Hansard -- Tuesday, October 25, 2005 p.m. -- Vol. 3, No. 6 (HTML)

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY


CONTENTS

	Routine Proceedings
		Page


Tributes		1179
	Dean George Curtis
	Hon. G. Campbell

Introductions by Members		1179

Introduction and First Reading of Bills		1180
	Children's Commission Act (Bill M201)
	A. Dix
	World Trade University Canada Establishment Act (Bill Pr401)
	R. Hawes

Statements (Standing Order 25B)		1180
	Rosa Parks
	K. Whittred
	Diwali
	C. James
	Vancouver Korean-Canadian Scholarship Foundation
	H. Bloy
	Nanaimo Area Land Trust
	L. Krog
	Ramadan
	J. Nuraney
	Island Aquathon
	J. Horgan

Oral Questions		1182
	Toxic materials on Canada Petroleum Corporation site in Abbotsford
	C. James
	Hon. B. Penner
	S. Simpson
	CN Rail train derailments
	D. Chudnovsky
	Hon. K. Falcon
	Terms of reference for child death review
	A. Dix
	Hon. W. Oppal
	M. Farnworth
	Ownership of shipping terminal on Ridley Island
	G. Coons
	Hon. K. Falcon
	Terms of sale of Terasen Gas to Kinder Morgan
	C. Evans
	Hon. R. Coleman
	Status of coastal forest industry
	B. Simpson
	Hon. R. Coleman
	Worker safety in forest industry
	C. Puchmayr
	Hon. M. de Jong
	Government policy for child death reviews
	Hon. S. Hagen

Point of Privilege (continued)		1187
	Hon. M. de Jong

Committee of Supply		1189
	Estimates: Ministry of Forests and Range and Minister Responsible for Housing (continued)
	B. Simpson
	Hon. R. Coleman
	H. Lali
	C. Trevena
	H. Bains

	Proceedings in the Douglas Fir Room

Committee of Supply		1208
	Estimates: Ministry of Transportation (continued)
	G. Coons
	Hon. K. Falcon

Hon. G. Campbell: Mr. Speaker, on a bit of a sombre note today, on the weekend Dean George Curtis passed away at the age of 99. Dean Curtis was the founding dean of the University of British Columbia law school. Just to put his length of service in context for people, every single entering class at the University of British Columbia had a lecture from Dean Curtis from 1945 to 2005.

He was an exceptional individual. I actually was privileged as I was a next-door neighbour to Dean Curtis for a long time. I didn't think of him as Dean; I thought of him as Dr. Curtis. Believe me, we did whatever he told us to do, whenever he told us. He was also recognized across the country for his legal mind and for his contribution in building the legal frameworks in Canada and, certainly, in British Columbia. Over 7,000 people went through the law school that he founded and helped to create and nurture over the years.

I would hope that the Legislature will not just show our respect to Dean Curtis and his family but will send our condolences to the family and thank him for his contribution. He's an Order of British Columbia recipient; he's an Order of Canada recipient. But most importantly, he is a citizen who always understood that his first responsibility was the community in which he lived. I hope the House will join me in sending their condolences to the Curtis family.

C. Puchmayr: I have some guests in the gallery today. Susan Briggs, who's the president of the Douglas College Faculty Association, is here. In another party of constituents I have Bruce McAndless-Davis, who is the minister of St. Aidan's Presbyterian Church, and his son Luke and their friend Matthew Monteith-Forsyth, who's visiting from Calgary. Please make them all welcome.

Hon. G. Campbell: Two introductions. First, I would like to welcome Don and Pearl Dunn from Vernon, who are here in Victoria. The Dunns have been exceptional community activists, actively involved in the hospital auxiliary and other community activities.

But this is what's critical: they have come to Victoria to celebrate their 45th anniversary this Friday, and I hope that the House will send them our congratulations.

I know that all parties in the province are interested in engaging young people in the political process and actively involving them in shaping the future of the province. I am very pleased today that we have in the Legislature the University of Victoria B.C. Young Liberals, and I hope the House will make them welcome.

H. Bains: Today in the gallery is my cousin from Calgary, Sukh Boparai, a very good friend, Pali Bedi, and their good friend from Victoria, Rick Nicholson, who are visiting us in the House today. Please join me in extending a warm welcome to them.

J. Rustad: Joining us in the House today are Jan Mastromatteo, a constituent and president of the Faculty Association of the College of New Caledonia in Prince George, and George Davison, the first vice-president of the Federation of Post-Secondary Educators of B.C., also from the Faculty Association of CNC. They're visiting Victoria today for a day of dialogue in post-secondary education. Would the House please join me in welcoming them and thanking them both and their colleagues across this province for their hard work and dedication.

S. Fraser: I have several introductions to make today. On behalf of the House, it gives me great pleasure to introduce distinguished guests from the interior: from the Tsay Keh Dene First Nation, Grand Chief Gordon Pierre; from the Takla First Nation, Chief John Allan French; from the Kwadacha First Nation, councillors Mary Hourie and Rene Benson; from the Gitxsan First Nation, Hereditary Chief Renna Benson and Hereditary Chief Gordon Sebastian; and from the Tl'azt'en First Nation, Justa Monk and Dave Porter, also from the First Nations Summit. They are here today working on preventing the destruction of…

…which is a word which means "Mother Caribou," and it's also known as Duncan Lake. Would you join me in welcoming them.

Hon. S. Hagen: I would like the members to join me in welcoming two individuals in the House today representing the Federation of Post-Secondary Educators of British Columbia. Visiting the Legislature from my hometown of Courtenay is Bill McConnell, who's president of the Faculty Association of North Island College, and James Brennan, president of the Faculty Association of Malaspina University College. Would the House please join me in making them welcome.

H. Bains: I have another introduction to make from my hometown. Terri Van Steinburg, president of Kwantlen University Faculty Association, is in the House. Please extend a warm welcome to Terri.

G. Robertson: I just want to extend a warm welcome on behalf of the House to all the other post-secondary educators, faculty who are here visiting the House today. For all that they do in our post-secondary education system, we support them.

A. Dix: I move that the bill, of which notice has been given in my name on the order paper, be introduced and read a first time now.

A. Dix: Hon. Speaker, the province has a special and fundamental role with respect to children in B.C., particularly with respect to children in care. The judge in the tragic Kayla John case described the role required of the Ministry of Children and Family Development to be that of a prudent parent.

No power currently held by the province is more fundamental than its obligation to support children, to protect children and to make choices with respect to children and families. That is why even in the best of circumstances, children need independent voices to protect their interests and government needs watchdogs to ensure that good decisions are made and that children are protected. And these are not the best of circumstances.

This bill, the Children's Commission Act, seeks to re-establish the British Columbia Children's Commission as a fully independent child welfare watchdog with the power to independently launch investigations, advocate on behalf of children and families, automatically review child deaths and critical injuries, and produce public reports and policy recommendations based on those reviews. Under the act, both the commissioner and deputy commissioners would be independent officers reporting directly to the Legislature.

Hon. Speaker, B.C. needs an independent children's commissioner again. I ask all members to review and support this bill. 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 M201, Children's Commission Act, 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 presented a bill intituled World Trade University Canada Establishment Act.

R. Hawes: I move that the bill, of which notice has been given on the order paper, be introduced and now read a first time.

R. Hawes: The World Trade University initiative was launched on the occasion of the third United Nations conference on least-developed countries, hosted by European Union headquarters at the European Parliament in May 2001, with the support of several agencies of the United Nations system as well as the World Trade Organization, the European Parliament and the Commonwealth Secretariat.

The global activities of the World Trade University initiative were recognized by the UN Secretary General, the General Assembly and a special memorandum with the United Nations conference on trade and development, as a global mechanism aimed at enhancing and expanding cooperation in international trade and human development in achieving the United Nations millennium development goals.

On February 8, 2005, our government — the government of British Columbia — signed a memorandum of understanding which indicated that it agreed to join efforts towards the establishment of the World Trade University global headquarters in British Columbia and that it is committed to providing technical assistance and support through the process of establishing the World Trade University as a not-for-profit organization in British Columbia.

In fact, in our throne speech the words were read by the Lieutenant-Governor that went: "In expanding our range of educational opportunities, we must also look to expanding our reach and knowledge beyond our borders." This government will build its new Asia-Pacific gateway strategy in the marriage of advanced education and trade. It will work to establish British Columbia as the new global home for the World Trade University, to be located in Chilliwack.

This university will offer university education at both the undergraduate and graduate levels in international trade, economics, business and related subjects, as well as offer certificates, diplomas and continuing education in these fields of study. It will also conduct applied research and development in these areas. For the Fraser Valley and all of British Columbia, this is wonderful news.

I move that the bill be referred to the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills.

Bill Pr401, World Trade University Canada Establishment Act, introduced, read a first time and referred to the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills.

K. Whittred: I rise in the House today to pay tribute to Rosa Parks, a person of great courage and inspiration behind the modern civil rights movement in the United States.

In Montgomery, Alabama, 50 years ago Mrs. Parks boarded a bus and proceeded to sit down on a seat designated for whites only. Tired of being humiliated and discriminated against because of the colour of her skin, she refused to give up her seat when a bus driver demanded she move for a white passenger.

For her actions, Mrs. Parks was arrested and charged with violating the racial segregation statutes, better known as the Jim Crow laws. She was convicted of disorderly conduct, fined, and eventually lost her job. This injustice set off a wave of resentment and catapulted Dr. Martin Luther King Jr. into the major civil rights leader of his time.

For the next 381 days Dr. King led a boycott against the Montgomery public transportation system. The boycott ended after the United States Supreme Court ruled that bus segregation was illegal. This decision was the catalyst that eventually led to the end of all racial segregation laws in the United States.

Mrs. Parks died yesterday at her home in Detroit. She was 92. Rosa Parks said that she wanted to be remembered as a person who wanted to be free and wanted others to be free. But she will be remembered for much more than this. Because of her courage against an unjust law, this soft-spoken woman not only changed the face of her country but also became a torch-bearer — worldwide, in the end — to fight prejudice.

