. One thing I can say is that we are continuing to include targets in institutional letters. The goal of our service plan is to create baseline data. The subsequent output would see us maintain or increase those numbers as the years move forward. We don't have those budget numbers from 1999 with us.

J. Kwan: I'm sure the minister can get that information. Not for today, but if the minister could get that information and submit it to the opposition, I would appreciate that.

The reason why I actually want to see the information year over year is to see, first of all on the funding side, where things are at — has it improved; has it stayed the same; has it decreased? — what the situation is. That's one thing.

I think, actually, that the ABE pressures…. As I've mentioned, I know some institutions had to reduce the number of seats because of funding pressures within their system. We know there are ramifications, but to what extent the ramifications are across the province I do not know, and I would like to receive that information from the minister.

In addition to the funding question, the other side of it, of course, is enrolment in terms of how many students actually got access to the ABE programs throughout the course of the respective years. I suspect the minister doesn't have that information right now — over the years. If she does, I would be happy to receive it. If she doesn't, if she could commit to providing that to the opposition as well.

Hon. S. Bond: We obviously have included, across the system, block funding. While we don't target dollars specifically, what we have done, because of the importance of ABE, is actually included targets for those particular programs. We will work to get the information the member opposite has requested, and Tom has added that to his list for me.

We have made progress in terms of the process here. I will read one paragraph that demonstrates…. It's from a faculty association. It says: "We also appreciate the inclusion of developmental programs in the group of new-era program-specific production targets. We joined many others in advocating for such targets and wish they had been in place two years ago."

I think we have made progress. Those targets are now included, and while the money is sent as block funding…. Schools and institutions have to respond to student demand and need, and the demand in some areas is sometimes greater than they would have anticipated, but it's also lower in some places. Block funding gives them some flexibility, but we also, for the first time, now have targets around developmental programs.

J. Kwan: I should say that the information I'm seeking from the minister would be, in addition to enrolment, the number of spaces offered — in addition to the funding question. Obviously, enrolment is one thing, but how many spaces are available is another thing. The third thing I should add to that would be wait-lists — whether or not there are wait-lists across the province in the different institutions.

The issue I know institutions are faced with is because funding for post-secondary institutions is inadequate, many of them actually had to cut significant programs. I know ABE has been one that has been impacted for some institutions, not necessarily because the institution wanted to do that but because of funding pressures. They simply did not have enough moneys from government to provide for the programming that is required, so they had to make tough decisions as a result of that. I don't necessarily blame the institutions for those decisions; rather, the issue rests with whether or not there was adequate funding from the provincial government to begin with for them to deliver these programs.

That information would be useful and helpful in trying to have a better understanding of what it looks like out there with respect to adult basic education initiatives, to tie that into the government's commitment with respect to literacy.

The baseline data the minister is talking about. Could she please elaborate on what she means with respect to this baseline data? What information is she trying to gather with the baseline data?

Hon. S. Bond: We're going to establish the baseline based on the actual FTEs that are reported for 2003 and 2004. That baseline can't be finalized until the audited FTEs arrive and are available to us — that information.

That won't happen until after May 15, 2004. Within a number of weeks we'll have the audited numbers. The 2004 and 2005 budget letters — we call them budget and accountability letters — set individual institutional FTE targets for the developmental programs for those institutions that offer programs.

We should say that we work really hard with institutions to make sure the numbers we're looking at are within their capacity. We want them to be successful and meet student needs. The targets are overall targets for developmental programs. We haven't set specific targets for adult basic education, English as a second language and adult special education. We haven't broken those down. It's an overall target so that institutions can look at the needs of their students.

What we did when we developed those targets for their letters was take into account the number of developmental programs FTEs that were delivered by the institution for the past three years, the percentage of programming devoted to developmental programs compared to similar institutions, the location — we looked at whether you're rural or urban — and other factors. Those were provided to institutions in January. Actually, it wasn't quite January; it was within the last number of weeks. In essence, we're trying to determine how many they've done over the last three years, where they are and what the needs are. Once we have the audited numbers, our baseline — we had to have credible data — will start in our next service plan.

J. Kwan: I should just clarify one thing. In the information that I was seeking from the minister, I talked about ABE, adult basic education. In that I should include ESL, English as a second language and also adult special needs education — the whole program in terms of the ramifications towards literacy in this sector.

When can the minister expect the baseline data that they are trying to put together would actually be available?

Hon. S. Bond: We'll receive the data sometime after May 15. We'll be working on it, obviously, through June and the summer as we put the baseline data together. It is being created in order to put it into our next service plan.

J. Kwan: The targets that the ministry is trying to set in this area — when will the minister finalize those targets?

Hon. S. Bond: The targets for this year we've already determined. That was done after a process of discussion and dialogue with institutions. As I said, we want to make sure they're successful and have the capacity to deliver the programs. Having said that, the key point is that they are going to maintain or increase their numbers. That's the principle of using a baseline.

The targets were given to them in March. That's why I wanted to correct what I said. I read January. They actually got their budget and accountability letters in March of 2004. In essence, those were general guidelines for the institutions. Targets were included. I've been assured by my staff that those numbers…. Although there's been a lot of discussion, we would still have the opportunity to see some flexibility, but the general principle is to maintain or increase their numbers.

J. Kwan: Why did the minister pick the year '03— I think the minister said — as the target year, as a baseline year for measurement? I would say that's not necessarily a good year. Maybe it's a good year from the point of view that the government's trying to lowball the targets. We know that the cuts already impacted the community in the '03 year. One might actually want to use a better baseline in terms of setting better targets in achieving the goal of addressing literacy.

Hon. S. Bond: Certainly, I just want to say on the record that we're not interested in lowballing. The year we chose was the most recent one. That's a fairly typical practice, because as you're building a baseline, that's where you start.

I do want to point out and reiterate the fact that when we looked at the development of targets for each of the institutions, we went back three years in terms of developing their individual targets. Once we get the audited numbers that will come in, we will have a look at those. We will look at the three-year history, and there's still an opportunity to actually adjust those as necessary.

Our goal is to increase opportunities for students in those areas. We were very clear that we would go back and look at the historic pattern of enrolment in that package of programs. We did go back three years, but the year chosen was the most recent.

Again, our goal is absolutely to increase programming and developmental programs. We've received a number of really positive comments about the fact that we are including targets. It indicates our commitment and the priority that we see. We needed to start a baseline somewhere, but again, for individual targets, we've gone back three years.

J. Kwan: I'd be interested in receiving the information from the minister, because then it'll give you a sense of the targets and whether or not those targets that the minister set for the institutions are at the high end or low end. When I receive that information, I'll be able to make that determination as well.

The reason why, as a general sort of statement in terms of lowballing, is that we know, as I said, that the budget impacts have been greatest in the '03 year, I think, since the government took office. We know that the enrolment impact has been significant in the institutions that I've spoken with because of these budget constraints. If there's an opportunity for the government to not necessarily use the lowest year in terms of target setting, that would be good. If the real interest here is to actually achieve the goal of addressing literacy, then I would expect and I would hope that the

targets would be set higher rather than lower so that we can actually move towards greater success rather than reduced success. I'll await the information from the minister with respect to that on this front.

In terms of setting targets it's one thing to say to institutions that we expect you to achieve this, this and that. What measures are in place to ensure that these targets are achieved by institutions? In other words, what monitoring process would the ministry be putting in place to ensure that these targets are met? What ramifications are there, if any, if the targets are actually not met?

Hon. S. Bond: Certainly, the process we use in coming up with the targets is a lengthy one. It's very thoughtful, and it's very carefully done. My staff meets regularly, and one of the things I asked them to do over the last couple of years was to reinstitute regular meetings with institutions individually as we prepare their budget and accountability letters.

For me the most important thing is that institutions really want to do what's best for their students, so we try to create realistic expectations within the plans they have. We also, though, look at interim FTE reports. We don't leave it to the end, and then — surprise — they didn't meet the targets. We work through a process where, on an interim basis, we look at those numbers. At that point, if there are challenges or if the numbers are a challenge, our staff works with an institution to deal with that. We're trying to find a fine balance. We want to be realistic, but we also want to challenge institutions to make sure they're pushing as much as possible to include as many seats as we possibly can, because we need them.

On the other hand, the other thing we need to remember is that there's always attrition. Sometimes there are cyclical drops in attendance and all kinds of things. There are a number of factors. We're trying to have a system that, while it's flexible, also sets out a very rigorous set of expectations, but they also have to be realistic. We want institutions to be successful.

We work hard at creating those letters, and we've been extremely successful. Institutions, for the most part, have done an incredibly good job of meeting the needs of students and actually meeting their targets.

J. Kwan: The issue is actually, as I mentioned, not with the institutions. The institutions absolutely try to do the best that they can, given the circumstances. The issue rests with the lack of funding from the provincial government. I know institutions have to reduce…. Some of them had to reduce the spaces for adult basic education because they didn't have the funding, as an example. I know institutions had to cancel programs for special needs adult education. Why? Because economically they couldn't make it work, given the funding pressure they face as a result of the provincial government's funding.

It's not the institutions that are at issue here. The issue is about whether or not they have the resources or the tools, if you will, to do the job that is required of them. I don't doubt that staff within the ministry are trying to do the best they can in trying to set out realistic targets. The issue again rests with the government in terms of how much meat they're going to put on the plate with respect to their notion of trying to address literacy and how serious they are towards that goal.

In the previous administration, by way of an example, under the NDP, when they wanted to address the issue around literacy, the previous administration actually made adult basic education free for students, so they could actually have maximum access towards that. In that light, putting the meat on the plate, if you will, in trying to attain the goal is a forceful one with respect to that, and that was actually very much welcome in the community in trying to address literacy. That is the issue I'm trying to focus on here with the minister with respect to government's commitment and where that commitment really lies with respect to funding.

I didn't really get a clear answer from the minister in terms of what those targets would be, and I didn't get really quite a clear answer from the minister as to what kind of monitoring process would be in place for ensuring that the institutions actually meet those targets.

The other piece I'm wondering about with respect to this on literacy is the issue around funding to institutions. Because the funding goes to institutions by way of a block-funding kind of thing, would the funding in terms of the question also be targeted from the government to institutions?

Hon. S. Bond: No, funding is not targeted. Having said that, we have expectations around seat production. In essence, we don't put in a line that says this much goes to that, but we do say, for example, that BCIT needs to have 309 seats in terms of the developmental program package. We do have a breakdown of the FTE expectations around that.

In terms of funding, though, it's important to point out and clarify the fact that in the 2003-04 budget and service plan, institutions in this province actually anticipated a $22 million reduction in budgets in the subvote for 2004-05. The good news is that we've actually been able to restore that funding, and we added $18.5 million to the subvote.

Institutions were expecting a drop in funding — fairly significant, about 3 percent, I think. What they actually got this year was at least the same amount of operating funding or more in most institutions' cases. We've worked extraordinarily hard to mitigate a drop that institutions were expecting.

In answer to the question about targets, we've set them realistically. We've looked back historically. We want institutions to be successful. For the most part, as I pointed out, part of what happens is that with auton-

omy comes accountability. That's why we have an accountability contract. My staff's job is to monitor with institutions their progress toward their targets, and our institutions have done a great job. The additional dollars will definitely see an increase in services and seats to students this year.

J. Kwan: As I said, we will await the minister's information on the year-by-year comparison to see how the government is actually doing with respect to that in terms of funding it.

We know that the targets set by the government will be based on the '03 year. Whether or not that is a good year to pick in terms of setting targets is one thing. The other thing is that the funding would not actually be targeted towards these goals. Whether or not that would actually materialize the number of spaces to meet the demand in the community is another question. Again, the opposition, once we receive information, will judge for itself and determine how the government is doing in that regard.

On the issue around literacy and its goal in trying to achieve literacy, the government actually sets out very ambitious goals in the throne speech. In fact, it talks about wanting to be number one in North America with respect to that. The minister anticipates that there will be additional funding for the literacy program and that the ministry's funding now is not expected to be diverted to the Premier's announcement in the throne speech for the literacy initiative.

In terms of the target of being number one in North America in addressing the issue around literacy, there is a clear target that's been set by the Premier and the provincial government. Is the ministry undertaking work to see how the province could actually meet the goal that has been set out by the Premier? If so, what work is the ministry doing towards this initiative?

Hon. S. Bond: Certainly, literacy is absolutely critical to all of us, and I think being the leader in North America is fantastic. In the same way, when the Premier had a vision that if you work hard and get a B, you should get into an institution, we are going to deliver that by 2009-10 by adding 25,000 seats.

Our ministry is part of an interministry working group to create the beginnings of how we move that initiative forward on behalf of the Premier's vision for British Columbia. We're part of that interministry working group, and we will obviously be looking at the kinds of things necessary to put British Columbia in that position. I know that all the details will be announced in the near future related to the bigger initiatives that will be unrolled around our literacy project.

J. Kwan: Rhetoric doesn't cut it, and that's what the minister just gave me as an answer to my question. I'm talking about what real work the ministry is doing in trying to move toward this goal. The answer the minister just gave gives no indication whatsoever in terms of what real work is being undertaken. Maybe that work hasn't started yet. The throne speech was delivered in February, and it's now April.

Maybe the government hasn't really quite turned its mind to it, given all the crises it has been faced with over the last number of months, and hasn't quite sat down to say: "Okay, how are we really going to achieve this goal?" Maybe that's the reality. Work is underway, and nothing concrete has actually surfaced yet. If that's the answer, I can accept that. As I mentioned, I understand the minister and the government have been in crisis mode since the House has been called back, with the raid in the Legislature, and so on and so forth.