C. James: I rise today in celebration of Diwali, the festival of lights. Originating in India, Diwali is celebrated through the exchange of gifts and sweets, the preparation of festive meals and the lighting of thousands of oil lamps for which this festival is named.

To some, it marks the beginning of a new year. On a deeper level, Diwali symbolizes the power of good. It serves as a reminder of our responsibility to live truthfully and with integrity and to bring those principles to bear on our daily lives.

Diwali is a joyous occasion. While it is rooted in the culture of India, Diwali has become a part of the diverse cultural fabric of British Columbia. This past weekend I was honoured to attend and participate in Diwali celebrations in the community of Burnaby. We enjoyed delicious food and were entertained by dancers, musicians and other performers of enormous talent.

Today I'd like to congratulate the board members and the volunteers of the VHP of British Columbia for organizing the annual Diwali cultural show once again this year. It was truly an event to remember.

Diwali celebrations are occurring all over our province. The celebration provides an opportunity for our diverse communities to come together in the spirit of friendship and peace. As we rejoice in each other's festivals and traditions, it gives us all a great sense of pride in the makeup of our multicultural province.

I'm proud to have attended these festivals and to have had the opportunity to partake in Diwali. I look forward to celebrating it in the years to come, and I would like the House to please join with me today in recognizing and celebrating the festival of Diwali.

H. Bloy: It is no secret that British Columbia is enriched by our cultural diversity and strengthened by its many immigrant groups. In Burquitlam one of the fastest-growing segments of our population is the Korean community.

A few weeks ago I had the pleasure of attending the announcement of this year's Vancouver Korean-Canadian Scholarship Foundation winners. This foundation was founded in 1999 as a non-profit organization dedicated to providing scholarships for qualifying students with Korean heritage. Money for the scholarships is raised through sponsors. The foundation introduced these scholarships to assist in the well-being of both the Korean community and the Canadian society to foster stronger ties between the two countries. Since their inception, the foundation has awarded more than $185,000 in scholarships to 170 students. This year 34 lucky recipients were awarded.

Personally, as someone who encourages post-secondary education, it has been my privilege to sponsor a scholarship to the tune of $1,000. I would like to congratulate Ms. Ray Kang, a UBC student in microbiology, who was awarded the scholarship in my name this year. Please join me in thanking the Vancouver Korean-Canadian Scholarship Foundation for their ongoing commitment in providing young British Columbians with an opportunity to further their education.

L. Krog: I rise today to ask the House to help me mark the tenth anniversary of the receipt of charitable tax status by a wonderful organization in Nanaimo, the Nanaimo Area Land Trust. This organization, which is run by a volunteer board with a wonderful executive director, Gail Adrienne, worked vigorously and long and hard to secure the purchase of what is known in Nanaimo as the Linley Valley — 145 acres of private land, which has created a city park.

This organization's mission is to promote and protect the natural values of land in the Nanaimo area. It has done that through acquisitions, through public education and through covenants. It promotes stewardship of property in the community, in conjunction with private land owners, and has worked extremely hard most recently with the Coalition to Save Mount Benson. For those who know Nanaimo, that is the mountain you see when you come into Nanaimo. NALT has been working vigorously with the private owner to attempt to secure its acquisition for public purposes.

This organization is an organization that deserves support in the Nanaimo community. It has received wonderful cooperation from various levels of government from time to time. It is this kind of community organization that devotes itself to good works and that

J. Nuraney: I am very, very pleased that this afternoon in the House we have seen statements from private members reflective of the diversity that we are celebrating in British Columbia.

Muslims around the world are presently observing the month of Ramadan. During this month, we fast from dawn to dusk. Apart from the abstinence from food and drinks, it is also the time for spiritual reflection. The concept is that of discipline — physical, moral and spiritual. Bad actions, immoral thoughts and unwarranted actions are avoided, and strict discipline of prayers is observed.

This week, which is the third week of abstinence, is of particular importance. It is believed that it was during the last ten days of the month of Ramadan that the holy Koran was revealed to Prophet Mohammed S.A.S. — may peace be upon him. There will be prayers offered throughout the night. It is considered to be an occasion of special reward.

The month of Ramadan is, therefore, a month of true discipline and reflection of the spirit of Islam, the religion of peace and harmony. It is a month of peace with God, oneself, others and the environment that we live in.

J. Horgan: I rise today to inform this House about a unique individual in my community of Langford, an ordinary man who consistently does extraordinary things. He has competed in triathlons and Ironman competitions. He has walked across India and climbed within 300 metres of the summit of Everest. In 1996 he became the first person to swim the 35-kilometre ferry route between Swartz Bay and Tsawwassen, but that was just a warmup.

On June 30 of this year, Rob Dyke entered the Strait of Juan de Fuca at Clover Point and began a three-month odyssey to swim the 1,400 kilometres around Vancouver Island. Averaging 20 kilometres a day, Rob braved stinging jellyfish, frigid waters, large waves and the odd hostile sea mammal to raise awareness about water safety. It takes a certain kind of motivation to spend five or six hours a day swimming kilometre after kilometre, but Rob and his Island aquatic team embarked on this daunting trek to raise money and awareness for the Canadian Red Cross swimming and boating programs.

Each year over 400 Canadians drown, and countless more are injured in recreational water activities. The aim of the Island aquatic trek was to draw attention to our many exceptional swimming and boating programs offered by the Canadian Red Cross in communities right across this country. Donations to Island Aquathon will help set up new community-based education programs for youth, and these programs will provide young people with the practical skills and leadership capabilities they will need to reduce water-related tragedies.

One of Rob's goals is to institute basic water safety programs in our public schools here in British Columbia, and I'm going to be supporting him in that endeavour. To find out more about this incredible Canadian, I invite those viewing and those in this House to visit their local Red Cross office and see what more they can find out about water safety programs. I want to thank Rob for his drive, his commitment and for showing us that anything is possible.

C. James: Can the Minister of Environment confirm that evidence of hoses leading directly into the municipal sewer system was discovered during the recent cleanup of the Canada Petroleum Corp.'s Abbotsford Industrial Avenue site?

Hon. B. Penner: I am pleased to announce that that cleanup has now been complete. The officials from the Ministry of Environment worked diligently throughout the summer and into September with good cooperation from local officials from the city of Abbotsford. There is an ongoing investigation that's taking place. I cannot confirm the question of the Leader of the Opposition at this time, but an ongoing investigation is underway, and additional charges may arise.

C. James: I'm certainly pleased to hear the cleanup is going on. I thank the minister for that. But I continue to be concerned about how long this issue has taken for the cleanup to occur. I don't believe this question will be related to the court case. I think it's possible for the minister to give this response.

Could you confirm that in 2003 we had Environment Ministry officials, conservation officers visiting the site with the property owner to gather information?

Hon. B. Penner: I don't have those precise dates in front of me. I can confirm that the ministry did act and did investigate. I think more than 11 charges were laid against CPC since this matter came to the attention of the ministry. Convictions were obtained. We pursued the matter through the courts. A fine was levied by the Provincial Court of British Columbia. As I've indicated, additional charges are possible.

C. James: This goes further, in fact. I'd like to ask a question about concerns for all of the public of British

Records show that between 1998 and 2004, over 16 million litres and over one million kilograms of toxic waste went into the site, but only a fraction can now be accounted for. Can the Minister of Environment please tell the public what happened to ten million litres and almost half a million kilograms of toxic waste that now appear to be missing?

Hon. B. Penner: I have asked the staff in the ministry to expedite work about possible changes to the regulatory framework so that we put businesses like CPC out of business before they ever get started, so they're not in a position to receive waste. That may take the form of an accreditation process or procedure, but that remains to be seen. The work has been expedited in the ministry, is ongoing and is something I'm very interested in.

I can confirm that CPC was fined $10,000 by the Provincial Court this summer. As you know, I issued an emergency order this summer, in August, to expedite the cleanup process. We mobilized crews. They worked throughout the weekends and throughout the hot months of the summer to deal with that site. In terms of where some of the materials may have gone, that is a matter of an ongoing investigation.

S. Simpson: The minister has known about this situation for at least seven months since it was reported in the media, including being made aware of the more than ten million litres of missing toxic materials. While the government has cleaned the site up, the minister has remained silent on the question of where those materials went. Is the minister telling us today that he has done nothing over the last seven months to determine where those toxic materials went and whether they were dumped down the sewer in Abbotsford?

Hon. B. Penner: I will just remind the critic that I was actually not appointed minister until June 16 of this year. This matter did come to my attention shortly after being appointed to the Ministry of Environment. I did sign the emergency order in August. The staff moved quickly. We've cleaned up the site.

I'm relieved, and I think all of us should take some pride in the fact that no people were injured or became ill as a result of this toxic site in Abbotsford. Clearly, as the courts have already confirmed, it was operating in violation of British Columbia's environmental laws. There is an ongoing investigation, and more charges may arise.

S. Simpson: If the minister is saying that he didn't get appointed until May, so consequently we can't hold the government and him accountable for something prior to that, I don't think that's good enough. Ten million litres of lost toxics and every indication that the ministry was aware of the problems of potential dumping of these toxics into the sewer system since 2003, and you did nothing about it until May of 2005. This raises serious questions about the confidence British Columbians can have in this ministry's ability to deal with these types of situations.

My question to the minister: can the minister assure British Columbians that there are no more similar sites percolating a toxic brew in this province and threatening communities across B.C.? If not, what is he going to do to make sure this doesn't occur again?

Hon. B. Penner: Since the hon. member is talking about some of the history of this case, I think it is important to point out that CPC went into business when the NDP government was running British Columbia. They started operating, unfortunately, in, I think, late 1994 or early 1995, and my information indicates they were never once investigated by the NDP. It was the B.C. Liberal government that investigated, laid charges, prosecuted, obtained convictions and then cleaned up that site.

D. Chudnovsky: Yesterday we learned of yet another CN derailment near the Cheakamus Canyon. That's ten CN derailments in the last three months: Squamish, Cheam View, Hixon, Boston Bar, two in the Cheakamus Canyon.

In August I asked the minister to intervene with his federal counterpart to ask him to bring forward a ministerial order limiting the length and weight of CN trains along the stretch of track near the Cheakamus Canyon and in other high-risk areas.

My question is to the Minister of Transportation. Has he requested such a ministerial order from the federal Minister of Transport?

Hon. K. Falcon: Actually, I want to say that I share that member's concern. In fact, today my office contacted CN. I will be meeting, as soon as we can arrange it, with the vice-president of CN to let them know that this province and this government remain concerned anytime you have a cluster of derailments, as that member mentioned.

The challenge I would have with the member's question, though, is that the member apparently has already concluded what the result of the derailment or the causal effect of the derailment was. One thing we know for sure is that it is being investigated by several federal agencies, including the federal Transportation Safety Board. I think it's incumbent upon us…. Until they complete the investigation and we actually see what the evidence suggested caused the derailment, it's not particularly helpful to speculate on what may or may not be the cause of the derailment.

D. Chudnovsky: Concern is not enough at this point. What British Columbians want is action. What

British Columbians want is action, and they want it now. We have obtained a copy of a rail safety advisory letter from the Transportation Safety Board recommending that Transport Canada assess CN's equipment handling, train length and tonnage instructions to ensure they're adequate for safe train operation. Will the minister now take action and ask his federal counterpart to issue a ministerial order limiting CN train weight and length pending further action by Transport Canada?

Hon. K. Falcon: I think, actually, the letter or the notice that the member refers to is very appropriate. That's exactly what the federal Transportation Safety Board does. They review these things on an ongoing basis. They review the specifics of a derailment, and they make recommendations coming out of that situation so that the railways can be guided going forward to ensure that they minimize these types of derailments happening in the future. That is exactly what they're doing; that's exactly what they should do. I can assure you that we are looking forward with great expectation to the conclusion of that investigation, so that we can all share that information publicly and make sure that CN acts in accordance with the recommendations.

A. Dix: My question is to the Attorney General. The minister is statutorily responsible for directing the child and youth officer.

Harvey Charlie is the grandfather of the child who died on September 4, 2002, in Port Alberni. Mr. Charlie has written directly to the Attorney General twice — on October 6 and again yesterday — requesting that the terms of reference for the reviews into his granddaughter's death be expanded to include the failure of the Ministry of Children and Family Development to protect the brother of the victim for five months after his sister's death. Will the Attorney General, who is the responsible minister in this matter, change his terms of reference for the review in response to the heartfelt wish of the family?

Hon. W. Oppal: The terms of reference for the child and youth officer were expanded, and it's our view that they're comprehensive enough to give the officer a full ambit and full discretion to determine all of the relevant details that will apprise this House as to the cause of death.

A. Dix: Well, with great respect, that wasn't the question to the Attorney General. The Ministry of Children and Family Development allowed the brother of the victim to live for five months under the lie that he had killed his sister. His grandfather is asking that answers be given. There are five reviews underway. None of them are allowed to address that fundamental question.

Will the Attorney General even deign to meet with the family, and will he change the terms of reference — his responsibility, not anyone else's — today?

Hon. W. Oppal: The issue that the hon. member refers to has to be explained in this particular way. During the course of the time the child was living there, the matter was still under investigation. The police were investigating at that time, and for that reason the child was there. I should also apprise the hon. member that what has happened is that the matter was before the courts at that time. Subsequently charges were laid, and a conviction was obtained.

M. Farnworth: I want to put the question to the Attorney General again. Will the Attorney General, who is responsible for the case, respect the wishes of the grandfather and have the terms of reference expanded so that their concerns are taken into account in the investigation? It's a very simple matter for the Attorney General to do, and he should indicate positively.

Hon. W. Oppal: As the member well knows, there is a process in place now. The government has asked Judge Gove, amongst others, to be involved in the process, as is a member of the opposition.

G. Coons: Last week, when questioned about Ridley Terminals, the Minister of Transportation said that this government was concerned about fair and open access to all users of Ridley. With the latest information about the inferior, low bid from an out-of-province company, lower than at least two others, I'm wondering why this government is not again concerned about the secrecy of the federal government and the selling-off of this public asset.

Can the minister please answer my question: did the province approach the federal government intending to buy Ridley Terminals?

Hon. K. Falcon: Actually, what happened was that in 2003, the federal government undertook a request for proposals to begin the process of disengaging from Ridley Terminals. At that point they were well along the path. Our government expressed the concern that we wanted to ensure, as that process unfolded, that in fact fair-and-open-access provisions would be part of that. We did intervene with the federal government. We indicated that we would look at the option of acquiring it, if that's what it took to protect the principle of fair and open access.

As a result of our due diligence — which was very, very extensive and which involved a third-party investigation of the assets, risks, liabilities, and annual and monthly losses in operating that thing — we made a

decision that we were not the best people to operate it but that what we would do as a province is ensure there are fair-and-open-access provisions for whoever is accessing Ridley. That is an assurance we received from the federal government. That is an assurance we will ensure is in place for the benefit of British Columbians.

G. Coons: Last week the minister also, as he knows, said that he is satisfied that the plan will work. The Vancouver Sun says that this sell-off makes no business sense, has no public policy purpose and makes no apparent benefit to Canadians. It doesn't make sense that this government is backing the bid by an independent company, Fortune Minerals, a junior mining company from Ontario, and not backing the group of B.C. companies wanting to purchase the terminal.

What made the minister change his mind on retaining open access to the port, and when was this decision made?

Hon. K. Falcon: Well, I am a little surprised. I mean, here we've got some investment that is looking to be made into British Columbia. This member appears to disparage that potential investment. There was actually a fair and open bidding process available. That was open to British Columbia companies. That was open to Ontario companies. That was open to companies right across this country.

I think that member…. I'm certain he is not suggesting that when you have fair and impartial bidding process, the government's role is to interfere with that and undermine that process. I'm quite certain that's not what that member is suggesting.

I can tell you, Mr. Speaker, that what we have done is this. We think it is very important for British Columbia's interests that there be fair and open access with whoever is operating Ridley Terminals. We have received assurance from the federal government that that will be the case, and we're continuing to work with the federal government to ensure that the language reflects the fact that there will be fair and open access for all users of Ridley Terminals.

C. Evans: Hon. Speaker, I think you'll remember that a couple of weeks ago I stood up here and asked a question of the Minister of Forests. I was asking him if there might not be some linkage between the sale of Terasen Gas and the softwood issue. The Minister of Forests kind of denigrated my position and said that I didn't really know what I was talking about and that he was involved in the big leagues and that he had back-channel negotiations that might be denigrated by my intervention.

Now, it isn't me, the member for Nelson-Creston. It would be the Prime Minister of Canada having discussions about linkage between energy and softwood. So my question is for the Minister of Forests: now that it's the Prime Minister of Canada, does the minister…? I'm just wondering if the minister agrees with the position of the Prime Minister of Canada that there might be linkage between energy and softwood.

Hon. R. Coleman: I hardly think my comments denigrated the member for Nelson-Creston at the time. If they did, I apologize. I thought we were having a healthy discussion about softwood at the time.

Just so the member knows, I believe that the trade file, which is a federal trade file…. If the Prime Minister chooses, with his advisers, to make linkages, that's part of the equation. The equation we have to be involved in, though, is seeing if we can get Quebec, Ontario, Alberta, Saskatchewan and other forest-producing provinces across the country to a national position that we could offer up, should negotiations ever begin.

I said at the time — and I still believe — in our discussions, in trying to get to a national position that might work for our producers and give us economic stability, a long-term agreement that would obviously not bring on Lumber 5…. I don't think linkage is healthy, because I think it's important that we as provinces put forward a position on softwood and not muddy the waters on other NAFTA issues so that we can get a long-term solution quicker for the members of our forest industry.

C. Evans: I accept the minister's apology. I certainly didn't mean he denigrated me. I thought he was denigrating my ideas, actually.

Moving on from the minister's apology to the issues of the day, I'm thrilled that the minister should answer the question that he thinks the Prime Minister should do the Prime Minister's job, and he accepts his position.

Now we have a situation where this minister might be the single most important cabinet minister in Canada at this moment in history because of a lovely accident of timing. Even if we think it is a good idea to sell Terasen, British Columbia's cabinet will get to sign off on that decision. If this minister — even if he thinks it's a good idea — were to have a show of good faith with the Americans and say to his cabinet, "Could we postpone any decision for 90 days to allow our friends south of the border to solve the softwood dispute before we answer this question?" he would be a hero. Hon. Speaker, he'd be my hero.

There are 60,000 woodworkers in British Columbia, there are half a dozen provinces and there's an entire country waiting for his answer. Will the minister ask his cabinet for a 90-day delay on Terasen to allow the Americans to solve softwood?

Hon. R. Coleman: At the risk of starting out very softly, like the other member did, about my re-

sponse…. Cabinet decisions, as the member knows, come before cabinet with recommendations, and they come before cabinet in confidentiality. As a cabinet minister, I would never predetermine what the decision of a cabinet of any province would be, particularly mine. I think we have healthy discussions around these issues in cabinet, and we make our decisions based on the information in front of us.

But through to the member, I was shivering slightly when you were intimating that you and I might be on the same page on too many issues, because that also would take away some of the healthy debate we have in the House.

B. Simpson: I would caution the member who started singing on the other side. We have a history here of the lights going out when people sing.

This was the second week in a row that a delegation from our forest sector went to the federal government for assistance. Last week a number of senior forestry executives asked for help for what they called "a perfect storm." This week a representative from the Coast Forest Products Association was in Ottawa because, according to him, the coastal forest industry is in crisis. Two weeks in a row we've had delegations go to Ottawa to get help for an industry in crisis.