I can appreciate that. That's the situation the government is faced with, but I'm looking for concrete information here from the minister in terms of what real work is undertaken and what direction the minister has received from the Premier to address the target set in the throne speech — bringing British Columbia to be number one in terms of addressing the issue around literacy.

Hon. S. Bond: We've actually been busy doing our job. We've been busy working with the people of British Columbia to announce an incredible program to increase access in the province. Having said that, at the same time we have been working on our portion of the literacy agenda, which is the adult literacy cost-shared program. In addition, ministries are working together with an interministry working group to be able to begin to put together the pieces of a strategy that will see British Columbia become a leader.

It's not rhetoric; it's actually fact. It takes time for us to make sure we're going to get this right. That's important, and my staff are working extremely hard right now to focus on the piece we are responsible for, which is the adult literacy cost-shared program. We will continue to be an active working member of the interministry group that's putting together the bigger initiative.

J. Kwan: As the minister just admitted, the adult literacy cost-shared program and the funding that's come in — the $1.4 million for the literacy initiative within the ministry — has nothing to do with the Premier's target, with that initiative. The minister put that on record moments ago. Yes, the minister is carrying on doing that work, but that has nothing to do with the throne speech initiative, and the minister admitted that moments ago.

This cross-ministry committee task force, or whatever the minister or the government calls it…. According to the Minister of Education in the K-to-12 sector, we know that the task force is not even put together. We know that that Minister of Education hasn't really received any direction from the government in terms of what they're supposed to do in trying to address the literacy initiative, other than they're just trying to do their own thing within the K-to-12 sector.

The Minister of Education also stated that he hadn't received any additional dollars towards the literacy initiative that's been outlined in the throne speech, as

has been confirmed by this Minister of Advanced Education as well. So it seems to me that while all the ministers are saying yes, there's some sort of cross-ministry, cross-government approach to this, nobody really has anything concrete in terms of trying to address the target that's been set out by the government.

The only thing that's going on right now, it appears to me, is the ongoing day-to-day work within the ministries in their own respective areas. It sounds like to me that's what's really going on, Mr. Chair. There is nothing specific that has been established towards trying to address the government's, the Premier's, throne speech commitment on literacy.

So that's the literacy component. Now in the course of these estimates debates the minister actually did say, though, that for the institutions, the budget letters were sent out to the institutions in March 2004. I canvassed this question earlier, at the beginning of the estimates, with the minister about the fact that the government still hadn't posted the institutions' budgets for the post-secondary institutions on their website. The minister said that's because those budgets are not finalized, but yet the minister just moments ago — today, this afternoon — said she had sent out these letters to the institutions in March 2004.

Since the morning's estimates debate it has come to our attention in terms of this question…. The issue is not that the budget letters are not out or finalized; the issue is actually that the government is waiting for the MLAs to get in contact with their institutions so that they can do some sort of media blitz on these budget letters. That's the real reason for the delay in posting the letters on the website as opposed to the letters not being ready.

I would like to actually canvass that with the minister once again. The budget letters. She said they have been sent out to the institutions in March 2004. Given that they've been sent out already, then the letters, obviously, are ready. Why not post that information so all members of the House can have access to that information now?

Hon. S. Bond: First of all, let me clarify. The question I was asked this morning was about the allocation of 25,000 seats in British Columbia. That's the question in which I said that all of the details, in terms of specifics around how we manage those circumstances, have not been finalized in terms of how those seats would be allocated between campuses. We're working on those. When we talk about numbers, we're adding 25,000 seats — the most significant growth that's occurred in the province in literally decades.

Budget letters and accountability letters were final. The issue was: how do we deal with the capital implications, for example, of adding 25,000 seats? At a particular institution, where would we be allocating those seats? Institutions wanted to create — and so do we want to ensure that we have — thoughtful and careful plans around how we make those allocations.

If there was either a question about my answer or perhaps the question, the issue we were debating at the time was the allocation of 25,000 seats. My answer: those numbers and targets around the growth are included in budget and accountability letters.

J. Kwan: I just picked up Hansard Blues with this morning's debate. The question put to the minister was: "The government still has not posted the institutional budgets for post-secondary education institutions on the website. Usually by this time the government would have already done that, but it appears not to be on the website. Why have these letters not been posted, and when can we expect them?" That was the question to the minister. The minister said:

The question put to the minister was actually about the budget letters, and the minister actually said, yeah, we normally have them posted already, but it is taking a couple of weeks for that to…. It is going to take another couple of weeks for that to be posted now.

The question that I put to the minister wasn't about the number of seats; the question I put was clearly identified as the issue around the budget letters. Maybe there was a misunderstanding in terms of what I was talking about to the minister. So the question now to the minister is about the institutional budgets, which I know the institutions have received already, and the minister had just said that they received them in March 2004. These letters that were sent to the institutions were normally posted by this time. So I want to put the question to the minister: why aren't these letters posted now? Why don't you post the letters now or table them in this House?

Hon. S. Bond: First of all, my answer to the question would be the same this afternoon as it was this morning. The issue is that budget and accountability letters are based on seat allocations. We're in the process of adding, as I've suggested, 25,000 seats to the system. In fact, what we're going to do is, as soon as we have worked through the allocation in terms of the seat numbers…. When we make those numbers public, the information will be posted on the website. I absolutely said the member opposite was correct; they're not there now. They will be up there as quickly as possible. But when we look at budgets, we also look at seat allocations, and we are in the process of dealing with the allocation of our 25,000 seats.

J. Kwan: If the issue is about the 25,000 seats, and the minister has already sent the institutions their budget letters, why not post that information? Once the numbers on the seats are received and finalized, post that information as well. There is nothing that stops the minister in doing this as a two-step approach to put-

ting the information out to the public and letting the public access this information now.

Hon. S. Bond: We continue to work collaboratively with institutions. When one assigns a budget, that implies and states seat growth, so we are working collaboratively with our institutions.

There are significant capital implications. You know what? This is a great-news story for British Columbia — 25,000 new seats. Institutions have received budgets, and they got more dollars than they were anticipating. In fact, we added an extra $18.5 million to their budgets. It's a great-news story. I have made a commitment to the member opposite that we are going to post those letters just as soon as we're able to. This is a great-news story, and I'm surprised that there would be a reaction about something like this.

J. Kwan: The reaction actually came from the institutions. Some of them contacted us after this morning's estimates debate, and they actually said that….

J. Kwan: Excuse me to the minister over there who's accusing members — accusing me, Mr. Chair — of actually making up information. From this estimates debate this morning we have received contact from people from the institutions who actually said they have the information that the minister is saying is in draft form, and that the issue with respect to posting the information is with the MLAs so that the MLAs will get an opportunity to go and do their little media hit somehow, trying to get news — good news — anywhere in this province, given the crisis that this province and this government are faced with today.

That is the reason for the delay. Under normal circumstances, were it allegations of a member accusing another member of providing misinformation in this House, it would be called out of order from that minister over there, and he would be forced to apologize. Different rules, of course, for different members.

That's the information the opposition has received, and that's why I brought up the matter again. The minister herself in this estimates debate actually said and confirmed that the budget letters had been sent out to institutions in March. It is now late April, almost the end of April — April 27. More than a month has passed since. Why the budget letters are not posted raises questions, and as I said, institutions themselves have raised the issue. There is nothing that precludes the minister from actually posting the budget letters now and then supplementing that information later on when there's full information with respect to the seat allocations — nothing that precludes the government from doing that, nothing that precludes this minister from doing that.

The rationale that the minister has provided, quite frankly, doesn't wash, especially in light of the fact that some institutions, as I said, have contacted us and provided us different information than that which the minister has said in this House.

The good news that the minister liked to talk about, about the 25,000 seats…. We established earlier this morning that those 25,000 seats don't help the students that need to access post-secondary education today. We have also established that given the government's budget figures, which they have reviewed in their budget books. In fact, again, people who are experts in the field…. As an example, the Confederation of University Faculty Associations themselves have said that based on the government's numbers and the projections that they put forward, in fact, the number of seats are only funded by 56 percent and not the full amount. Therefore, there is significant shortfall with respect to these 25,000 new spaces in terms of funding it fully and adequately.

The new comprehensive strategy the minister talks about. She talked about the literacy component of it, she talked about the first nations component of it, and she talked about how the government is trying to address these matters within her ministry. Now, on the question around access…. Access, the minister said, means increased opportunity. With the new comprehensive strategy that the government's working on — the access to advanced education for low-income individuals as one group, if you will, which one would think the government would focus its attention on in addition to the first nations community — what programs are in place? What work is the government doing to ensure that low-income individuals would have access to post-secondary education, especially in light of the situation that students are faced with now with skyrocketing tuition fees?

Hon. S. Bond: Okay. First of all, I want to clarify something, because I have not at all today suggested that budget or accountability letters are in draft. They are final; they have gone to institutions. I have made a commitment to publicly put those letters on the website as quickly as we're able to do that. In addition, I would be happy to contact the individuals that contacted the member opposite today to discuss with them any concerns they might have about budget and accountability letters. In fact, the majority of institutions and people in them are absolutely delighted that we're adding the kinds of seats we are around the province.

In terms of students who have challenges, and in particular students that come from low-income families or low-income circumstances, we have a number of programs. Obviously, the first and foremost is our student loan program. We have interest relief and debt reduction programs. We have the adult basic education student assistance program. We have an assistance program for students with permanent disabilities. We

have a student society emergency aid fund. We have a youth education assistance fund.

Then we administer on behalf of the federal government a significant number of programs, including the Canada study grant for female doctoral students, the Canada study grant for high-need part-time students, the part-time student loan program, the Canada study grant for students with dependants, the Canada study grant for high-need students with permanent disabilities and the Canada study grant for students with permanent disabilities — a second fund. We have also created loan forgiveness programs for health care professionals in the province.

J. Kwan: The contacts that provided us with the information and the concerns that they have would not, I'm sure, want the minister contacting them. Why? Because, in fact, the community — not just in this sector but across government, I should say — is very worried about the repercussions of this government in terms of actions that they take against them. They have actually said that much in terms of their concerns with this government's approach to things.

In fact, we had established that in the Ministry of Children and Family Development, where the minister liked to say that the community groups have voluntarily cut their budgets. In reality, the community groups, through those sets of estimates, have come back and said no, they didn't voluntarily cut their budgets. They were basically threatened that if they didn't cut their budgets, they would actually lose their programs.

J. Kwan: No, this is not paraphrasing, Mr. Chair. That is factual information from societies that came forward and said…. In fact, one deputy, who is now no longer with the government, phoned up board members to put pressure on them to come forward with these so-called voluntary cuts. It's on the record. The societies were faced with this kind of pressure from this government, so I wouldn't even dream of putting our source in jeopardy because of the tactics that have been employed by this government.

The minister said the government is providing a variety of supports to low-income students to ensure that they have access to and the opportunity for advanced education. Now, in the 2004 budget speech, the government announced that they would be "refocusing…funds from the current student grant program." The grant program was a $29 million program. The government has said that the grant program will be replaced with expanded access to student loans, loan remissions and completion grants, but it has not stated how or when this will happen. This, of course, has caused a huge amount of anxiety for students, particularly students and families who are low-income.

The abolition of the student grant program has caused the students a great deal of concern. In fact, University of Victoria president David Turpin has had students phoning him in tears, telling him they will no longer be able to afford to go to school. He had told them to hold on and wait for the details of the promised loan remission and post-degree grant programs, which was actually in an article that was put out with the minister's comments in relation to that. Can the minister, then, put students' anxiety to rest and explain just what the promised loan remissions and post-degree grant programs will look like?

Hon. S. Bond: Certainly, the decision to deal with the grant revision…. That's what we did; we turned grants into loans. We revised the program. We moved it from a grant program to a loan program.

Students still have access to the same number of dollars. They are not grants; they are loans. We recognize that is challenging for a number of students. Having said that, the decision wasn't made lightly. What it allowed us to do was take the savings that were generated, because we had moved it from a grant program to a loan program, and provide additional benefits to the entire post-secondary education system.

In fact, what we have found is that our ability to do that created the opportunity to mitigate increases in tuition. We're happy to read into the record the tuition increases that have been approved in many institutions. In some cases, actually, the institutions will not be increasing tuition at all this year, including Vancouver Community College and a number of others.

In the meantime, I have asked my staff to work as quickly as possible to begin to look at a completion grant that would take place at the end of a student's career rather than at the beginning. That work is ongoing as we speak. Our goal is absolutely to work to have something in place for the '04-05 school year — again, likely in the form of a remission for those who have been most affected by the grant elimination. We want to be very clear here. As we looked at how to benefit a majority of students across the province, we said clearly we were going to replace it with something else. There have been significant consultations going on.

Just a very short list in terms of the students that have been…. As we look at a new model, we wanted to be sure to be inclusive in our discussions. Let me give you just a few of the organizations that we have met with: the Canadian Federation of Students; CASA, which is another student organization; student societies at institutions that are not represented by either the CFS or CASA. We have met with financial assistance officers at institutions. We've met with the Canada Millennium Scholarship organization. We are working very hard to design a model that, we also need to point out, will bring British Columbia into line with the rest of Canada. In fact, most of the provinces do a grant remission at the back end of a student's program.

J. Kwan: The tuition question. I'll get to the tuition fee debate in the course of these estimates, but let me just be clear in terms of what it looks like right now under this government's administration. Since 2001,

since this government came to office, B.C. university tuition has increased by 70 percent and college tuition by 150 percent. This is just some general information on what things look like since this government took office. As I mentioned, I'll have a lot more to say about tuition fees when we get to that section of the estimates debate.

Now, the minister says that the grant programs have been eliminated because the government's provided those dollars into loan programs. I might say loans and grants are significantly different and therefore have very different ramifications for students who access loans versus grants. For low-income families and low-income students, a loan versus a grant is, well, night and day in terms of that difference.

It is interesting to note that the minister is saying she is working very hard in putting forward the details on the loan remission program and the post-degree grant programs. In an article in the Martlet that was printed March 11, 2004, one UVic student reporter stated that after 17 phone calls, 12 e-mails, four faxes, three assistants and two offices, the minister has still not gotten back to the individual to comment on the promised student loan remission and post-degree grant programs. In fact, in the article it goes on to say that the individual was referred to the minister's communications director, Karen McDonald, the same assistant who told her that she could not officially comment two weeks earlier when the individual sent her a list of questions about the promised programs and who refused to return numerous calls and e-mails.

The article goes on to say: "What McDonald did know, however, was that no solid plans for the student loan remission and post-degree grant programs were in the works. According to McDonald, B.C.'s student loan remission and post-degree grant programs will not be in place this year, and no details on who will be consulted in the making of the programs have been set." That was as of March 11, 2004.

We know that since the throne speech announcement and the budget document came out in February — the cancellation of the $29 million student grant program, where the government said there would be a replacement for this — there has been nothing. It has been confirmed by the minister's own communications person that nothing is in the works for the loan and remission program. That certainly is current as of March 11, 2004.

The minister now says that she has consulted an array of different people, including the federation of students, financial assistance officers, and so on and so forth. When did this consultation take place?

Hon. S. Bond: We'd be happy to look back and find the dates, but let me make one thing perfectly clear. What's relevant and what's current is what I simply just said two minutes ago in the House. We are working on having a grant program, and anyone who I have spoken to…. I have been perfectly clear on the record that we are working to have no gap in provisions, so our goal is to have something in place for the '04-05 school year. It will likely be a form of remission for those students most affected by the grant elimination. We are consulting with a broad number of groups. Actually, it's great. We've met with a number of student organizations who certainly have made their views known about how that should be shaped and, obviously, expressed a number of views to us.

In fact, the current information is what I suggested in the House two or three minutes ago. There is a program, a development process, underway. That does not happen overnight. We want to make sure we get this right for the students of British Columbia. I would suggest the consultations have taken place over the last number of weeks. I don't have the specifics. Certainly, we have a person assigned to working on that.

That's the current information, and we think students should take some sense of optimism from the fact that we have made a commitment to get the program up and running. My goal is to have no gap in the provision of those services.

J. Kwan: The minister said the consultation took place in the last several weeks. What is for certain, then, is that after March 11, it seems to me, since the article has been written…. Then what that proves, if in fact that's the case — and I suspect that is the case — is that the students and the community are putting the right kind of pressure on the government to get action from the government.

I would like to get those dates from the minister to see exactly when those consultations actually took place, because the government, I think, wasn't going to do anything about it until the community stood up and said: "You know, this is just unacceptable. It is another slap in the face of students, and particularly low-income students, who needed the grants for them to have access to post-secondary education opportunities."

The government on the one hand says it's doing a great job in trying to advance access and choice for students in the post-secondary education sector, but in reality the government is putting up more barriers for students, particularly in low-income families, in terms of barriers to access because of increased cost in tuition fees and increased cost for families to try and access post-secondary education.

The article by the individual, I think, outlines it very clearly in terms of where things were at as of March 11. Now the minister says: "Well, that's not current anymore. That's not relevant." I, for one, like to thank the individuals who worked hard to put the pressure on the government with respect to this, but let's see where things are at exactly with respect to the consultation, first of all, on this — aside from the date issue, which the minister said she will provide to me. I would be happy to receive that information. I'll look forward to receiving that information on the dates when the consultations took place.

With respect to the consultations themselves with the various different groups, what information did the

minister receive from these groups that she consulted with? What did they tell her? Will the minister, aside from providing that information in the House, actually commit to providing the information that she received through the consultation process for the public's consumption?

Hon. S. Bond: Certainly, I want to go back. I will double-check this, but I'm quite confident that in his comments in the budget speech, the Minister of Finance made reference to the fact that we were going to be looking at a remission program. To suggest that an article written created pressure….

It was our intention from the beginning of this process…. We said clearly we wanted to bring the program in line with other provinces across Canada, which is what we're going to do. Our commitment from the beginning of this process has been to look at a new model of remission or completion grants. That was clear. I will go back and check to see, because I would hate to be mistaken about that, but I'm confident that the Finance minister made those comments as he had the discussion about this.

Having said that, we're working hard to be inclusive. I have not received a report from the people who are working on putting the information together. What I expect is that the staff will be inclusive in terms of who they speak to, and I would hope to see a range of options provided to me as we look at what the best model will be for students in British Columbia.

I'm not going to make the decision overnight. It's going to be based on the information that's been gathered. I haven't received that on my desk. I don't have an anticipated date a week or two from now.

We want to get this right for students. We actually care about students in this province. To suggest that we're talking about an access agenda, and we're building barriers…. We are making significant inroads into allowing and providing additional seats for students in this province. We're developing a new program to assist those students, and we will continue to offer student loans and a list of all of the other sources of support to students.

I also want to put on the record the fact that the institutions in this province have done an incredible job of providing additional supports to students through bursaries and scholarships, through institutions in the province. They've done a fantastic job of doing that, so we're doing that in partnership. Our goal is to support students, and we're going to continue to do that.

J. Kwan: Let me just put on record again what the article said, because I think the minister misheard me. This article of March 11, 2004, the Martlet article, is entitled "In search of Bond: Promised grant replacement programs a cruel joke." It's a fairly lengthy article, so I won't read the entire article and put that on the record, but I'll just read some pertinent parts of it.

The article is dated March 11, 2004. It goes on to talk about the government's cuts in programs, and so on and so forth, and I won't put the entire article on record.

The minister says that this information is not relevant. Of course it is relevant. A student reporter writing for the University of Victoria's student paper tried to contact the minister for the information on this magical replacement program for post-degree grant programs and student loan remission which was supposed to exist. In fact, they couldn't. The individual couldn't find the minister, had no returned phone calls — in spite of numerous attempts, not just through the phone but through e-mail, through faxes and talking to assistant after assistant. The minister's own communications person confirmed there's been nothing in the works.

Let's be clear in terms of where that is at. The minister can say, well, they're doing their consultation now. It was after the fact. Let's be clear. It was after the fact, and I look forward to receiving the dates from the minister on exactly when those consultations began.

Mr. Chair, I have a lot more questions for the minister in this area and also in other areas relating to the Advanced Education ministry, but noting the time….

Hon. S. Bond: I just want to clarify a couple of things. First of all, the biggest cost that we have when we look at post-secondary education is actually not being able to get a seat. This government is going to add 25,000 seats, and that makes a huge difference.

Secondly, when you look at the principle of adding seats closer to home, where people actually live, students can save up to $6,000 a year if we put seats closer to where they live. That's a great thing.

I do want to clarify the record because it's really important to me. When we made the difficult decision about the grant program, we were concerned about that, so I want to point out to the member opposite that in the budget speech of 2004 — and I'm sure my colleagues could help me with the date — we made public then the commitment. Here it is in print. "We are also looking at new assistance programs such as loan remis-

sions and completion grants to reward those students who work hard and complete their programs of study." In fact, the Finance minister, in his comments when we made the challenging decision, actually put on the record that in fact something is in the works. We are working hard, and to clarify the member's concerns, the consultation did take place in April. From that perspective, the point is that the Finance minister made that commitment on budget day.

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

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

J. MacPhail: I'm going to carry on from the scrum outside. It is interesting how the minister goes right back into his message box when he's in the scrum and when he's in the Legislature. It's a bit troubling, I must say. So I'm going to continue on with what the minister talked about in the scrum out there.

B.C. Rail runs through 25 first nations traditional territories. In order for the government to sidestep their duty to consult with first nations, the government claims they will continue to retain ownership of the railbed and rights-of-way. That's their argument for why they didn't need to consult with first nations.

Now, I don't believe that to be the case. The leaked revitalization agreement, the leasing agreement, discusses selling the publicly owned land to a private company for $1. The minister just addressed that out there in his scrum with the media.

The government has announced a $15 million trust fund for the 25 affected first nations. Here are the facts that the first nations are aware of: there will be a new operator running over reserves and through traditional lands, this operator will no longer be the Crown, and this operator will be present for a substantive period of time — from 90 to 990 years. An argument could be developed that this change in control is substantive and triggers the obligation to consult and accommodate.

The trust fund. The consultation for this fund was shaky at best given that the details of the rail deal were not released to the affected first nations. One first nation chief referred to the trust fund as "hush money." In order to access the fund, the first nations have to allow the Liberals to list them as "a participating first nation on the enabling legislation." The trust fund, which was developed largely by the province without genuine consultation with first nations, could result in the withdrawal of support of the rail agreement by first nations and could impact broader government relationships with the first nations community.

These are the arguments that they're making. The vast majority of first nations in B.C. are opposed to the sale of B.C. Rail since land and rights questions remain unresolved. Can the minister list the names of the first nations who have agreed to be part of the enabling legislation for the trust fund?

Hon. K. Falcon: I'd be happy to do all that, and I'll do it in the legislation I introduce in the House that refers specifically to the first nations benefits trust.

J. MacPhail: I'm not asking about the legislation. I'm not asking the minister to reveal the legislation. Is there some reason why he can't give me that information now?

Hon. K. Falcon: Yes. This is a discussion on estimates of the Ministry of Transportation's budget. The member apparently is interested in talking about issues quite unrelated to that. As I said, I would be happy to canvass all those issues when the first nations benefits trust legislation is introduced in the House.

J. MacPhail: Again the minister is deliberately denying me information. I'm not quite sure why. There's absolutely no parliamentary rule that precludes him from giving me this information. He's just admitted that he's responsible for this. He's going to be introducing the legislation. Somehow he objects, I guess, to me asking the question.

Well, on March 22 Michael Smyth reported in the Province that due to information found in the leaked revitalization agreement…. Oh, I know that the Liberal caucus doesn't like the media. They loved the media when they were in opposition. I know that they don't like the media. Regardless, they're going to be here when this government's back in opposition, and they'll be using the media when they're in opposition again, so try not to bash them too much.

The information in the leaked revitalization agreement…. First nations are now pulling out of the trust fund. So all I was trying to do…. That's what the media is reporting. Here's the opportunity for the government to say that that is not true. I'm actually helping the government to set the record straight, and what does the minister do? He completely stonewalls me. He huffily says: "Oh, I'll be happy to do that when the legislation is introduced." Is the reason he's stonewalling me because the list is growing shorter, shrinking?

Okay. How about this? Can the minister tell me how many first nations — just the number — have signed on to the first nations trust?

Hon. K. Falcon: Again, I'd be happy to debate that when we introduce the first nations benefits trust legislation.

J. MacPhail: So I guess no one should claim that the media's got things wrong when they're given the opportunity to set the record straight, and they stonewall. I hope no Liberal caucus member says that the media ain't getting their facts straight, because this minister has the opportunity to set the media straight, and he won't do it.

The Chair: Member, if I could just interject for a second. If we could keep the information and the questions along the estimates, not on future legislation, please.

J. MacPhail: Thank you very much. I take that guidance, and I agree that the future legislation can't possibly be referred to in this chamber. That's why I deliberately didn't ask for any information. I just asked for the bands that are working with this government.

Hon. K. Falcon: That will be defined in the future legislation which will be introduced into the House.

J. MacPhail: Was none of this part of the announcement — the great announcement that the minister made, that his government made?

Hon. K. Falcon: As the member well knows, what was part of the announcement was the commitment that there would be a first nations benefits trust, but obviously, the details associated with structure and governance and everything else will be introduced as part of future legislation.

J. MacPhail: The minister was far more forthcoming at other times about the wonders of this first nations trust and how great it was going to be. He's kind of backing off on these things now, and I'm sure it doesn't have anything to do with the legislation.

Can the minister give me a financial figure — direct, indirect investment — of how he thinks the B.C. Rail deal will benefit the towns and municipalities along the track line? He's claiming that this is a great benefit for those communities — the B.C. Rail deal, the changes from B.C. Rail ownership to CN Rail ownership. The minister has tossed around figures about how that's going to change things. What is the exact figure that the new deal will benefit towns and municipalities?

Hon. K. Falcon: I'd be happy to. As I've said on numerous occasions, one of the reasons why I am so excited about this deal and this partnership is because it offers the most enormous benefits to northern communities. Everyone knows that, particularly under the decade of that member's term in government, the northern communities were hit particularly hard in the standard of living and in the decline of the economy for the region.

What we need to do is revitalize that economy. The way we revitalize that economy in a big way is by ensuring that we have a top-notch transportation infrastructure network. That means airport. That means rail. That means truck. All of what we're trying to work towards — the improvements to the highway system, which are $1.3 billion over the next few years, 85 percent of which will be in the heartland communities…. The expansion of the Prince George Airport, which will be some of the benefits derived out of the proceeds of the B.C. Rail–CN investment partnership, is part of that puzzle.