To the Minister of Forests and Range: what is it that the province is not doing so that these delegations have to go to Ottawa independently of the leadership of the province on this issue?

Hon. R. Coleman: Nothing. But we do encourage our producers to have a conversation with Ottawa with regards to the issues that face them from time to time. The Coast Forest Products Association has two advocacy areas they take on a regular basis. One is federal; the other one is provincial.

If the member was listening to the debates earlier with the member for Surrey-Newton, he would have noticed that I did mention to the member that I had received a number of things inputted to me from the Coast Forest Products Association and other companies on the coast. I was taking that into account with a number of other issues. I've asked them to provide us with information on what they think might be a short-term fix, what might be a medium-term thing that we could do for the Coast Forest Products and also what the long-term fix is and to make sure that it's healthy long term.

We know that we're facing a crisis. The member and I have both discussed that in estimates. We know that the crisis faces us and that there are some things that government can do. I have directed staff to take those ideas, to get to work on them and to find quick solutions so that we can move forward on what we can do to help the Coast Forest Products on our coast to find long-term sustainable solutions for forestry in British Columbia.

B. Simpson: I'm glad to see that the minister has evolved in his thinking that we do have a crisis now. Now I'm wondering whether or not the minister actually sees that a big part of the crisis on the coast is this government's revitalization strategy. It's implicated by all of the parties on the coast as one of the reasons we have the crisis. Since 2001, 16 sawmills have shut down on the coast. We've had communities that have seen corporations leave, workers lose their jobs, contractors lose their jobs. That's what I'd call, over that four-year period, a dismal half-decade.

To the Minister of Forests and Range: will the minister admit that the restructuring strategy has not worked, and therefore they have to go back to the drawing board and rethink their strategy?

Hon. R. Coleman: I find it interesting coming from a member who recently said that corporations don't create jobs. Now he makes a comment that corporations evidently do create jobs. I would direct the member's attention to the Pearse report that was done a couple of years ago with regards to forestry in British Columbia, particularly the coast. That outlined to us that we would be facing some mill closures in British Columbia because of a number of items that face us. One is that the mills are older. Some of them do not cut the same lumber that the markets are buying today. Therefore, there has to be an adjustment within the marketplace.

I would also point him to the fact that part of that restructuring has to be that companies need to make investments. That's why we need to find solutions with the Coast Forest Products Association and the companies I've been sitting down with to find those short- and long-term solutions for forestry on the coast.

I'd also remind the member that the coast was very productive and very profitable, and so was the rest of B.C.'s forest industry, when we had a 64-cent dollar. Today it's in the 80s. These are all aspects that affect forestry. There's not just one panacea answer.

C. Puchmayr: Since we last discussed forest safety in the House in September, there have been five more fatalities in the forest industry. The government would agree with me that the total of now 32 is way too many. One is way too many.

Over a month ago the report released from the Western Fallers Association detailed reasons for the deaths in the forest industry. When the Minister of Labour was asked by the opposition what he would do to stop this trend, his answer was: "We are going to convene the B.C. Forest Safety Council. I'm going to suggest to them that we set some very specific objectives that we can measure over the course of the next weeks and months and attack this in detail."

Can the minister please tell this House what measurable objectives he's set for reducing worker fatalities since that meeting? What are his time lines for achieving them?

Hon. M. de Jong: Thanks to the member for the question. The numbers were bad then, as he's mentioned. They've gotten worse. The task force has begun its work in response to the meeting we had shortly after the member raised the question. I'm anticipating receipt of a preliminary report that will set some specific objectives, as we discussed earlier.

C. Puchmayr: A memo sent from a reviewing law firm to the head of the Forest Safety Council states quite clearly: "The existing provision of the act and the regulations are, quite frankly, a mess."

The memo continues to identify the mess as ambiguities and inconsistencies that do not fit the current realities of the forest sector. Clearly, the regulatory reform the government undertook overlooked major loopholes in forest worker safety provisions.

Will the minister commit to reform and harmonization of these regulations with the current forest legislation so that workers are not exposed to life-threatening practices in our forests?

Hon. M. de Jong: I thought the fallers report that the member and I discussed in this House not so long ago was valuable for a variety of reasons, but most importantly because it pointed out in great detail and effectively that there is no single answer here. To the extent that some of this may require some regulatory change, the government is committed to doing that. We told the task force that when the Minister of Forests and I met with them, and I can tell the member that here today.

There are other issues relating to the pine beetle, the amount of traffic on the road and some of the logging practices that are being employed in certain coastal areas, so there is a whole series and variety of issues that need to be considered by all of the partners involved. We're going to do that. I'm appreciative of the fact that the member is remaining abreast, and I'll endeavour to ensure that he remains abreast of the situation.

Hon. S. Hagen: Yesterday I took the following question on notice. "Can the Minister of Children and Family Development confirm that in July of 2005, the ministry changed its process for case reviews of death and critical injuries of children in care? Can he confirm that his new policy eliminates the right of independent reviewers to make recommendations?"

I now take this opportunity to provide the member with an answer to that question. There is absolutely no substance to the allegations made by the member opposite. A policy paper was delivered in July of 2005 entitled Improving Case Reviews and Audits. It provides the provincial director and/or the regional executive director an opportunity to add additional recommendations to a case review. They have ten days following the finalization of the review to make those recommendations.

In examining this policy, it took me back to the year 1998 when the reviewer actually was precluded from working on the recommendations. This government changed that, corrected that omission in 2003 and added the reviewer to the recommendation process.

To help the member out, I'll actually table those three documents now, and he can have a look at them.

Hon. M. de Jong: I rise to respond to the matter of privilege advanced by the member for Malahat–Juan de Fuca earlier today. He had earlier reserved his right to raise the matter of privilege — yesterday, October 24 — and at that time indicated, I think, to the House that his submissions would relate to an exchange in question period that took place in this chamber on October 19.

I hope the member and all members appreciate that I take the suggestion that I or anyone else would intentionally make a misleading statement in this House very seriously. The rules and conventions of this place have evolved over the centuries, and this Legislature's ability to operate effectively and do the people's business is dependent upon those rules and conventions being respected by all members.

The member alleges that on October 19, I breached the privilege enjoyed by members in the House by misleading him and the House with respect to the role and mandate of Mr. Vince Ready in matters relating to his appointment as an industrial inquiry commissioner and to an ongoing labour dispute. I must say in passing that it struck me as an interesting submission from the member, given that he had consistently refused to defend the integrity of this parliament by telling his political allies to obey the law passed by this House. Nonetheless….

Hon. M. de Jong: I will say with respect to the point he has raised…. Firstly, I should observe that our rules do call for such matters to be raised at the earliest opportunity. I only point that out insofar as that would

have been first thing Monday. Nonetheless, the House and the Chair are, I'm sure, aware of previous Speaker Schroeder's rulings as it relates to the timing and the procedural matters involved.

With respect, more importantly, to the substance of the allegation, I will take a moment to repeat the statement. I am relying on the transcript of the Hansard Blues, so hopefully I've got this correct. The statements that the member has cited in support of his submission to the Chair…. There are five of them.

The first — these are quotes attributable to me on the day in question: "I hope they didn't learn yesterday, because the appointment was made on October 6. He is fulfilling a role as an industrial inquiry commissioner, under the Labour Code." That's the first statement. The second: "Let me take a moment, though, to alert the Leader of the Opposition that on October 6, Mr. Ready was asked to do the following." Then I read the terms of reference. Number three: "To the extent that Mr. Ready, an eminent labour mediator — one of the country's leading labour mediators — has a task to do and he must complete that task by December 31 of this year, I'm pleased that he's seen fit to begin that exercise now."

The fourth statement: "…particularly when you consider that the terms of reference under which Mr. Ready is operating were laid before the public in this chamber on October 6." I should say with respect to that fourth statement that there may have been some confusion, because my recollection is that that was my answer in response to, actually, nine questions that the member put in rapid succession. If there was confusion, I accept responsibility for adding to it, but it would be helpful if there were one question as opposed to nine when we are engaged in the question period process.

Then finally, fifth: "It would take far too much time during this question period to read that. But I will, through the Clerks, now send the member a copy of the two pages which lay out, and have since October 6, the terms of reference by which Mr. Ready is operating."

The established practice in this chamber, as I recall it, is that the threshold necessary to establish that prima facie case for striking a committee to examine the conduct of a member is based on two tests — one, that the statement complained about was misleading and, secondly, that it was deliberately so. I'm going to suggest to you that, in fact, the submission by the hon. member fails in both respects.

I will again refer the Chair to the terms of reference. I'll table the document. Although I have done so previously, I'll do it as part of this submission and point out that it sets out precisely what Mr. Ready was asked to do. On the final page of that two-page document it confirms that "the industrial inquiry commission shall determine the persons it will consult on any or all of these matters in addition to the BCPSEA and BCTF." Lastly: "The industrial inquiry commission shall determine its own procedures as it deems necessary and advisable for the proper and efficient carrying out of its mandate and shall make every effort to report its findings to the Minister of Labour and Citizens' Services by no later than December 31, 2005."

I think you heard this submission from the hon. member earlier today, Mr. Speaker, but I would again alert you to page 2 of Mr. Ready's report — that report which was released last week and the first paragraph which reads:

The date that I can't account for in that paragraph is the first one, October 10. I think members will know I am relying upon the date October 6, which appears on the document — the original terms of reference as it relates to the work that Mr. Ready had commenced.

The member, I think, has made submissions of a sort that suggest he sees an inconsistency. I do not. I would suggest and submit to the Chair, Mr. Speaker, that the statements — each of the five of them — are accurate statements. They are not misleading and certainly not deliberately so in any way, shape or form.