The great benefit that is realized with having CN as the operator of the railway is their commitment to make massive investments, massive investments that we as a government don't have any dollars to make. I'm talking about things like 600 centre-beam railcars. I'm talking about the refurbishment of 1,500 railcars to ensure that CN, as the operator, can make sure they can meet the enormous rising demand in the movement of grain and lumber from northern B.C.

That benefits the communities directly because of this: the cost of transportation represents about 20 percent of the cost of shipped lumber and about 50 percent of the cost of shipped coal. Anything that we can do to reduce those costs will have an enormous benefit to northern communities.

J. MacPhail: I wasn't actually asking for anything other than an economic study that backs up what the minister has just said — a financial impact analysis. If you listen to the minister without any study to back up what he says, you kind of take it that CN is a charity.

They're just going to invest this money, and they're not going to get anything back for it. In fact, they're not going to ask for a return on their investment.

Now, B.C. Rail had to invest tens of millions of dollars every year in refurbishment and tens of millions of dollars every year in maintenance. In fact, in '02 they invested $60-something million in maintenance alone. That's far less than the average investment CN has committed to — the average annual investment in maintenance that CN has committed to. So I was just curious about the study.

If CN isn't a charity and isn't doing a philanthropic investment in the province, then their investment is going to require a return on it. How do they get a return on their investment? Through their rates. Through their shippers' rates. That's how they get a return on investment.

The minister admitted before lunch, although somebody must have talked to him over lunch, because he was right back in his message box in question period, offering no information, backtracking on what he said here — well, not backtracking, just confusing everybody about where he really is telling the truth…. We know that there's no guarantee beyond the first contract of a rate reduction. The rate reduction is worth about 2.3 percent of shipping revenue overall. I was saying 3 percent, but the rate reduction is equal to $7 million on the $300 million that shippers pay. That's a 2.3 percent rate reduction. That's only guaranteed for the first day of the transaction agreement. After that, rates can start increasing — as soon as, I guess, the contract is up. The minister won't admit to how long those contracts last. I wonder why that's the case.

In other words, rate increases can start very shortly after the transaction agreement. What are those rate increases? Well, they take away from the overall benefit that the minister is listing as CN's investment. It's a cost-benefit that requires him to make the claim that he does — the benefit received and the cost invested. It's the net of that that's the increased economic activity. What is the minister's study that demonstrates the net economic benefit of the CN sale?

Hon. K. Falcon: I appreciate the member bringing that up, because this actually gets to the core, fundamental difference between our government and that member's government. That member's government has an inordinate amount of faith in the role that government should play in everything. I commend her for that. I think it's a fascinating way to look at the world. Sadly, in their inordinate desire to ensure that government plays a role in everything, the taxpayers have paid a huge price.

They paid a huge price with fast ferries, as we know, because again, they thought that government should be in the shipbuilding industry and that government knew best how to build ships and fast cats and aluminum ferries. They were going to create a new industry. That's how the left and the NDP think. Unfortunately, what they created was almost half a billion dollars in taxpayer losses.

They're always excited to try and maintain government's involvement. The member says to me: "What studies have you done?" Well, I'll tell you, member. What I have done is recognized the long, tragic, sordid history of government-run operations and how they have never been successful, particularly when there are private sector alternatives.

When I speak about B.C. Rail, I think it's important to point out to the member that it's not just the $836 million that's been written off over the last 15 years and that it's not just the half a billion dollars in debt that currently sits on their books, primarily made up of business losses. It's not even the fact that that member's government would take dividends out of B.C. Rail on years in which it was losing money. It's not any of that. It's just the realization that they don't think that government…. They absolutely believe that government should have a role in operating a railway.

Our argument is — and this was the argument we heard from northerners at the northern symposium — that B.C. Rail wasn't working for them. It wasn't working for the north. They asked us — they pleaded with our Premier — to bring in a new operator that could meet the challenges and the needs of communities in the northern part of our province. I'm very proud that we've done that.

I'll tell you — the member probably knows — that CN is widely acknowledged as one of the most efficient railways in North America. When those efficiencies are brought to bear in the operations of the B.C. Rail line, that will provide enormous benefits for the citizens of British Columbia generally.

J. MacPhail: I think the minister's stonewalling again. I just asked for an economic study to back up his claims — a financial impact study. What he does is give me his ideological rhetoric. That's his justification. I'm actually trying to ask specific questions about what financial impact study backs his claim that the CN deal is a better investment for the north than a B.C. Rail deal.

Could I ask the minister a question? In April of 2001 his government specifically made a news announcement that they were not going to sell B.C. Rail. What changed between that time? Were they so out of touch with the north when they made that false promise that it was only subsequent to their election that they realized they had to break their promise, that they were so out of touch?

That minister spent quite a bit of time in the north — or did he? Did he just operate from West Vancouver and Surrey, with his total recall?

Hon. K. Falcon: Well, the member knows full well that it was actually the northerners at a northern symposium who came forward with the recommendation to this government, asking this government to do something about B.C. Rail…

Hon. K. Falcon: …to bring in another partner that could operate this railway.

Hon. K. Falcon: Yes. She uses words like "lie," which is not helpful. It's unfortunate.

The Chair: Members, minister. Would the Leader of the Opposition…? I didn't hear what she had to say. If she felt…. I will be checking Hansard. It was unparliamentary. If she could withdraw that statement, please.

J. MacPhail: If I offended anyone, Mr. Chair, I withdraw. It'd be interesting to see who I offended.

I think what I can tell the member is that, in fact, we held exactly true to our principles. What we did do is make sure we retained public ownership of the railbeds and rights-of-way — total public ownership through the B.C. Railway Company. That is the good news. What we were able to do was realize the dreams of those northerners at that northern symposium — the mayors, the leaders, the shippers that came together and asked the government to bring in another operator, an operator that would make the investments they recognized government didn't have the dollars to invest.

We achieved that through the B.C. Rail–CN investment partnership. It's not a sale. This member can call it a sale for as long as she wants, but it's not. We maintain public ownership of the railbed and rights-of-way. That, to me, is the most important asset of the railway. What we have done is create an arrangement where we've got a long-term lease and a long-term operator to operate the railway on those tracks for a defined period with some very specific renewal options at the government's purview.

The only other thing I would point out to the member…. No. I'll just leave that.

J. MacPhail: Well, Mr. Chair, when I asked the minister to tell us the truth, it was about if he was out of touch. Was his government out of touch when they made a specific election announcement in April of 2001 that they weren't going to sell B.C. Rail? Did they say at that time: "Oh, and we've received information from the north that they want a different operator, and we're going to sell the rolling stock, and we're going to sell B.C. Rail Ltd."? Were they so out of touch with the northerners prior to their election promise in April 2001 that they had to break that promise? He wouldn't answer that question.

Tell us what happened when the Premier in April of 2001 made his promise to not sell B.C. Rail.

Hon. K. Falcon: Well, I wasn't there in April 2001, but I can assure you that the Premier's commitment would have been to maintain public ownership. That's exactly what's been achieved in the B.C. Rail–CN investment partnership. We've actually got the best of both worlds. We've got public ownership of the railbed and the rights-of-way, which is critical to securing the long-term interests of British Columbia, and we've got a private sector rail operator that is going to invest billions of dollars to provide top-notch rail service right across the province.

That does differ a little bit — I grant the member — from the direction that her government was going in, because under Project Roundhouse, as that member knows well, their government had a plan to sell B.C. Rail lock, stock and barrel. The difference with our government is that we decided we would listen to northerners, try and achieve the dreams and recommendations they were making, maintain public ownership of the railbed and rights-of-way — we've done that — and bring in an operating partner.

The Chair: Members, I'd just like to make one comment here, if I may, that is with regard to the estimates discussion. We're starting to get into an area…. We've been continuing for quite some time on an area of policy and items that were election items and discussing election items. If we could try and focus on the impacts of the budget and the estimates that are before us, I think we would be able to continue on and move through this a little more quickly. If I could ask the indulgence of the members to try and specifically relate items to the estimates budget. Thank you.

J. MacPhail: Thank you. I take your direction. If the minister would actually answer my questions rather than giving ideological rhetoric, we would be able to get those answers. What he's trying to do is blame my previous government for what we did do and what we didn't do. We didn't sell B.C. Rail, and he's telling us: "Gee, you're still responsible for not selling B.C. Rail." I just love it.

My government didn't sell B.C. Rail. I asked the minister specifically what economic impact study he has to show the increase in economic benefits as a result of the CN purchase of B.C. Rail, and he hasn't done any. He answers with ideological rhetoric that he

knows the private sector does better than the public sector. I think, probably, the public would like a little more than this minister's ideological fervour.

What economic impact cost-benefit analysis has the government done to show what the increased economic benefits are with the sale of B.C. Rail to CN, and what does that number result in?

Hon. K. Falcon: By way of example…. Perhaps this will help the member, because I know she doesn't have a strong level of confidence in the private sector's abilities. The sale of the Casco Terminals, which were formerly owned by B.C. Rail and were sold in 2002, I think is a very good example. Purchased by P&O Ports, they are known commonly as the Centerm facilities, a container-loading facility based in Vancouver. Since the sale in 2002, P&O Ports has announced that they will be investing $130 million in those container-loading facilities, that they will be hiring over 100 new workers — high-paying jobs.

Hon. K. Falcon: The member asks what it has to do with this deal. What it has to do with this deal is it provides a graphic example for that member of what happens when the private sector gets involved in operating what used to be a government-run operation. I know that member finds that hard to believe, but the private sector does bring lots of efficiencies.

And in the CN–B.C. Rail investment partnership, efficiencies are a major thing, because one of the things that CN will get are significant synergies with the existing B.C. Rail network. Shippers are going to benefit, of course, from the lower rates. We've discussed that — the 7 percent average reduction in shipper interline rates. Also, we'll get much more investment in centre-beam cars, much more investment in the port of Prince Rupert, which will create new opportunities for shippers from right across northern B.C.

They're obviously going to get much better service. For example, we know the Chicago express will reduce the transit time from Prince George to Chicago by two full days. That is an enormous benefit for shippers. Again, that's reducing their costs because it's increasing the efficiency of travel. They also get the benefit of increased transit time throughout the network. Just the opportunity to ship things from up in the north to the lower mainland will be faster than it was under B.C. Rail. Those are the kinds of benefits. That's the package of benefits that speak to the question the member raised.

J. MacPhail: So the minister didn't do any economic impact study. If he had, he would have said, "Here's what the future of B.C. Rail…. The net present costs of B.C. Rail would have been, if it had continued in operation as we promised in the last campaign…. Here's what CN brings in net present value with this deal," and he can't. He's done nothing of that. He's done absolutely nothing. He has said — his ideological fervour says: "Public sector bad and private sector good." It's his ideological fervour that maintains that, and he's got nothing to back it up on this deal.

The sale that he refers to, the sale of B.C. Rail…. The P&O Ports, I guess he was calling it. Sorry, I don't remember what he was calling it, Mr. Chair. It's completely irrelevant to the question that I just asked. Can the minister say what the community impact is of the various communities along the B.C. Rail line, for a net increase in economic impact?

Hon. K. Falcon: Mr. Chair, I'm reminded of your comments that we need to be sticking to issues having to do with the Ministry of Transportation budget. I'm trying very hard to accommodate questions that are completely irrelevant to that particular subject.

Hon. K. Falcon: …with respect to that comment is that one of the enormous benefits to communities up and down the line will, of course, be that over the 90-year term of the agreement those communities will see up to $800 million in additional property taxes being paid. Clearly, that is an enormous benefit.

J. MacPhail: Yeah, because it's another broken promise of this government. It was the Premier of the province that said Crown corporations were going to pay property tax. He made that promise in writing, and he has delivered diddly on it. That's not a new benefit. That's absolutely not a new benefit. The Premier wrote to the UBCM and said: "Oh, my government's going to be paying property taxes through the Crown corporations." How much have the Crown corporations paid in property taxes to deliver on that promise? Zero. Maybe this deal is just making up for another broken promise by the Premier when he said he was going to have Crown corporations pay property taxes.

It's just a little web of failures and broken promises by this government. They're trying to glean something positive out of this deal. The government did absolutely no financial impact study, did no cost-benefit analysis and did no economic impact study for this deal. That's what they have failed to do. They were so desperate to give this away to CN, who had the inside track.

In the economic benefit that the minister listed today in the House, I think he said $5 billion. Where did he get that figure from? Is that a net-benefit figure? Could he break that down for me, please?

Hon. K. Falcon: During the term of the 90-year lease, there will be an investment of approximately $3.5

billion in the rehabilitation in line upgrades. During the period of the 90-year term, there will be, as I say, up to $800 million in taxes paid to communities up and down the line, in addition to the billion dollars that CN is investing upfront in this partnership arrangement. Of course, that doesn't even begin to include the 600 centre-beam cars and all the other 1,500 cars that will be refurbished and all the other investments that they will be making in this transaction.

J. MacPhail: So there's no net benefit. That's $40 million on average in refurbishment and maintenance that they're going to invest over the 90 years. B.C. Rail has invested 50 percent more than that in maintenance and refurbishment over the last few years and, certainly, has invested that on average, so there's no net benefit there. The $800 million is getting somebody else to fulfil a broken promise that this government promised when the Premier said that Crown corporations were going to pay the property taxes.

By the way, is ICBC paying their property tax yet? I don't think so. Is B.C. Hydro paying their property taxes yet? Hmm, I wonder what the Premier is doing about that broken promise. So there's no net economic benefit from the sale of B.C. Rail to CN, and the minister has nothing to prove that there is any net economic benefit.

I want to ask about this $1 land sale and the first nations. We know, actually, that the view of northerners about the single greatest impediment to economic growth is it's the failure to settle land claims — the single greatest impediment — so the settlement of land claims is actually extremely important.

We know from the leaked parts of the deal that the government claims they can sell land for $1. The government claims to have been fulfilling their duty to consult with first nations. We know that is being challenged hugely by the first nations. The revitalization agreement has a clause that the first nations have seen — a clause that allows the government to give publicly owned B.C. Rail land to CN for $1.

The Liberals — and I heard the minister say it again today — have said that in this case, if CN contaminates any land with an environmental spill and the government is upset about that, they can force ownership of the polluted land on CN. Actually, before the government changes to the Waste Management Act, that responsibility would have rested with CN regardless. This government, of course, has weakened the environmental protection language. They are saying: "Oh, if that CN has a spill, we can force them to buy the land for a buck."

Mr. Chair, as the minister has been spinning this line, first nations have been reacting to that with horror. Here's why. The fact that the government could sell rail-track-bed and right-of-way for $1 to a private owner opens up the possible infringements of aboriginal title and rights as well as issues of consultation and accommodation.

Further, the B.C. treaty referendum established that private land would not be on the treaty table. Given that B.C. Rail goes through…. Virtually its entire right-of-way is through either reserve or else areas under claim by first nations. Given the first nations concerns, how can the minister stand by his statement that there is "absolutely no threat whatsoever to rights and title"?

Hon. K. Falcon: Member, I know the Attorney General has been canvassed on this issue quite extensively too. I would encourage you to read his comments in the media. He commented quite extensively in the media.

Hon. K. Falcon: No, I'm just suggesting that it might be one avenue where the member can answer this.

What I will point out is that the province requested and specifically put in this provision because this provision allows the province, at our sole discretion — that is the legal language — an option to force CN to take ownership of abandoned rights-of-way if the railway operations are discontinued.

Let's talk about that for a minute. If that was going to happen…. We know, of course, that they can't discontinue it for the first five years of the agreement, because that's part of the agreement. After that, if they applied for discontinuance through the Canada Transportation Act, if no short-line operator stepped forward that was prepared to operate on that discontinued portion of the track and if the province has exhausted all the options available to it for land disposition…. Remember, we are the owner of the railbed and right-of-way. This is another one of the great advantages of why we wanted to maintain public ownership — because we have those options to work with first nations, to work with local government, to work with the private sector, looking at what options we have available.

One thing I would underscore to the member and one thing she's quite incorrect about is that we would always respect our constitutional obligations with respect to first nations prior to engaging in a transfer of any discontinued track lands. That would automatically trigger our obligations, and we would — as we have done and always will do — fulfil our constitutional obligations to first nations.

The reasons why the province might want CN to take ownership relate…. I used the environment as an example. The member is quite right. If there is an environmental spill, there are agencies of government that deal with the immediate impact of that spill.

There are other issues where we want to make sure that future taxpayers and future governments are protected. If there is, over the course of the use of the train over a certain line, some significant remediation costs that were never considered at the time — who knows what those could be; who knows what they might be hauling in 30, 40, 50 years? — it does allow the province, at its sole discretion, to ensure that a discontinuance doesn't take place for the sole reason of trying to off-load

that cost onto the public taxpayer. That, to me, is an example of a very smart evaluation team working hard to protect the public interest by adding that clause.

There are also safety issues that would be considered. For example, if part of the discontinued track included a tunnel, there could be significant safety and engineering issues associated with that tunnel. That may be something a future government wants to be very aware of before they find themselves locked into a position where they may have to consider absorbing enormous costs associated with upgrading or spending significant dollars on a tunnel.

J. MacPhail: Is the clause that the minister just referred to, where he said it forces CN to clean up environmental damage…? Is that part of the transaction agreement — the actual forcing of them to clean up the environmental damage?

Hon. K. Falcon: What the clause does allow us to do is it allows us, very specifically at our sole discretion, to force ownership onto CN so that CN has that line or section of line returned to them and they will be fully responsible for all the obligations that flow from the ownership therein.

J. MacPhail: The clause forces ownership for $1 not on anyone but on CN, hence all of the concerns of the first nations — because it goes through the first nations land claims. This government has a clause that forces ownership for a buck, ownership for $1 — oh, my God, please force me — not on anyone else, not for public tender, but on CN.

All this malarkey that it's to force CN to clean up any environmental damage is just malarkey. It's not part of the contract. The contract doesn't say: "CN, you pay a buck and you've got to clean up the land." There's nothing in the contract forcing CN to do that — absolutely nothing. And with this government's weakened environmental laws, there won't be any legal obligation on them to clean that up — absolutely none. No wonder the first nations are concerned. The minister says: "Don't worry. We're going to consult and accommodate." Well, the record is pretty bad so far.

Here's what the first nations have demanded. They've demanded, like many others, to see the details of the deal. The government has continually said to first nations, the same way they've said to all the rest of us: "Trust us. It will be great for everybody in the province, including first nations." Now he's saying it again. The minister is admitting that they're going to force ownership for $1 on CN. There's no protection for any of the rest of us for environmental cleanup, and first nations are left out of it completely.

Let me just quote from the revitalization agreement: "The landlord shall have the right in its sole discretion to deliver notice of its intention to transfer all of its right, title and interest in such discontinued lands to the tenant on an as-is, where-is basis for $1." Right, title and interest. That's what the agreement says. Nothing on an as-is basis. Absolutely no requirement to clean up the land — none.

The courts have ruled that a change in ownership involving Crown land…. When that occurs, the government is obligated to consult impacted first nations. Now, the quote that I just read — is that a change in ownership of Crown land?

Hon. K. Falcon: Again, the member just has a way of ignoring some really fundamental points. I hope she'll pay attention to this. It's at the sole discretion of the government of the day to make a decision as to whether they wish to force ownership. Should a government of the day wish to make that decision to force ownership, it will be in full compliance with the constitutional obligations of the government of the day. There's no question about that.

The other thing I would say to the member, though…. As she knows, I'm always an optimistic person. That member probably recognizes the enormous progress we've made as a government in working with first nations. The economic measures development fund, which has created almost $30 million of economic opportunity spread across, I think, at least over a hundred first nations across the province, is part of our effort. The four agreements-in-principle — I believe the number is four — that the Attorney General has been able to bring together are certainly demonstrating significant progress when you consider it's been three years. That member — she knows — over ten years didn't have very much luck.

The important thing for the member to realize out of this is that that clause is in the sole discretion of the future government. The sole discretion in any decision must be made in full compliance with our constitutional obligations, which we take very seriously as a government.

J. MacPhail: Yes, but let's be clear. If a rail line portion is discontinued by CN at its sole option in five years, who's going to use it? The minister tried to grapple with some sort of convoluted explanation that people were laughing at via e-mail about some short-line operator taking over the tracks. People were laughing on our e-mail that we received, that somehow they would miraculously get rolling stock, that they would be able to negotiate an agreement with CN that would be cost-effective when CN has a monopoly.

I should actually spare the minister some of this information, because it harms the business climate in this province — when I give him the feedback from business people.

Then he goes on to say: "Oh, it's our sole discretion to sell the discontinued land for a buck." Well, we'll just see after five years what happens, when those rail lines are abandoned, nobody wants to use them. We'll see what CN says to the government.

Is there anything in the revitalization agreement that requires, with this forced sale to CN, that they

Hon. K. Falcon: Two things to the member. The first is that that would be their obligation, as you know, as the owner of those lands.

The second thing I would say is stay tuned. Upon the completion of the competition bureau review, I think you will find in there that there are clauses which address that too.

J. MacPhail: Oh, I'm sorry. The minister was quite comfortable in saying the transaction agreement doesn't have such a clause. So there is a clause in the revitalization agreement that forces CN to clean up their environmental damage or their pollution. Is that what the minister is saying — that I'm going to be pleasantly surprised?

J. MacPhail: If there's a clause in there requiring them to clean up their damage, why do you need to sell the land to them? If that was the purpose of the forced sale and such a clause is in the agreement to force them to clean up, why do you need to give away Crown land for a buck?

Hon. K. Falcon: Well, I've already canvassed all the other reasons, too, that we would consider. Again, as the member knows, on completion of the competition bureau review, she will be able to have all that information at her fingertips. I'm sure she will enjoy going through it and seeing what a good job our negotiators did.

J. MacPhail: I'm sorry. I missed the other reasons that it would be good for the province to give land over for one buck when there's already a clause forcing them to clean up their environmental mess. I'm sorry. What would be the good reasons for that that would override first nations concerns?

Hon. K. Falcon: Again, they don't override first nations concerns. I know that member wants to continue to try to get on record false and misleading information, but I would remind her that that is not the case, never has been the case and never will be the case. I can't emphasize that much more. The other reasons I've said to the member.

There could be safety issues that the government of the day may want to consider. Let's assume for a moment that we have a bridge that is in very poor shape and is going to require a substantial, massive investment. We don't want, again, a rail operator to be able to say, "Well, let's just discontinue that section, and we'll leave that cost to the public taxpayer" — or the tunnel example that I gave you earlier.

The important point, member, is that the reason why a clause like that is in place is to actually protect the public interest. I get that you're not used to protecting the public interest, perhaps, but it's very, very important. When that clause isn't there, what happens down the road is that suddenly the public finds themselves in a position where they're being stuck with enormous costs. What this does is make sure that the public interest is protected. That's exactly why it's there at the sole discretion of government.

J. MacPhail: Oh well, let's just take that through, then. We've got a clause on environmental cleanup, pollution cleanup, and now there's a clause in the revitalization agreement requiring them to do infrastructure correction and rehabilitation on discontinued lines. We're talking about discontinued lines here. That clause is in — what? — the transaction agreement or the revitalization agreement?

Hon. K. Falcon: I'm going to remind the member that I'm trying very hard to be cooperative with the member and to try and answer her questions, but what the member is attempting to do is get into details of the transaction agreement and the revitalization agreement. I think I've been extraordinarily patient in trying to give her as much information as I can without betraying the commitment and the confidentiality of the provisions of those agreements.

I've told the member before — and I'll say it again — that upon completion of the competition bureau review, that information will be made available subject to commercial sensitivities and subject to the freedom-of-information and privacy act.

J. MacPhail: Mr. Chair, I find the member's remarks offensive — that somehow he's being wrongly done by me asking these questions. It's a real tough job the minister has, and it's his job to answer these questions.

When he makes claims in public to justify a $1 land sale, he's got to back up the claims. So he was out there in the hallway justifying that we have to do this — we have to give the land to CN so that we can force them to do these…. If these matters are clauses already protected in the transaction agreement and/or the revitalization agreement, there should be no reason to have to sell the land for a dollar.

There's no reason for him to keep this secret — absolutely no reason for him to keep it secret. Is there a clause…? He was out in the hallway giving all these great reasons why they're going to do the land giveaway. He refuses to acknowledge the question that this is a sale of Crown land. He completely refused to admit to that. What is it? Is this a sale of Crown land — when the publicly owned right-of-way is forced onto CN for a buck? Is that a sale of Crown land?

Hon. K. Falcon: Through to the member, we've made very clear that there is a discontinuance policy that would kick in, in a situation like this.

Hon. K. Falcon: The member is interrupting my answer — a little bit frustrating.

In the discontinuance policy, as the member knows, there are opportunities for short-line rail operators to avail themselves of the ability to operate on those short lines. Now, the member apparently has people laughing in her e-mails. Presumably, those are people who know little to nothing about the railway sector — not surprising to me. In fact, we know that 30 percent of the railway operators in the country are short-line rail operators — something that I educated that member on earlier on.

The Chair: Excuse me, Mr. Minister. If I could please remind the member to please speak through the Chair.

Hon. K. Falcon: Through to the member, for the final time I will say that that clause is put there at the sole discretion of government. After exhausting all other opportunities as the owner of the railbed and right-of-way to involve first nations or perhaps to involve local government or the private sector in some opportunities around the land, should the government then make the decision for safety reasons, for environmental reasons — whatever the considerations may be — they do have the right to force ownership on CN, subject of course to any obligations that arise out of our duties to consult with first nations.

One thing I should point out to the member, though, is that being the optimistic person that I am, I actually believe that in 90 years we may be in a situation in British Columbia where we've solved all of our outstanding first nations issues. Wouldn't that be an exciting day — where we could have a situation where first nations are fully participating in the economic prosperity of the province. That's exactly the goal we're working towards as government.

J. MacPhail: The member didn't answer whether it's a sale of Crown land. I know why he doesn't want to answer that question. It's because he doesn't want to admit that it's a sale of Crown land. It's not 90 years hence; it's five years hence that these discontinued lands can be sold for a buck — five years from now.

It says that the landlord shall have the right, in its sole discretion, to deliver notice of its intention to transfer all of its right, title and interest in such discontinued lands to the tenant on an as-is, where-is basis for $1. Is that clause a sale of Crown land if it's invoked?

Hon. K. Falcon: The member, I believe, has read the quote exactly. I don't have it in front of me. Again, if the process that I talked about, the process of discontinuance, had been followed through and if all the other avenues had been exhausted — including the short-line rail operator options, the first nations opportunities, the local government opportunities, the private sector opportunities — were there to be a future government that determined there were safety concerns associated with that section of the line or were there to be environmental remediated issues that the future government identified, then yes, they have the ability to force that ownership on CN, subject of course to their constitutional obligations and duty to consult with respective first nations that may have an interest and may be impacted by that transfer.