I think the Chair is aware of previous rulings in the House on this matter and the fact that even as recently as March 23, 2004, a ruling from your predecessor on a similar privilege motion, the Chair pointed out in its decision, reported on pages 9553 of the Journals for March 23, 2004:

In that decision, Mr. Speaker, it was found that there was absolutely no evidence in possession of the Chair upon which to entertain the motion that the member at that time sought tabling in this chamber.

I'm going to suggest to you that notwithstanding the differences that obviously characterized the debate over the past two weeks and perhaps the differences that characterized how the government approached the matter versus the opposition's supposed approach, there was no misrepresentation to the House, no intent to mislead the House. And for that reason, the hon. member's application should fail.

Hon. M. de Jong: Continued debate in this chamber, Mr. Speaker, on the Ministry of Forests estimates, Committee of Supply. In the Douglas Fir Committee

Room, continued estimates, for the information of members, of the Ministry of Transportation.

ESTIMATES: MINISTRY OF FORESTS
AND RANGE AND MINISTER
RESPONSIBLE FOR HOUSING
(continued)

B. Simpson: I'd like to pursue some questions on the ministry's service plan with respect to first nations — specifically, the ministry's objective six, which states, "Increase first nations opportunities in the forest sector while respecting first nations interests," and the deliverables that are contained on page 45.

First question. Under the ministry's objectives, there are two parts of the objective: "Increase first nations opportunities in the forest sector"; and the second part, "while respecting first nations interests." However, the performance measure only measures the increase in first nations opportunities by measuring the number of agreements. Why was there not a measure for the satisfaction or something to do with respecting the first nations interests while conducting those agreements?

Hon. R. Coleman: In getting to an agreement, we need to respect the first nations to begin with. Secondly, we need to consult with them and meet their interests in order to get to an agreement. That's why we think it's a fairly good measurable to get to an agreement.

In addition to that, there are additional accommodations and standards that have to be met in relationship with first nations contained in the agreements. In order for it to be an ongoing process or agreement with them, that activity takes place.

The next part of that, of course, is that on other aspects of the forest industry, we have to — and we do — meet the standards as required by law on consultation and accommodation. It is an ongoing process all over the province with regards to all kinds of activities on the land base. Our measurement for measuring whether we're building a relationship with them is reaching agreements and meeting them with accommodation, then continuing to make those agreements work because we're respecting the agreements and respecting the accommodation, and then listening to them coming back with any concerns they may have with regards to those.

B. Simpson: I'm not quite sure there's a direct correlation. I guess I respectfully disagree with the minister that there's a direct correlation between signing an agreement, as a quantitative measure, and the quality of the process that got you to that agreement.

Now, the ministry does have qualitative measures. On page 49, it measures the public trust in the B.C. Forest Service as a qualitative measure. My question is: given — as the minister's already pointed out — that there are lots of factors involved in getting to first nations agreements and that the measure of the number of forest license or FRA agreements made is a quantitative measure, would it not, also, be of benefit to the public and to the ministry to measure the qualitative nature of the process? As the minister is well aware and as we will take a look at, there are some qualitative concerns around the process that's being undertaken.

Hon. R. Coleman: I would be curious to know how the member would think we would measure that. For us, if we enter into an agreement with somebody, that means we have two parties at the table that have actually agreed to do something. In getting to that agreement, we have a consultative process. We meet their interest. We accommodate. To give us a measurement of where we're actually providing stability on the land base and for first nations participation in the forest sector…. It's actually a pretty good measurement to ensure our operations respect first nations interests on the land base. We feel that our ministry is very good at that and continues to be so.

I think it would be very difficult to put a global measurable in place. The member would know that the capacity of different first nations is different. Community sizes are different. Needs one community might have as far as what their economic measures would be in an FRA versus others are actually quite adaptable as we work with first nations going through it.

We have, I think, a pretty good measurable here in that since 2003 we've signed over 50 agreements with first nations for forest and range agreements. That's a pretty effective standard. If the member knows or people understand how much work goes into the front end of an FRA on the whole aspect of accommodation and consultation, meeting with the first nations and negotiating with and then accommodating them, and doing that within the balance so that we don't put anybody's treaty rights or future discussions with government with regards to treaty at risk…. That has to be balanced off.

There is, frankly, a concern within many first nations communities that they be given the opportunity for the economic measure under forest and range agreements or arrangements with different ministries, while not being caught up in the treaty process at the same time so they can't actually bring those economic measures and benefits to their communities.

We think and have felt for some time that forest and range agreements have been a pretty good middle balance on that issue for them. Given that 50 communities have signed on with us, I think we have something that seems to be working. Whether there will be ad-

justments to it, as different court decisions come down or whatever with regards to whether there have to be different clauses added to these agreements over time, that's something we deal with all the time, because we are dealing with an evolution of a relationship.

I also believe that as we move forward over the next number of months and as the Ministry of Aboriginal Relations and Reconciliation comes forward with objectives for ministries under the new relationship, you will see those become additional measures within future service plans, as that is defined by that ministry as they work cross-government with the rest of us.

B. Simpson: You already measure the percentage of British Columbians who agree that the Forest Service can be trusted to protect and manage our public forests. You already measure the percentage of British Columbians who feel the Forest Service effectively protects and manages our public forests. Those are qualitative measures. It doesn't strike me as that odd or that difficult to have a measure in here that measures how much first nations trust the process by which they sign these agreements. That's the point that I'm making.

For the minister's edification, is the minister aware of one example of this: Chief Patrick Michell of the Stellat'en First Nation's comments when he signed a forest and range agreement? He was explicit, and he was deliberate, and he wanted his comment on the record. Is the minister aware of what that comment was?

Hon. R. Coleman: We may have the context, but we don't have the actual comment in front of us. I would be hesitant to comment on it without having it in front of me. I'm certainly glad to look at it, if the member wants to provide it for me, or we'll look it up and get the information and maybe pass comment or not, depending on whether we think we're being provocative in a discussion with a first nation at that point.

We do that measurement by polling, as I understand it. If the member's aware, for polling you need a cross-section sample. To break out one particular group in polling would, I suppose, be interesting. Would we also have to break out other groups within the polling, as well, as far as the measurement of the Forest Service? That measurable, as to how people feel about the Forest Service, is global for British Columbia. We would have to get more specific in our samples to go any further than that.

B. Simpson: For the minister, directly from Chief Patrick Michell, his comments were that he signed his FRA out of desperation.

Is the minister aware of the situation at Takla Lake First Nation? It had a forest licence of 80,000 cubic metres under the Takla Development Corporation, a forest license which was managed with due diligence and in full compliance, a forest license which was not renewed, because under forest range agreements now, the Takla Lake First Nation must be…. The words they used with me were that they were forced to enter into an FRA. It's the only thing that they've been pigeonholed into. That FRA is only 18,000 cubic metres.

The Chief of the Takla Lake First Nation says that they have now been relegated to first nations status because of the formula the government uses to determine FRAs and a funding formula and that it is, in fact, an extinguishment of their rights. By signing an FRA, they cannot legally challenge Ministry of Forests and Range administrative decisions. Chief Patrick Michell is saying he signed it out of desperation. The Takla Lake First Nation is refusing to sign, because if they do sign and go down to 18,000 cubic metres, that is insufficient for them to assist their communities to reach what is, under the new relationship, the goal of achieving the economic self-sufficiency in making first nations a strong economic partner.

There are two first nations. Both of them feel that the FRA puts them under duress and extinguishes their rights. Those are the kinds of things that first nations want a voice in and want to see reflected in the service plan. Would the minister please comment on that?

Hon. R. Coleman: There's nothing in a forest and range agreement that extinguishes anybody's rights. The comment from the particular individual that the member refers to is unfortunate. I don't have the history of who signed and who negotiated that agreement. If they felt they were under duress, that's highly unfortunate, because that's certainly not how this ministry operates with regards to forest and range agreements.

Under the new relationship, we are actually the first government in Canada to engage in economic measures with first nations. As a matter of fact, in this year's budget, $40 million will go into economic measures for forest and range agreements with first nations. These were introduced in 2003. As all agreements do, they're going to evolve, as is the new relationship with the leadership of first nations and the communities.

The member well knows that this is an ongoing, very complex piece of work. I am, frankly, honoured to be part of a government that is prepared to step up to the plate outside of the box in a new relationship with first nations. I'm proud of the fact that the Premier of this province has gone across the country, meeting with Premiers to explain to them how we're trying to create the economic measures and build a new relationship with first nations, both inside and outside the treaty process, so that we can share the revenue and provide for things like economic stability through workable accommodation, greater certainty for the forest and range industry and improved investor confidence on both sides of the coin.

The uncertainty on the land base hurts both first nations and non–first nations communities alike. To build stronger relationships with first nations through reconciliation and recognition, without first nations having to prove rights and title through the legal system…. That's important when it comes to the forest and range agreements. We're not trying to tie them into

giving up some other right, extinguishing any rights. We're trying to provide for those economic opportunities and economic social conditions by enabling economic diversification while they're in other processes so that they have the opportunity to be able to work and get confidence and trust in the government — and the province, basically.

Also, this could obviously be a building block to expediting some treaties, maybe. We don't know. Certainly, if you build that new relationship and inside that new relationship you evolve your agreements so that you can meet the concerns of individual first nations communities as you come through, you can adapt to court decisions that may have some relevance to them.

The fact is we need a flexible approach to first nation concerns around the condition of the agreement in term, tenure, opportunity and volume allocation. I will also undertake with the member to review the 80,000-cubic-metres issue that he brought to my ministry through to that community to see what the background is on it, because I think it would be inappropriate for me to speculate on all of that. I do find it's better to go and find the information itself.

At the same time, we've had a first nations summit with regard to the pine beetle up in Prince George. We've agreed to fund that through, so they can work out their plan and work out what they can do on the land base as a result of pine beetle. They're going to have that plan ready by spring, and we're funding them to do that. We're involving the first nations in the beetle action plan by having someone from the first nations come on board. We're waiting for the leadership of the first nations to give us the names that we would interview to make that selection.