J. MacPhail: Oh God. You know, it's absolutely ridiculous. Well, what was the answer — yes or no? I missed it. Is it a sale of Crown land — yes? Or is it not a sale of Crown land? The minister has not answered that question. He may think it's cute, but no one else does. Is it a sale of Crown land? The minister has not answered that question. How embarrassing. Is there some reason he doesn't want to admit that it's a sale of Crown land? Did Martyn Brown yank his chain over the lunch hour? There's a huge responsibility being a minister of the Crown, and this minister falls completely short — completely.

Mr. Chair, this is a sale of Crown land. It's completely a sale of Crown land, and the minister knows it. He doesn't want to admit to it, because of course, he didn't tell these details when they made their announcement on the sale of B.C. Rail. These are circumstances that have leaked out. The government has been caught having to answer all these questions, not because they've come clean but because someone had the intestinal fortitude to leak some of these details that have huge impacts on the governing of this province.

Will the government just stand up today and guarantee that it will not, in its sole discretion, deliver notice of its intention to transfer all of its right, title and interest in such discontinued lands to the tenant on an as-is, where-is basis for $1 if such land is subject to a land claim?

Hon. K. Falcon: As I've said before and I'll say again, through any process invoking that clause, which is at our sole discretion, we will of course fully respect and fully comply with all of our first nation treaty obligations. I've said that from the beginning. I've said it today. I'll probably say it tomorrow. I know the Attorney General has said it many times. We can't possibly flesh this out any more.

J. MacPhail: The Attorney General has made no such commitment whatsoever. In fact, the Attorney General said they sell Crown land to private interests all the time.

Why won't the minister give that guarantee? Just guarantee it — that he will not invoke that clause of the sale of Crown land for a buck if that land is subject to a land claim. That's the responsibility under the treaty negotiations — their obligations. Why can't he just give that guarantee?

J. MacPhail: Yeah, our government never did this, but the Social Credit cabinet ministers used to turn their backs when they were so frustrated in answering questions — or lack thereof. It's embarrassing that this minister, for the first time in his time as a minister, actually has to answer some tough questions, and he's already exhausted, upset, angry. He turns his back on the members and refuses to answer questions. I guess the job is a little tougher than he thought it was going to be.

Well, let's put it this way, then. What are the specific legal obligations of consultation and duty to accommodate if this clause is invoked? "The landlord shall have the right, in its sole discretion, to deliver notice of its intention to transfer all of its right, title and interest in such discontinued lands to the tenant on an as-is, where-is basis for $1." What's the duty to accommodate there?

Hon. K. Falcon: If the member is interested in extensive discussion on the duty to accommodate, I suggest she talk to the Attorney General. I'm not going to pretend to be the expert on the duty to accommodate. I might also point out that I was turning around to get myself a candy, member.

J. MacPhail: Sorry. What does he think — that we're idiots here, that we can't see what's happening? It's embarrassing — absolutely embarrassing. The minister's made these claims. The minister has made these claims about the duty to accommodate and that they'll deliver all of their first nations obligations.

Okay. Let me ask the minister this. With the clause of the revitalization agreement that I keep reading into the record, what's the legal opinion the minister has to back up that this meets the government's obligations on the duty to accommodate and to consult?

Hon. K. Falcon: I'm going to remind the Chair and the member that I'm left again asking what this has to do with the Ministry of Transportation's estimates.

J. MacPhail: Gee, I feel badly that the minister is so unfamiliar with his role. It's actually this agreement, Mr. Chair, that the minister's claiming will put a billion dollars into the budget this year. That would be '04-05. I'm just trying to figure out how the deal's going to go ahead smoothly and not end up in court. I hope that's the link the minister sees of why he's obligated to answer these questions.

If the minister is referring me to the Attorney General on this matter, what role, if any, did the Attorney General have in negotiating this clause?

Hon. K. Falcon: I'll say to the member, as I've said before, that we clearly recognize that whenever there is any sort of a transfer that takes place, government has certain obligations. We've committed, as we always have, to ensuring that we maintain and fulfil any and all obligations associated with first nations, and we will.

J. MacPhail: Has the Attorney General or the Attorney General's staff been involved in the development of this clause?

Hon. K. Falcon: The constitutional obligations of the government of British Columbia will be fully adhered to, as I've said repetitively before, prior to the transfer of any lands to anyone.

J. MacPhail: The minister just admitted that he's not an expert in this area, so who advised him that that was true?

Hon. K. Falcon: The minister is aware that we as government all have constitutional obligations with respect to first nations. Everything we do is governed by ensuring that we respect those constitutional obligations, and we have, and we will.

J. MacPhail: I assume when I ask the question whether the Attorney General or the Attorney General's staff had been involved in the drafting of this clause and the minister refuses to answer the question, he probably refuses to answer it because the answer is no. The answer is no, the Attorney General had no input into this clause whatsoever, so their guarantee that they're going to meet all their obligations on the duty to accommodate and consult are just fairy dust. He has no proof and refuses to give me any information on where they've actually tested that with a legal opinion or with the involvement of the Attorney General — nothing. In fact, I pretty much predict the Attorney General didn't see that clause at all.

Let me give a very specific case. The Seton Lake first nations have been attempting to settle their long-

standing issues with the province and B.C. Rail since 1911. The Seton Lake first nations have been attempting to settle outstanding issues, and 93 years ago they declared: "We are the rightful owners of our tribal territory and everything pertaining thereto." In this formal notice to government the first nation also addresses the trespasses of the railway through the territory. The document states: "We also wish to protest the seizing of our lands for the building of railway depots and sidings."

Hon. K. Falcon: One of the things the Seton Lake band wanted was a passenger railbus to provide service to their first nation forever. That was one of the things they asked for and one of the things they got under the proposed agreement.

J. MacPhail: I'm asking about the trespass of land and the clause that gives CN the right to be forced to buy Crown land for a buck.

Hon. K. Falcon: For the member's information, there are no tenure intrusions on the Seton Lake first nations lands. The Seton Lake position — I guess I could paraphrase — is that the province never owned Crown land, so they view everything that has happened subsequent to that to be an intrusion on the land. Those will be issues that will be ultimately settled at the treaty table.

J. MacPhail: How in this sale of B.C. Rail to CN and this clause being negotiated of the forced ownership on CN…? What duty to accommodate the Seton Lake band's interest was made?

Hon. K. Falcon: I'll just provide a little outline of some of the advising and informing that was done in the process of engaging the first nations up and down the line. The issues are: seeking an operating partner for the railway presents no change in use; as the province, through the Crown corporation, the B.C. Railway Company continues to own the railbed and track, and there is no change in ownership; all of the rights and obligations of the province continue with regard to the land; all of the rights and remedies available to first nations with regard to aboriginal rights and title continue to be available.

On April 10, 2003, Premier Campbell and Minister Reid, the minister at the time, provide a letter to all first nations along B.C. Rail's right-of-way to advise them of the government's decision to seek an operating partner for B.C. Rail's freight railway.

The process to engage an operating partner involves a request for proposals to be issued in mid-May 2003. The letter advised that B.C. Rail officials would be contacting first nation chiefs and counsel to arrange meetings that would outline the process and inform first nations of the steps being undertaken by the province.

On April 15, 2003, B.C. Railway Company commences an advise-and-inform strategy with first nations along the railway line with whom they have had a business relationship.

On June 9, 2003, all 25 first nations have been contacted and provided with the following information: full information regarding the process components and time line; the technical rationale behind the decision to seek a partner; an explanation of the province's objectives in seeking a partner; and a full accounting of the financial situation of B.C. Railway Company, including the province's interest in the Crown.

On July 15, 2003, the B.C. Railway Company prepares an extensive package of questions and answers for first nations as a result of their first round of meetings. From July to October 2003, the B.C. Railway Company continues to meet with first nations to discuss and clarify issues and questions raised.

J. MacPhail: Thanks, but I have no idea what that had to do with my question.

When did the government consult with the first nations, the 25 bands, about the clause that says: "The landlord shall have the right in its sole discretion to deliver notice of its intention to transfer all of its right, title and interest in such discontinued land to the tenant on an as-is, where-is basis for $1"? When did the government consult with first nations on that clause specifically?

Hon. K. Falcon: That consultation would take place, should that clause ever be triggered, by a future government — of course, assuming that we're not in a position where we actually have land claims solved in British Columbia.

J. MacPhail: So, of course, there's been no consultation on that whatsoever. In fact, the consultation that the minister outlined that the government did was before the final deal, before the announcement. I'm sure it was nice, but first nations are now saying it wasn't consultation, because details such as the one I just read weren't revealed, discussed.

Mr. Chair, the minister makes it sound like this clause can be invoked years from now. How about five years from now? It's true that there will be another government in power, but this clause for the sale of Crown land for a buck to CN can be invoked five years from now.

I want to ask about the time line of the sale. The government actually said last year that they expected the completion of the sale in the first quarter of 2004. I made it specific — did they mean calendar quarter? — and yes, they meant calendar quarter. What happens when the transaction agreement comes back from the competition bureau? We don't know when. We don't know how. Does the government then sit down with first nations to talk about the duty to accommodate based on the transaction agreement or the revitalization agreement?

Hon. K. Falcon: As the member knows, there's no change of ownership of the railbed or rights-of-way, and so we will continue to maintain all our prior obligations and all the prior work and consultations that are done with first nations on an ongoing basis as the owner of the railbed and rights-of-way.

J. MacPhail: Did the Attorney General participate in the drafting of that answer?

Hon. K. Falcon: The Attorney General was consulted and agreed with the process that was followed on informing and advising local first nations. I'm sure the Attorney General agrees that we do continue to have an ongoing relationship, particularly as we and government maintain ownership of the railbed and rights-of-way.

J. MacPhail: Oh, so now the Attorney General was consulted. On what portion? I asked whether the Attorney General was consulted on the minister's answers to say that there is…. Basically, what the minister is saying is that there is no requirement or duty to accommodate or consult until that clause is invoked — the clause about the sale of the discontinued lands. That's what the minister is saying — that there is no sale of right-of-way or of Crown land. Well, there will be if that clause is invoked.

Is that the portion that he said the Attorney General was consulted on and that the minister is giving that answer to — that there's no requirement for consultation or obligation to accommodate?

J. MacPhail: Okay. What was the Attorney General consulted on — the process of consultation with the first nations?

Hon. K. Falcon: Yes. As I mentioned before, the Attorney General was consulted and agreed with the process followed in informing and advising first nations of details of the partnership arrangement. As I mentioned, I'm pretty sure the Attorney General agrees that we will continue to have an ongoing relationship with those first nations.

J. MacPhail: Oh, so that process of consultation from April 2003 through to October 2003 is what the Attorney General was consulted on. Well, if the minister can reveal that, what else was the Attorney General consulted on in terms of providing legal advice to either the transaction agreement or the revitalization agreement?

Hon. K. Falcon: Again, I'll remind the member that we're here to discuss my estimates. This isn't an opportunity for the member to go on a fishing expedition, trying to pull out details of information that I've repeatedly said is going to be fully released and disclosed, subject to the completion of the competition bureau review.

J. MacPhail: Well, I'm trying to actually bring some confidence to this agreement, and the minister is offering none — absolutely none. The Attorney General is nowhere to be seen in giving advice on the government's legal obligations to first nations on this agreement. The revitalization agreement is going to allow for the sale of Crown land in areas where land claims are being negotiated, and the Attorney General is nowhere.

Should I be asking the minister questions on the first nations trust fund? When am I supposed to ask the minister? Which minister am I supposed to ask the questions, and when am I allowed to ask questions where I'll actually get answers? Could the minister just clarify that for me?

Hon. K. Falcon: Certainly. That will be future legislation, and the member will have every opportunity to ask me those questions in the House.

Hon. K. Falcon: The member knows full well that we have a process where the federal competition bureau is reviewing this agreement. Upon the conclusion of the review of that agreement, there will be a period where everything gets finalized, and then we will be into the House as soon as I possibly can.

J. MacPhail: On the issues of aboriginal rights and title, the minister somehow thinks these aren't germane to his estimates. Could he advise me on who I'm supposed to be asking these questions of, in just the same way he advised me that I'm supposed to ask the Premier questions about Bob Virk?

Hon. K. Falcon: Mr. Chair, I have repetitively answered these questions in every possible fashion, and I would ask that we need to move on. I've tried very hard to be patient, but I've answered this question multiple, multiple times.

J. MacPhail: Actually, Mr. Chair, he hasn't answered the question. He has not answered the question. He won't even admit that the Attorney General is or is not involved in this, so he hasn't answered the question. Well, if he won't answer that question, I'm going to ask it anyway. If he won't refer me to somewhere else, I'll just continue to ask him these questions then.

The Union of B.C. Indian Chiefs has commissioned a legal review of the B.C. Rail deal. One of its findings was that the government will use the trust fund as a sign of "workable accommodation in the event of a

legal challenge." Did the government anticipate the relationship between first nations' sign-on of the first nations trust and what that meant for accommodation? Will the government be using the first nations trust fund as a sign of workable accommodation in the event of a legal challenge?

Hon. K. Falcon: There are several challenges associated with that question. She's asked me to speculate on speculative future lawsuits. I've been very clear to the member that there is future legislation pending with respect to this issue. We will have every opportunity to canvass these issues at length, if the member so desires, at that point. Really, we need to move on.

J. MacPhail: Is the minister saying that that particular question I just asked him will be addressed in legislation? Is that what he's saying?