I think, overall, having known many first nations people all my life — and some of them are still friends of mine — that objective six is very important. I think the only way we could measure it in the interim is by seeing whether we get successful agreements. At the same time, as we work through the new relationship, I think government is going to set additional goals and performance measures for all ministries in the new relationship as we move forward. I think that's an exceptional step forward to work with these communities.

B. Simpson: I think the minister's opinion of what's going on is one thing. The opinion of the first nations may be altogether another thing, and that's the point I'm getting at. What is the mechanism by which first nations voices — not the ministers' voices — are heard in this?

Again, I go back to the Takla Lake First Nation, where they stated…. I'm happy to hear the minister say that he will review that particular situation. The chief of that first nation stated: "The band cannot survive on this new relationship. Is the minister aware that forest and range agreements are signed under a form of duress? I'm told by first nations communities that they're told: 'If you don't sign, you go to the bottom of the pile.'"

Hon. R. Coleman: I don't have a case where somebody has put it that way to a first nation. I can certainly say that if a first nation isn't interested, there's not going to be any pressure put on them. We might say that we'll move on to the ones that want to negotiate and make a forest and range agreement rather than waste your time.

I can tell you that when I was in Prince George and in the Okanagan, I had a number of first nations come up to me and thank me for the process of the forest and range agreements. I didn't express any of my previous comments as being my own personal view of what the outlook was on the ground. My comments related to the new relationship and how proud I am with regard to the fact that we as a government are trying to do something new which will bring economic measures and stability to first nations communities.

I think we all as British Columbians, any one of us who's ever been in a first nation community that is suffering through excessive high unemployment and those issues, feel that we have a responsibility to work on the land base with those first nations to create opportunities if we can and to build capacity. That's what the new relationship is about. I think it's something that is pretty important to all of us.

There will be, as we go along, I guess, anecdotal stories of somebody who is unhappy. We try and deal with those when we find out about them. I assure the member that everything we do with first nations is with the utmost of respect, the utmost of understanding for their own positions on some issues. We try and work with those who want to use the forest and range agreements, because they see it as an important tool. Others may have something else that's an important tool for them. Through other ministries and through a new relationship, we will try and work to facilitate those tools as well.

B. Simpson: The minister said that the forest and range agreements with first nations are "a flexible approach." Are FRAs for first nations not based on a formula?

Hon. R. Coleman: We build in flexibility wherever possible. Obviously, we have a formula on revenue based on our capacity in any given year by budget, so we try and give our people some direction with regards to those formulas for what's available. The first nations bring issues around planning, around other possibilities and other uses of the land within the FRA to the table when we have these discussions.

We're working with the tools we have today. The tools we have today are FRAs. We measure those tools today. We do expect, as a new relationship develops with first nations and with the first nations communities and the first nations leadership through the ministry, that we will find additional tools that we can add

into…. We can do other economic measures with first nations. We don't know what they are today, so we have no way of measuring them today. I'm sure we'll come through a very healthy process with first nations to get there.

I welcome that. I welcome any idea that provides for us to be able to work with first nations and create economic opportunities on the land base for them, because that's what the new relationship is about. When we started forest and range agreements — back when we talked to the first nations about those — it was them and us talking about how we would like to have a tool to get on the land base that doesn't get caught in the treaty process so that we can never get there. What can we do that will not extinguish rights, that will not put them in a situation where their treaty rights or their land claims rights are extinguished, by actually working with them on opportunities on the existing land base in the meantime? That's what these forest and range agreements are trying to accomplish without putting those other legal aspects in any jeopardy.

B. Simpson: Well, I guess the courts also disagree with that interpretation. It is my understanding — and I'm not a lawyer, so the minister has ample opportunity to disabuse me of this — that on May 10, 2005, the B.C. Supreme Court rejected the forest and range agreement program as unconstitutional. In the findings of that court, it specifically said that the decision sends the Ministry of Forests back to the drawing board. I quote:

So you have a court decision which calls into question the forest and range agreement program. You have individual bands and first nations who have called the agreement into question. Yet there's no mechanism for the ministry to report on those kinds of findings. What will the minister do now that the court has made a decision on May 10 of this year that the forest and range agreement program is, as I understand it, unconstitutional? The ministry has to go back to the drawing board. That's more than evolution. That's a start-over.

Hon. R. Coleman: The Huu-ay-aht First Nation has successfully taken the ministry to court regarding the inadequacy of these agreements. The question of the member, I guess, is: how can this program continue given this judgment?

First of all, the member should be aware that the province is continuing discussion with the Huu-ay-aht. The province is also appealing this decision on this particular court case based on a number of questions of law. We feel that we have a good ground for appeal with regards to that, so the matter on that side is beyond the court.

The court did not state that the agreements were inadequate. It indicated that the Crown cannot impose overall policies upon first nations, but to substantially address first nation concerns, communication must be unique to each first nation, which goes back to my earlier discussion about measurements. Signing onto a forest and range agreement is a voluntary process, and since the May 10 decision the Ministry of Forests and Range has successfully negotiated agreements with four first nations — the Kaska, Osoyoos, Comox and Westbank.

B. Simpson: Again, the minister's comments about first nations signing on are different from the qualitative nature of the process by which they sign on. If I'm only allowed to get a forest and range agreement by one process, I don't have lots of options available to me. The court ruling was explicit that it was a complete failure of consultation. It wasn't a rejig-your-program; it was that the program did not work and that the government acted incorrectly and, I quote: "…must begin anew a proper consultation process."

I also find it intriguing that the minister says they're going to appeal this decision when the Premier, as a preface to the new relationship, said: "The new relationship will get us out of this cycle of litigation." We're perpetuating the cycle of litigation. We're not looking at these forest and range agreements from a qualitative, process-oriented approach. I fail to understand how, if you've created a box that you fit all first nations in — it's the only avenue for them to get access to the land base now and to get money — that that is, in itself, sufficient as a measure of quality. Where's the room for first nations in this measure to give feedback to the Crown that the process isn't working? I've given a number of illustrations of that already.

Again to the minister: instead of litigating yet again, why doesn't the Ministry of Forests and Range, with the new relationship in mind, sit down with first nations as part of their strategic operations and find out how to change the forest and range agreement program?

Hon. R. Coleman: That's exactly what goes on. The first nations are represented by a variety of groups, all of which the ministry meets with on a regular basis, as well as this government — like the First Nations Summit. We meet with the leadership. We meet with separate band councils. We meet with organizations that represent specific areas of first nations. All of that is always ongoing.

I hope the member isn't thinking that there's a panacea here, that the forest and range agreement should disappear because of a court decision that the province is appealing under a number of questions of law, under the advice of its solicitors. I hope he's not indicating that there is something that's all of a sudden going to remove all litigation out of the whole aspect of how first nations interact with the province and the country with regards to land claims and treaty negotiations.

What we've tried to do with forest and range agreements is to have something for first nations to give them some economic stability through a workable accommodation that doesn't compromise those other aspects. The other aspects of law, of negotiation, can continue on in parallel at the same time that we're creating greater certainty for people in first nations communities on an economic measure.

The member makes his own argument with regards to each first nation being different. Obviously, the four — the Kaska, the Osoyoos, the Comox and the Westbank — that have signed on since May 10 felt that there was a good reason for them to enter into a forest and range agreement.

Do we expect that we will review the agreements and look at clauses that accommodate certain aspects of law once the courts have dealt with them, as we move forward? Absolutely. Every agreement that the government deals with deals with that, in that regard. That is not uncommon.

Even as we go to interim measures on treaties and to agreements-in-principle to getting us closer and closer to treaty, there is an evolving process of changes, consultation, economic measures and identifying parcels of land and all of those things that specifically take place in each one of those areas. The forest and range agreements are specifically to be able to have an interim measure going on that does not put at jeopardy any of those other processes.

Like I said in my comments earlier, the court on the Huu-ay-aht decision didn't state the agreements were inadequate. It indicated the Crown cannot impose overall policies upon first nations. That's not our intent with forest and range agreements — to impose anything on a first nation. That's why it's a voluntary process. It will continue to be a voluntary process.

Some folks have made comment that they didn't think it was…. As the member said earlier on the one quote, well, I think that's really unfortunate, and we'll look into that. But I do believe that there is…. I was here during other debates in this House with regards to treaties, on both sides of this House, and I do know that this is a very complex aspect of not just my ministry but every ministry of government that has to do with the land base and relationships with first nations.

That is why the Premier has created the Ministry of Reconciliation that he has so that we can have that focus with the leadership of first nations. The New Relationship document is probably also an evolution taking place, but I think it's pretty great that many leaders, significant leaders, in first nations communities have signed on to it. I saw it myself in the relationship even with me as the forest minister and the Minister of Aboriginal Relations and Reconciliation in the meeting in Prince George and the work that was done there and how that's evolving.

I think that we need to be mindful of that evolution. As we come across problems along the way, we'll deal with those, but I'm quite comfortable that the measure on forest and range agreements is a voluntary economic measure for first nations to participate in while we go through these other processes.

Is it going to change? I'd be surprised if it didn't. I'd be very surprised if we didn't see an evolution take place in a very positive way with regards to the relationship with first nations, how we accommodate, how we build the treaty process and how we build those relationships long term for them and for us so that we can have that accommodation and reconciliation that is absolutely necessary for the future of British Columbia.

B. Simpson: To the minister, again, so that I'm not misunderstood: it's the minister's impression that I'm looking for a panacea, or as he said in the morning's discussions, a flick of a switch. None of my questions are intended to look for a flick-of-the-switch solution or a panacea. The minister himself has indicated that we need to evolve these things.

What I'm looking for today is a mechanism whereby the public can understand the degree of concern within first nations communities about the process by which these forest and range agreements have been negotiated. Again, I remind the minister that the court decision — and this is a direct quote from the court — was, "The government acted incorrectly and must begin anew a proper consultation process based upon consideration of appropriate criteria," and that has implications for the entire forest and range agreement program.

Be that as it may, even when agreements are in place, it does not mean that the first nations get what they want out of the agreement, and the minister had a letter written to him on September 12 of this year by the Kitkatla First Nation, who have signed an agreement but cannot get that agreement fulfilled. I quote directly from that letter, which the minister has: "Because of our frustration in meeting a fair and good-faith agreement with your ministry in finalizing these operations," they are writing to him as the minister, "it is our position that the Ministry of Forests and B.C. Timber Sales have not completed their obligation as it relates to the spirit and intent of the forest and range agreement for the establishment of a forest tenure for the Kitselas nation."

It goes on to say that there is insufficient chart area available to execute the first nations FRA, and then it goes on: "We need the province of British Columbia to honour its obligations in implementing this agreement." To the minister, there's a comment in here that I think is quite telling, given what we went through last week. It states: "For your information, since signing our

FRA, we have had in excess of 80 meetings and correspondence with the Ministry of Forests and B.C. Timber Sales management and staff and have made no progress on determining where our operating areas will be."

In an earlier debate in this House, 35 failed negotiations between the teachers and their employers were called a broken collective bargaining system. Madam Chair, 80 meetings, I would suggest, is a broken bargaining system, even when you do have a forest and range agreement in place. So, again, to the minister: what avenue do first nations have to get fair mediation when they have a forest and range agreement in place and the intent of the forest and range agreement is not fulfilled?

Hon. R. Coleman: My understanding is that within the last week, we have reached an agreement on an operating area with the Kitkatla, we're moving forward with the agreement, and the parties are satisfied. That's happened in the last week or so, and I will confirm that for the member, but that's the advice that I've received.

B. Simpson: I'm glad to hear that that's the case, but again, it goes to the process issue that I raised earlier. It took a letter to the minister, and according to their own count, it took 80 meetings and letters in order to get due diligence paid to their concerns. So we have concerns on the front end of forest and range agreements, we have concerns about the process of forest and range agreements, and we have concerns by the court that forest and range agreements are unconstitutional and abrogate the requirement to consult. We then have examples, and this is only one of a number of examples of forest and range agreements that are brought under question even after they're signed.

Again to the minister. He has qualitative measures inside the ministry service plan now. Why not add a qualitative measure in here and hold the government accountable? Because that's what Ministry of Forests service plans are about: holding the government accountable to measures, holding the government accountable to due process, fair process and a qualitative measure of process, not just whether the agreements are signed or not. I think that's fair, and I think it's a fair dealing on the part of first nations.

Hon. R. Coleman: In actual fact, the 80 meetings and correspondence may actually point to good due process and a relationship with the first nation in getting there, because as we identify an operating area, there are other interests on the land that are affected. It may be somebody's tenure area. It may be a TSA. It may be a TFL. That work has to be done. There has to be a consultation process with the first nations and discussion as to whether that particular operating area has the fibre or the economic measure they're looking for in the forest and range agreement. There's other public that has to be consulted through that process.

The process of getting to the signature on a forest and range agreement and then getting it up and running is a significantly complicated process and requires a pretty good working relationship between the parties to get there. That's why I think it's a good measure. If the member has an opinion otherwise about it, I'm happy to sit here this afternoon and let him read into the record every negative comment in a letter that he wishes to. If he wants to do it all at once, then I'll comment on them all at once. That's fine.

That process isn't going to get us where we are today. We have The New Relationship document with first nations. We've done more in four years in building a relationship with first nations than any government that I ever watched in British Columbia. We are building on that as a group of people who actually believe in economic measures for folks, and not compromising the other rights and title that they have on the land and the treaty process. We are trying to take that leadership not only in British Columbia, but across the country, and that's an evolving process. If the member wants to know how the Minister of Aboriginal Relations and Reconciliation is going to measure that, bring it up with the minister in that particular ministry.

We measure our relationship because we have meetings with all of the parties in the first nations on a regular basis. We deal with the communities one-on-one on these agreements, with extensive consultation and work, and we work together. If you weren't getting on the land base and you weren't getting through your consultation process and you weren't having any successes, then I would gladly stand here and let the members say that we aren't actually measuring our relationship with first nations. But when I see the number go up each and every year of offers to first nations and signed agreements with first nations on forest and range agreements, I think we're making progress. At the same time, so does the public.

Frankly, I think the public believes that the new relationship is a good idea. I think that they believe The New Relationship document, the work we do with the first nations' leadership and how we process through this are good ideas. I think it's good for people to try to get there, and that's all we're doing. In the meantime, we're giving people opportunities for economic measures on the land base that don't compromise any of those other values that they may have, whether it be legal or otherwise. I think that's important.

I think the measurement we have is adequate. The member may disagree, and I'm okay with that. If there are people that are unhappy with forest and range agreements and how the process works…. I know and we know and the member probably knows, having been around the industry, that sometimes it's very frustrating, the process we have to go through to get on to the land base — particularly when it involves a number of parties, not just a bipartisan relationship. Sometimes it's actually competing interests between two first nations in the same land base, plus other communities, plus other people that may have tenures that all have

to be reconciled in order to get to the success of creating a forest and range agreement.

This is not a simple process. The agreement may look like a document that has sort of boilerplate sections and stuff, but I can tell you that, to be successful, the work that goes into getting there is staggering. If you weren't able to achieve that with these first nations, obviously you'd be concerned about your relationship, but we are having successes — prior to and since the Huu-ay-aht decision.

At the same time, I'm not going to comment, and I'm not going to debate the comments of a judgment in the courts that's being appealed by the province, because our counsel tells us that they think there are some errors in law here. That's their job. Our job is not to do that part of the business of government. Our job is to find opportunities on the land base through forest and range agreements under extensive consultation and accommodation to get economic measures on the ground without compromising their treaty rights, their land title rights, or any other legal opportunities they may have available to them.

We want to be able to have this as a measure in between so that we're not actually saying we'll wait until that whole process is complete on some treaty before we actually do something with a first nation that benefits the people in the communities.

B. Simpson: I take it as a no — that there won't be a qualitative measure. Fair enough. We can agree to disagree on that. The minister should, as I'm sure he expects me to, be a focal point for a lot of the concerns. That's why those concerns are being read into the record. It's not an exercise for the sake of an exercise. It's an exercise in my role and capacity as an opposition member to bring voices into this Legislature that feel they have not been heard. That is my role in the parliamentary process.

I wish to correct something that the minister had indicated earlier on, where he said, again, twisting my words, that if I think there will be an end to litigation, then I'm kidding myself. What I read into the record was the Premier's comment that the new relationship was intended to: "Get us out of this cycle of litigation." Those were the Premier's words, not mine. If anybody's words are being brought into question about an end to litigation, then the minister should take it up with the leader of his party.

Let me come to a couple of other things. I have a question around the numbers that are being bandied about. In the Liberal platform it states that there were 93 forestry agreements with first nations. In the measure that was delivered in the service plan, it's only 47. What's the discrepancy?

Hon. R. Coleman: A clarification to the member. Since September 2002, the Ministry of Forests and Range has signed agreements with 94 first nations to provide access to over 15.2 million cubic metres of timber and to share forest revenues of over $106 million. These agreements are two-fold.

Forest and range agreements. These agreements introduced in 2003 provide for revenue-sharing and forest tenure opportunities. The tenure volume comes from unlogged timber from existing forest licences, and basically, that would also be made available from the re-allocation process of the takeback.

In addition to that, a May 2002 amendment to the Forest Act allows a Minister of Forests to invite first nations to apply for forest licences without competition. Between the two, there are 94 agreements signed with first nations.

B. Simpson: Thank you for that clarification. Is the minister aware of first nations' opposition to the Ainsworth and CH Anderson licences in the Prince George–Vanderhoof area?

Hon. R. Coleman: There has been a very extensive consultation process on both of those licences, and I'm sure the member is aware of that. There is still some concern with some first nations with regards to that, and we're working with them to solve those concerns.

B. Simpson: Well, again, perception is reality. The perception and the reason for the opposition among the first nations is, in fact, that there has been no consultation. What the Chiefs there are telling me…. The phrase they use is "a failure to consult" — not in the southern part. In the southern part, I am being told by the Nazko band and others, that there has been due diligence and consultation. I'm talking explicitly and specifically about the Prince George–Vanderhoof licensees. Again, these are not my words; these are the words given to me by the representatives of the Carrier-Sekani Tribal Council and by the Stellat'en that it's been a failure to consult and "there will be significant negative ramifications if the ministry proceeds with these licences."

Hon. R. Coleman: There's been very extensive consultation both in the north and the area. We are aware of some concerns with some of the first nations with regards to that. Government has a responsibility to make the effort to consult and accommodate under the law. Before we would award a licence, we would be comfortable with our legal position relative to whether we have consulted under the legal parameters of what consultation would include.

We have been through that process. That in itself, to be fair, is also an evolving process, because when the courts brought forward the whole notion of consultation and accommodation, they didn't define it. So we've been defining it as we move on the land base, frankly, as different court cases take place, because it's not clearly defined.

I am advised that we've had extensive consultation on this. I am also advised by the deputy minister that if we are allowed to, if we don't think there's anything of any proprietary nature that has to be protected by

freedom of information, we're more than happy to give a copy of that consultation process to the member.

B. Simpson: I would appreciate that. As the minister can imagine, in my role ignorance is not bliss. It's very helpful if I am informed, because then I can do my job better. So I would appreciate that and look forward to that.

I'll turn the opportunity to question the minister over to one of my colleagues.

H. Lali: Before I begin, I'd like to take this opportunity to actually say hello to the staff members who are there with the minister. I recognize some faces from the past, when I was an MLA before. It's good to see you folks again. And I think the hon. minister across the way wants to trade ties with me afterwards.