Whew, the minister's out of answers already. How ridiculous and how insulting to a process. The minister refuses to answer questions that I'm asking him. He refuses to answer questions that he somehow says, oh, I'll have the opportunity to ask in legislation. When I just try to confirm that, he won't stand up. He won't direct me to where I'm supposed to ask these questions. He says he's answered them, and he hasn't.

I know why. It's because there are no answers that would satisfy the nod test in the public, and there are certainly no answers that would satisfy legal challenges to this agreement. My gosh. Really, the first time this minister has had his feet put to the fire, and he's running away, running away, sitting in his seat refusing to get up and answer questions. Oh, I don't think that bodes well for future opportunities for this minister.

Well, let's go back to a portion of the agreements that the minister has been answering questions on. Let's go back to the transaction agreement and the 7 percent rate reduction on interline agreements, which works out to a 2.3 percent overall rate reduction for God knows how long — a couple of minutes, a couple of hours, a couple of days, a couple of years. We don't have any idea how long the rate reduction is actually enforced, because the minister refuses to answer the question. The rate reduction, which is equal to $7 million — is that per year?

Hon. K. Falcon: Mr. Chair, I have extensively answered these questions for this member. She either has just an absolutely appalling memory, or she is just deciding to keep asking questions that have already been extensively answered.

That member knows that that 7 percent average rate reduction for interline shippers will be in place the moment respective agreements come due and the moment this deal receives the blessing of the competition bureau. If that member would just remember that information, she would know and should know that what we said was that from then on, it would have an application to the railway cost adjustment factor, which is an index based on railway efficiencies.

She continues to try and ask us to see into the future as to what that would mean to rates. I told her that I didn't have the information to see into the future — nor does anybody — but that if she looked over the last ten years, the experience would be that rates over a ten-year period would increase by 2 percent.

J. MacPhail: I'd be happy for the minister to show me in Hansard where I've asked that question before. I'd be happy to.

Let me take a different approach, then, because the minister won't tell me how long the 7 percent rate reduction is guaranteed — wouldn't tell me at all.

I'm sorry, Mr. Chair. The minister is making some signs. I'm not sure whether they're some sort of signs that he's making across there. He's indicating something about I'm crazy or something, to my head. Grow up, I'd say to the minister — grow up and take his responsibility seriously.

The minister said that the revenue from interline agreements on an annual basis was $100 million in Canadian funds and that that would be reduced to $93 million. For how many years, then? Let's ask that question. The minister was quite comfortable in saying that the rate reduction is worth $7 million. Is that for '04? Will it be carried forward? Will the shippers be paying $93 million for interline freight rates in '05? There's a basic question that hasn't been answered.

Hon. K. Falcon: My last answer was the answer to that question. The answers I gave before the break were the answers to that question, and the member knows that.

J. MacPhail: What period of time is the $7 million spread over? How is it that the minister could come up with a number like $7 million in savings to the interline shippers but he can't give me the period of time that that rate reduction is? Is it calculated in '04? Does it spill over into '05?

Hon. K. Falcon: Okay. I'll try to go over this one more time for the member. As the member correctly knows, the 2003 interline freight revenue represents about $100 million. All the existing contracts are honoured. We've gone over that before. The member knows that. A new public tariff is established as part of the open gateway, something that the member knows. We've canvassed that before.

If, theoretically, all the contracts come due when CN acquires the operation, then the $7 million average reduction is realized. From that point on, any rate adjustments will be made in accordance with the railway cost adjustment factor, which is the index we discussed earlier.

J. MacPhail: I'm sorry. The minister said something about if all the contracts come due, the $7 million saving is realized. Could he expand on that, what that means — if the contracts come due, the $7 million saving is realized?

Hon. K. Falcon: What that means is that many of the shippers…. About two-thirds of the shippers are currently locked in existing contracts, but one-third of the shippers will come due immediately. They will have the immediate benefit of the 7 percent average interline rate reduction. The balance will see their reduction when their contractual term expires. Those typically vary from one to five years, so it will totally depend on when they expire.

J. MacPhail: This is new information that we've never had before. Isn't this interesting? Okay. The contract agreement is signed. No, I'm sorry, Mr. Chair. The competition bureau approves the transaction agreement, and about a third of the shippers' contracts are up. That's what the minister just said. What group gets the 7 percent reduction immediately after the transaction agreement is approved? Is it the group of shippers with contracts with B.C. Rail or those whose contracts are expiring?

Hon. K. Falcon: About two-thirds of the contracts are contracts that the shippers have negotiated with B.C. Rail. Most of those contracts expire in a one-year period, but depending on the specific shipper, some could go as long as five years. The balance, the other third that I mentioned, would come due immediately upon CN becoming an active partner in the partnership agreement.

J. MacPhail: So one-third get immediate 7 percent price reduction on their interline shipping prices — yes? I'm just going to take this through, because we haven't canvassed any of this before. In fact, the group is getting smaller and smaller that is getting the 7 percent reduction right away. Is that true? One-third of the shippers who have interline agreements will get the 7 percent price reduction on their interline agreements immediately upon the transaction agreement being approved.

Hon. K. Falcon: Yes, those shippers will get the open gateway rate, which includes the 7 percent average tariff reduction for interline shippers.

J. MacPhail: And the other two-thirds have contracts. The minister says the majority will expire in a year. A year from when?

J. MacPhail: But some of them have contracts of up to five years is what the minister said. When do those people get the 7 percent price reduction? Do they have to wait for that contract to expire?

Hon. K. Falcon: For the very small percentage of terms that would not expire in this year, those would be longer-term agreements that were commercially negotiated. Presumably, there was a good reason to commercially negotiate those rates. There would presumably be some significant benefit for those shippers.

J. MacPhail: In the information that CN received from CIBC World Markets, did that commercially sensitive information include the expiry of interline agreements, contracts?

Hon. K. Falcon: Yes. To the member: I'm not going to get into any more of that level of detail. One thing I will share with the member is that I have, for the member's benefit, 14 pages of Hansard in which we've discussed extensively this 7 percent tariff reduction. I would be happy to share that with the member so that she can renew her memory with that information. She might find it helpful so that we can move on to other questions.

J. MacPhail: Oh, Mr. Chair, there are going to be 14 pages more of Hansard on these questions. The questions are not repetitive unless the minister doesn't give me an answer, but thanks to his political staff for that. Perhaps the minister's political staff could spend their time showing me where I've asked a question and the minister's answered it and then where I've repeated the question. Perhaps they could show that. Maybe Bob Virk could do that on his paid vacation. That would be useful work. He has a TV. He could do that.

The minister won't tell me whether CN…. The commercially sensitive information included the expiry dates of the contracts for the interline agreements? What we now find out is that, oh, CN isn't going to actually have to give the 7 percent price reduction right away.

In fact, only a third of a third of the business of B.C. Rail is going to get a price reduction. Let's see. A third of a third — what is that? A third of a third is a ninth. Oh God, I hope so, because my kid's going to kill me if I get that answer wrong. One-third times one-third is 1/9. So 1/9 of the business of B.C. Rail — current business — CN is going to have to give a price reduction to. I wonder if they knew in that commercially sensitive information that they got that they were going to only have to commit to 1/9 of a price reduction, because they actually got that information from CIBC World Markets, and no one else did. Oh, but the minister won't say that.

Let me ask this: did Charles River Associates know what the content of the commercially sensitive leaked information was?

J. MacPhail: Does the minister know what it is? Because I'll tell you, if Charles River Associates says that there was no problem that CN got information that shows the expiry of contracts, then that report is completely meaningless. Their view is completely meaningless, because now what we have is information that at least one-third of the $7 million…. No, I'm sorry.

Only one-third of the $7 million or the price reduction kicks in immediately, and two-thirds of it will flow after that. That's a nice little…. That's almost a trickle of a commitment that CN is making to the price reduction, and we've never had that information before — none.

What's the calculation of what CN is foregoing in interline shipping rates in '04?

Hon. K. Falcon: I've tried very, very hard to be patient with this member in trying to accommodate her questions, however bizarre and off base they have been. I would remind the member that we're here to discuss the estimates of my ministry, and I'm looking forward to when we can actually have that discussion.

J. MacPhail: How much is CN foregoing in revenue in 2004? Does the minister have any idea? He claimed that it was $7 million in total. Clearly, he must have done a calculation based on the expiry of the interline agreements. Otherwise, he couldn't calculate that. Why is that question bizarre? Maybe I could take guidance from this minister on why my questions are bizarre. I'd be happy to.

Now we know that CIBC World Markets leaked commercially sensitive information to CN about interline agreements, and all of a sudden CN's proposal costs a lot less than if they didn't have that commercially sensitive information — a lot less. It's not really $7 million in '04 at all that CN's committing to. It's a heck of a lot less that they'll have to commit to in delivering on their 7 percent price reduction.

What prevented the government or the evaluation committee or whoever did the negotiations from just saying that the 7 percent price reduction is in effect the day the transaction agreement is signed? What precluded the government from negotiating that?

Hon. K. Falcon: As I said to the member before and I find myself saying yet again, those are existing contracts that B.C. Rail is clearly going to honour, as the new rail operator would honour. Once those contracts conclude — and as we've pointed out to you, the overwhelming majority of them will conclude within this year — then they realize the full benefits. I don't know why this member continues to try to minimize the fact that there is a 7 percent, on average, tariff reduction for interline shippers. It's good news, apparently, to everybody but that member.

J. MacPhail: In the first 12 months that CN owns B.C. Rail, how much will the shippers save in the rate reduction?

Hon. K. Falcon: It's impossible to say an answer to that. There are commodity prices. Volume shipments can change. Shipping rates can go up and down. You've got different shippers, different agreements. There's no answer for the member on that.

Hon. K. Falcon: It's an average. I thought I already explained that. It will be in my previous notes.

J. MacPhail: Excuse me. Sorry, $7 million is an average? No, it's an absolute. The average rate reduction is 7 percent.

Who did the calculations on the $7 million? Was it CN or was it the government negotiators? I'm just trying to figure out who actually made that claim.

J. MacPhail: I heard the minister say he's wasting his time on this; he's not going to waste his time on this. I guess he'll have to live with that, won't he? I guess he'll just have to live with his behaviour. It is really shocking, but certainly, his reputation has taken a big hit. It certainly has. God almighty, if he thinks these questions are tough, Mr. Chair….

Is the $7 million lost revenue — which the minister has stated — entirely, to the penny, absorbed by CN?

Hon. K. Falcon: Mr. Chair, I'm left asking the question: what does it have to do with the Ministry of Transportation's budget?

He's asked for a ruling, Mr. Chair. Go ahead. Answer whether these questions are out of order.

The Chair: I would like to remind both members that we're here to debate vote 37 and the estimates within that. Policy could be part of it, but stay on track with the questions and move on. There has been some repetition of questions this afternoon. I believe the Chair has been allowing the debate to go back and forth. That's what I'd like to remind both members.

J. MacPhail: I'd be happy for the minister to demonstrate where I've asked the question about who is absorbing the full $7 million in rate reduction. That question has not been asked, Mr. Chair. The $7 million that the minister says is rate reduction — who is absorbing the cost of the forgone revenue? Is it entirely CN who is absorbing the cost of that forgone revenue?

Hon. K. Falcon: I'm not sure who else that member thinks it could possibly come from. Of course it comes from CN.

J. MacPhail: Why wouldn't the minister want to put good information on the record?

J. MacPhail: The minister says it's a dumb question. Really. Isn't that interesting? How much is the deal

worth? Outline for the public how much this deal is worth — how much gets booked for the taxpayer.

Hon. K. Falcon: I'm happy to talk about the disposition from proceeds. Of course, the member knows there's a $1 billion cash proceed within this transaction. There's about $25 million that will be deducted from that, representing the B.C. Railway Company cash requirements from proceeds and whatever transaction costs may arise. There's $532 million, which are the proceeds used to pay off B.C. Rail's debt, which of course the member is aware of. That's $532 million. There's a $261 million contribution to the B.C. Transportation Financing Authority multi-year capital program, and there is $182 million for reinvestment in northern and first nations communities and other initiatives, many of which have been outlined.

J. MacPhail: What's the ruling from the Canada Revenue Agency about the tax write-offs?

Hon. K. Falcon: That determination will be understood when CN files its income tax report, which will include utilization of some of the tax pools that are available as part of the partnership agreement. At that time there will be a determination made by CRA as to the eligibility of those respective tax losses.

J. MacPhail: I was told by the previous minister that CRA was making a ruling on that. Is that not the case? There's a charge against the budget of $255 million that can't be removed until that matter is determined.

Hon. K. Falcon: It's been confirmed with me that the previous minister hadn't said that. In fact, we've been pretty clear that those tax pools have been looked at to determine whether the business tax losses, which represent a portion of that, and the tax depreciation losses, which represent the other portion of that, are considered to be eligible losses that can be utilized by a company in a same and similar business, which CN is, to shelter their income by utilizing some of the losses that I've referenced. I think that answers that.

J. MacPhail: Actually, what the previous minister said was that CRA will make a determination. When I said that, the minister said: "Oh. No, I've confirmed that the previous minister didn't say that."

What is the value of the tax credit that's being made available to CN, and what happens if CN is not allowed to use that tax credit? What happens to the value of the deal that CN pays to the government?

Hon. K. Falcon: As the member probably knows, or may not know, in transactions of this type, whereby an acquiring company wishes to utilize some tax losses and tax depreciation losses associated with an operating entity like B.C. Rail, there is quite commonly provided an indemnity by the company which is being purchased to give comfort to the value being placed on those tax losses.

That's what's happened in this place. An indemnity has been provided to CN to ensure that should they not be able to realize the amounts that independent experts have concluded are valid amounts for them to utilize, then we would have to make good on whatever portion of that indemnity is required.

Hon. K. Falcon: To the member: the indemnity amount, of course, would determine what consideration is given by CRA to the tax pools once they're utilized. To speculate on what portion they may or may not approve is a challenge, but it could represent anything from a portion of that indemnity to the entire indemnity being utilized. There's no way of knowing, of course, until such time as CN files tax returns and we see whether the utilization of those pools is realized.

J. MacPhail: The Minister of Finance listed a $255 million indemnity — $255 million. How does it work? Just walk us through this. When the transaction agreement is signed, does CN cut a $1 billion cheque to the government? Or do they immediately absorb the $532 million debt and then cut a cheque of $468 million to the government? Is that how it works?

J. MacPhail: Yes, okay. I'm asking: how does that…? Oh, so then B.C. Rail pays the debt off — the $532 million? There's no ability for CN to get the lower-priced debt and just service it at the lower-priced rate? Can they go to market and get debt servicing at the same rate that the government does?

J. MacPhail: Yeah, I'm asking the question: so what do they do? Do they renegotiate the debt? Is CN's credit rating better or worse than the government's in terms of debt? This will all impact on the shippers' rates. The minister tried to make out earlier that this was like a philanthropic contribution that CN was making to the well-being of the province. I assume that when they take over the $532 million debt…. What will be their debt-servicing rate compared to the government's debt-servicing rate of that — that then gets passed on, that the shippers pay for?

The Chair: Member, I don't believe this question relates to the ministry. You're asking about what private industry will do. The railway is paying $1 billion to B.C. Rail, and how they do their own financing after that is up to CN Rail.

J. MacPhail: Well, that was a straight non-partisan interruption by the Chair, wasn't it? Just absolutely non-partisan.

What are the debt-servicing costs? What does the government anticipate, then, that the impact of the change of the debt servicing from the government to CN will have on shippers' rates?

Hon. K. Falcon: One thing we know for sure is that interline rates are going down by an average of 7 percent.

J. MacPhail: Did anyone do a calculation in this sale of B.C. Rail about the transfer of debt to CN, the costs of servicing and what that would mean for shippers' rates? Did anyone do that?

Hon. K. Falcon: My comment to the member would be that CN is a very successful company with enormous financial resources. CN is paying $1 billion cash for this investment. They don't need to take on any debt. There's no requirement for CN, indeed, to assume any debt. They have a very good debt-equity ratio in their firm. I urge you to pick up their annual report if you're interested in seeing more details.

J. MacPhail: CN is not taking on any more debt to buy this company? Is that what the minister is saying? Is that what he's saying? Just tell me what he just said. Their debt-equity ratio isn't as good as B.C. Rail's.

Hon. K. Falcon: What I said was that CN Rail will not be assuming any of the B.C. Rail debt. There is no requirement for them to take over that B.C. Rail debt. They're paying a billion dollars cash for the right to operate on the lines.

J. MacPhail: Mr. Chair, this commercially viable B.C. Rail operation was not taxpayer-supported debt. The shippers' rates covered all of the debt servicing of B.C. Rail. Their debt-to-equity ratio was better than any other rail line in the bidding process — no, about the same as one and better than others, including CN. The shippers' rates of B.C. Rail reflected the debt-to-equity ratio and the debt-servicing costs of a non-taxpayer debt in this Crown corporation, and the debt-servicing costs that B.C. Rail had to bear were directly related to the credit rating of the government of B.C.

The B.C. Rail deal does not include the transfer of the credit of that debt-servicing rate to CN. CN isn't in the business of charity. They are in debt. They are going to have to incur more debt to buy B.C. Rail, and they're going to be paying a different debt-servicing rate than what B.C. Rail did. All I wanted to know was whether that was a higher debt-servicing rate, because that would then be passed on to the shippers.

As we know, CN is not in the business of charity. The minister doesn't seem to understand that. In fact, his government probably hasn't done those calculations. And if they have, they won't come clean with them.

Hon. K. Falcon: CN pays the $1 billion, just over a billion dollars, to B.C. Rail on the day the transaction closes.

J. MacPhail: When does the government have to make good on its indemnification of the tax credits for CN?

Hon. K. Falcon: The member will recall that I just finished answering that earlier when I talked about CRA and the utilization of the tax pools and tax treatment and all that kind of thing.

J. MacPhail: So a ruling comes down, and the government either doesn't have to cut a cheque or, on the day the ruling comes down, the government cuts a cheque for the obligations under the indemnification?

Hon. K. Falcon: It's always a challenge for me to try to explain some very complex tax and legal issues and distill them in a way that will make some remote sense to the member and even to those folks that are listening.

Hon. K. Falcon: Yeah. One of the things I will encourage the member to do…. As she correctly pointed out in the three-year fiscal plan…. On page 60 of the Budget and Fiscal Plan it states — and I'm quoting directly for the member — that based on independent legal advice, we believe there is very low risk these indemnities will be called upon. That is pretty standard in these kinds of transactions, where B.C. Rail will seek independent legal advice and tax advice from experts who will determine whether these can be utilized by an operator like CN, which operates in the same and similar kind of business, which clearly meets the test of Revenue Canada. Those experts believe there's a very low risk these indemnities will be called upon.

J. MacPhail: What is the value of the indemnities listed in that little paragraph that the minister is just reading?

J. MacPhail: Does $255 million ring a bell with anyone over there — the indemnification?

Hon. K. Falcon: The value is actually $250 million. Member, I was wondering whether it was me who said $255 million, or was that you?

J. MacPhail: Not on that page. I'll find it. Maybe it's page 85 — I'm sorry I don't have a photographic memory — or something around there where it says clearly that the indemnification is $255 million.

So CN cuts a cheque for $1 billion. It's cash. How much of that gets booked immediately? That's what I'm trying to figure out. If the indemnification has no bearing whatsoever on the '04-05 books, or if the minister gets to book the $1 billion entirely, and it's only when CRA decides…. I'm told that CCRA has changed its name to CRA. Maybe I'm wrong on that.

J. MacPhail: Oh no, I'm right. I always like it when I'm right on the petty little details — inconsequential petty details.

So if CRA doesn't make a ruling for several years, then does the taxpayer get the full benefit of the billion bucks until CRA makes the ruling?

Hon. K. Falcon: The answer to that is yes. A cheque for just over a billion dollars will be cut, and that cheque goes to B.C. Rail. So yes, we do.

Hon. K. Falcon: That refers to transaction costs of approximately $14 million, and the balance that the member refers to is cash requirements for the B.C. Railway Company for ongoing operations.

Hon. K. Falcon: We'll provide a breakdown for the member. The financial adviser, $6 million. The shipper consultants, $250,000. Communications, $40,000. Legal counsel, $5.01 million. Accounting and auditing, $250,000. Actuarial work, $50,000. Captive insurance looks like $25,000. Real estate adviser, $600,000. Fairness opinion, $300,000. Internal expenses — this has to do with staff, travel, etc. — $300,000. Evaluation committee support costs, $15,000. Internal communications, $6,000. And a contingency of $5,000 — for a total of $14 million.

J. MacPhail: This is the first time I've heard of those costs. Maybe the minister has told other people about this. It costs 14 million bucks to sell B.C. Rail. If you add that to the $900,000 that the minister blew on the failed sale of the spur line to Roberts Bank, we have almost $15 million that it cost the taxpayer to sell B.C. Rail. This sale cost $15 million that British Columbians get zero benefit out of — zero. Fifteen million bucks. I'm not sure anybody knew that's how much it cost to sell B.C. Rail. What does a real estate adviser get for $600,000?

Hon. K. Falcon: Actually, that's a poor analogy. In fact, $14 million in transaction costs on a $1 billion deal is well and substantially below industry norms. If that member cares to check almost any major transaction that's taken place, she will find that this is easily one-half or two-thirds lower than standard transaction costs. It's actually very competitive and, in fact, highly defensible. I'm quite proud of the fact that the evaluation committee did such a good job in keeping transaction costs so low.

Member, do you want me to…? A sum of the numbers…. Because of the way they're written, I've read, frankly, some of them out incorrectly. When it says "0.3," I might have said $30,000 when it's $300,000. Do you want me to just quickly, for the record, get those right for you?

I'll quickly go through the exact same categories. Financial adviser, $6 million. Shipper consultants, $250,000. Communications, $400,000. Legal counsel, $5 million. Accounting and auditing, $250,000. Actuarial, $50,000. Captive insurance, $25,000. Real estate advisers, $600,000. Fairness opinion, $300,000. Internal expenses, $300,000. Evaluation committee with support costs, $150,000. Internal communications, $600,000. Contingency, $500,000 — for a total transaction cost of $14 million.

J. MacPhail: I'm not in any way comparing this to the $1 billion, because — let's face it — B.C. Rail over 90 years is worth $1 billion to the taxpayer and to the shippers. There is no net gain in economic value of this sale whatsoever. The minister's not been able to prove that at all compared to if B.C. Rail had stayed in operation. It's $15 million that the government has spent to break an election promise. Let's be clear: that's what it's about. It's $15 million. What did the government get for $600,000 for a real estate adviser?

Hon. K. Falcon: I can understand that this member hasn't had too much experience in major transactions like this, and as I say, this is actually exceptional value for a transaction of this size. I'm very proud of the fact that we have an evaluation committee that was able to keep costs so low on a transaction of this massive size — $1 billion.

Specifically with relation to the real estate, the biggest challenge for the real estate advisers in this particular process was that there are approximately 2,000 separate titles associated with the various track that traverses all across the province for the right-of-way. There was an enormous amount of work that had to be undertaken to identify all of those titles and the work that was associated with doing that.

The final thing I might say to the member, because I think the record needs to show this…. The member

continues to insist that there is no value associated with $14 million in transaction costs on a $1 billion deal. That's a bold statement for that member to make, because actually, most people would recognize that a $1 billion investment is a pretty exciting thing in British Columbia, especially when that $1 billion investment is really just the key to enter. There will be billions more invested in the track and infrastructure over the 90-year term of the agreement.

There will be, of course, almost $800 million in new taxes for communities up and down the line, and there are going to be port expansions, airport expansions and $135 million in northern development initiatives. There's going to be a first nations benefits trust. There are going to be refurbished cars in the number of 1,500. There are going to be 600 centre-beam cars. It is an unbelievable explosion of private sector investment that we have not seen in rail in the history of this province, and I am proud of the fact that that is what we have realized through the good work of our evaluation team.

J. MacPhail: Of course, when the minister's asked to prove that statement through a financial impact or economic impact analysis, he's got none. He's got absolutely none. Actually, the way business calculations are done about improvements is to look at the situation as a status quo compared to the change. The minister has no proof that the status quo would not have delivered exactly the same result and perhaps more because there's actually a return to the taxpayer, to the British Columbian, out of B.C. Rail. Now that goes to CN. He's got absolutely no proof of his statement whatsoever, let alone the fact that it's a broken promise.

What we have here is $14 million plus $900,000, so $15 million, that this government has spent to break a promise that they wouldn't sell B.C. Rail. The titles that required $600,000 of real estate advice to get — whose name is on those titles?

Hon. K. Falcon: First of all, let me comment on the last comment that member made in the comparison between the private sector option and the option she wishes to maintain, which is the government option. That is a fascinating discussion and debate I can't wait to have and continue to have….

Hon. K. Falcon: You bet I will. And one of the things I'll be campaigning on is the differences….

This member wishes to make sure the taxpayers are ultimately the ones that will bear the burden of losses. Those losses have been significant. I remind the member that there is $500 million of debt currently on the books, representing losses of the company.

Hon. K. Falcon: The member is saying: "Who incurred that?" Well, it was partially incurred when that member's government forced B.C. Rail to pay a dividend in the year in which it was losing money. That's not particularly helpful.

It also includes the $836 million that taxpayers had to write down on B.C. Rail over the last 15 years. What you see here is a pattern, a pattern where that member is very comfortable with taxpayers taking all those risks. Here we have a situation where we have a private partner who will come in as an operator, who will operate the railway and make billions of dollars of investment that we as a province don't have. Now, that member and her party apparently are quite prepared to take scarce tax resources from health care and education and funnel them into a money-losing railway operation.

Hon. K. Falcon: That is a fascinating thing. I am very much looking forward to…

Hon. K. Falcon: …having that debate. That's why I look forward to campaigning with the benefits of this deal.

Hon. K. Falcon: I always tell the truth. That's what I know makes that member feel so happy.

In conclusion, hopefully, the member now recognizes the contrast that we've established between public ownership and private sector ownership. I look forward to that debate continuing.

Hon. K. Falcon: Thank you, member, and I must apologize. In my enthusiasm for pointing out the distinction between a government-run railway and a private sector–run railway, I did actually forget the second part of your question. I do apologize for that.

The names on title would be names like B.C. Rail Ltd., B.C. Rail properties and other names. Those were all consolidated into the B.C. Railway Company.

Hon. K. Falcon: Yes, that is land owned by the Crown. What we were attempting to do, and what was done, was consolidate all of those titles into the B.C. Railway Company — which is, of course, a Crown corporation, which will continue to own the Crown land assets.

J. MacPhail: Hallelujah! It's Crown land. We finally got an answer that it's Crown land. When it's sold, the government is selling Crown land.

The minister thinks that this isn't useful. Well, I certainly think it's useful, Madam Chair, but I'm so dismayed to note the hour and move that the committee rise and report progress and ask leave to sit again.

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