I want to begin by just making a comment, actually. I think the minister made a comment earlier that this present government has done more for aboriginal people in terms of economics than any other government in the history of British Columbia. I think that's a statement that can be successfully challenged. But anyway, having said that, I'm not going to actually talk and ask questions about the aboriginal issues that the forestry critic raised earlier.

Rather, I want to ask the minister in terms of the cutbacks that took place in the four years the Liberal government has been in office and with the closure of a number of forestry offices or departments in the regions…. I just want to point out that at one point in time in the Merritt TSA…. It was combined into one under the NDP. Lillooet and Merritt became one timber supply area. In 2001 there were 109 folks who worked for the forestry department in that TSA, looking after the land base and the forestry of the area. After the cuts that came into existence under the Liberal government, it was down at one point to, I think, 46 folks. I'd like the minister to tell me: how many people work for the Ministry of Forests in the Merritt timber supply area in 2005?

Hon. R. Coleman: First of all, through to the members in this House, the member wasn't referring to me as the person that had designs on his tie. It was another member in the chamber. It just wouldn't go with this.

With regards to first nations, I think you couched it a little bit differently than I said it. But I do believe the new relationship is a huge step forward. I do believe a government taking that step and getting the sign-on by the leadership of first nations is an incredible step in the evolution of a very important relationship to the future of British Columbia.

With regards to the member's question, the member might be noticing the odd e-mail going out, and we will endeavour to get the exact number for the member. I don't have it at my fingertips.

H. Lali: I'll wait for those numbers. The numbers that I've got are the ones for 2004. They were down to — I believe it was — the high 40s from a high of 109 in 2001. Obviously, the staff in the Ministry of Forests at the local level feel that they have extra pressures because there aren't the number of hands available to actually do the forestry prescriptions and all the work that needs to be done, not only on the administrative side but also in terms of looking after and being the stewards of our forestry land base. So the reductions in the numbers of staff obviously have had a negative impact in terms of how the job is actually going to be done.

Now with the onslaught, obviously, of the pine beetle that's moving in a big way into the southern interior region, I would like the minister to tell me how those staff reductions and the cuts to the Ministry of Forests at the local level would have had an effect in terms of battling the onslaught of the pine beetle infestation.

Hon. R. Coleman: First of all, we could have had 20,000 people on staff in that area of the province, and we wouldn't have been able to stop the mountain pine beetle. So the reality there is that…. I can go back in history, but I don't think I will, with regard to the historical perspective of this particular blight on our forest.

In addition to that, what we do is, as we've done uplift with regard to the beetle activity in the interior…. We've also received an uplift in order to add staff to handle the increased volume. However, I should have the member understand that most of the work is done by the licensees who do the forest plans on the ground. They're the actual ones who do the harvest and the reforestation. Our folks deal with the process side and then the audit to make sure that they're doing their job on the land base.

As a result of lift, I would imagine that the licensees have also added additional foresters and staff in order for them to be able to handle the significant increase in the annual allowable cut that's been through that area.

H. Lali: Getting back to the issue of the closure of the forestry office in Lillooet, could the minister provide me with some information as to what the rationale was for actually closing down the Lillooet office in terms of the delivery of service? What would the rationale be, and how would the replacement for the delivery of service in that neck of the woods — out of Merritt, or even out of the Kamloops office — replace the service that was available there?

I guess it's a two-pointed question. One is the rationale, and two is what the replacement delivery mechanism is.

Hon. R. Coleman: In 2001 every ministry was challenged to find certain cost savings and efficiencies in order to get the financial house of government in order. This ministry was no different. They were tasked with how they would look at their offices, their efficiencies,

their consolidations, driving distances. I guess at the time recommendations would have been made to the minister through that process, and decisions were made to deal with the changes in the layout of where those offices were and how they were staffed. Then the ministry and its ministry staff did, frankly, a good job of adjusting.

H. Lali: It doesn't really answer my question. I'm going to rephrase it in a different way for the minister. Could the minister tell me: was cost the only driver in terms of the reduction that took place or actually the removal of the office out of Lillooet? If it was, then I would like the minister to state so. What kind of savings did they realize as a result of shutting down the office there?

Hon. R. Coleman: A number of things drove this. First of all, cost efficiencies. Were we delivering with the right number of people for the right volume of cut or business in particular areas of the province, or were there consolidations that should take place?

I can't tell the member today what the numbers and the savings were, but we will get them to him, because frankly, that happened in 2001. We wouldn't have that data with us in estimates today, because we're basically dealing with the estimates of this year's budget and the service plan, etc. I will undertake to the member to get that — whatever we want to call it — cost-benefit analysis or whatever it is. We will get the numbers that were asked for and get them to the member.

H. Lali: I'd like to thank the minister for committing to provide those figures, the cost-benefit analysis, to me at a later date.

In terms of the service for the Ministry of Forests, that is being provided for the Lillooet half of what was the Lillooet TSA. I would like to ask the minister: what mechanism is in place? Where do people drive up from? Are they all from Merritt, or are there some people that come in from Kamloops and area and go out to the Lillooet TSA to deliver the service on behalf of the Ministry of Forests that they once did?

Could you tell me how many people, and if it's on a regular basis? Is it weekly, or is it daily? What kind of presence is there in terms of looking after the day-to-day and week-to-week interests of the Ministry of Forests on behalf of the people?

Hon. R. Coleman: There's a field office in Lillooet. It's also serviced by folks from Kamloops and from Merritt, and also by staff from B.C. Timber Sales and field operations. This particular area has always had some service from Kamloops, with staff, with regards to the processes over there.

I couldn't tell the member, and I don't think we could today tell the member, who's gone in there on any given day in the last six months, because we don't have that information available to us. We do have 3,400 employees. However, I can tell the member that they're serviced in that manner. If he wants further detail, maybe he could get to me what detail he would like, and we'll endeavour to get that information for him.

H. Lali: I'm just going to switch here. I want to talk briefly about the small operators, often referred to as the gyppo operators, folks who do salvage work and the small family-run, value-added operations. They exist in pretty well every community in rural British Columbia. There are dozens and dozens of them all throughout the province. These folks, obviously in terms of employing the number of people or the amount of wood that they have to work with, are actually significantly higher than the majors and the breakdown facilities in the number of jobs that are created.

Everywhere I go in the province these small operators are all complaining that they're not getting an adequate supply of wood from the ministry, whether they're looking for salvage wood or even any kind of a direct award of any sort to feed their operations to keep those jobs alive. Obviously, the big companies also refuse to actually sell them some of the wood, even if they're willing to pay a premium for purchasing that wood.

I'd like the minister to explain what this government and this minister are doing to remedy the situation so that these small operators, these family-run operators, can stay in existence and continue to make money and provide jobs to so many of the small rural communities in the province, where often there is no major company or a larger breakdown forest facility in their particular locale or even in their town. Rather, some of these communities actually depend on these value-added operations and these small operators.

I'd like the minister to tell me what this government is doing to put more wood into their hands, and what this minister is doing as well.

Hon. R. Coleman: I'm going to give him some figures here, but even once that is said, there are some small operators who, if they had a certain type of tender, would still need to trade logs with other people to get the fibre they would want for their particular product line. Some people are into different…. Like, one cutblock might not include enough of a certain type of log for their use.

Having said that, and before I go forward, in the Cascades forest district, which is the Merritt and Lillooet area, there are 47 people in the district office in Merritt. In field offices in Princeton, there are four. In Lillooet, there are five. In addition to that, there are another 14 B.C. Timber Sales personnel, for a total of 70 staff in the region. Then there are the folks that come in from Kamloops as well.

B.C. Timber Sales has increased sales each year since 2001, moving from 9 million to over 15 million cubic metres this fiscal year. This volume will be sold in about 600 different sales ranging from as low as 2,500 cubic metres to over 100,000 cubic metres. That's because we want the size of the sale to reflect the dif-

ferent opportunities that different operators may want to bid on, on the land base. Of the 600 total sales, 225 are planned to under 15,000 cubic metres, and over 100 are under 10,000 cubic metres.

At the same time, we do have a satisfactory small-scale salvage program to address mainly beetle- and fire-killed timber. The goals of the small-scale salvage program include the harvesting and utilization of dead or damaged timber. Also included in those goals is to help reduce the spread of additional disease in Crown timber stands.

As the name suggests, the program is focused on smaller operations and volumes of timber that would otherwise go unharvested. There have been some movements on some of that. The program itself is used dramatically today versus what it might have been five years ago. During the 2004-2005 period, approximately 1.7 million cubic metres of timber was sold under these licences.

H. Lali: The minister started off by actually talking about some of these small operators who have tenure they can trade. I'm not worried about that; that's not where the problem lies. If they already have some tenure, some allotment of wood, obviously, it's understandable that they're going to trade. That's not the issue here.

The issue is when they don't have the tenure or they run out and they can't get a replacement and they're looking to actually purchase whatever wood they need to feed their value-added facility. They will go to the ministry to see if they can't pick something up — and obviously they can't, whether it's from the pine beetle or elsewhere.

But to the point where they want to purchase from some of the majors who have tenure — and they're willing to pay a fair dollar to pick up that timber so they can feed their operations and keep those jobs alive in those small communities — those big operations refuse to do so. Rather, they'll sell that wood at a lower price, whether they ship it off to the United States or Japan or elsewhere. They're not willing to feed those small operations for a hefty price, to keep those operations alive.

That's where the problem lies, and that's where I'm directing my question. What are the minister and this government doing to make sure that that situation is alleviated so that these small operations in these small communities where they employ a considerable number of people will not die?

Hon. R. Coleman: In most cases, businesses make business decisions. The licensee that has the logs makes decisions on how they sort, what they'll sell, and that sort of thing. From time to time, though, we do come across situations where that isn't necessarily working, or we're made aware of them. When we do that, I usually…. What I do is ask the officials within the ministry to take a look at it to see if there's another solution to that concern. If the member has specific ones he could give me, he could either drop me a line or just tell me later who they are, and I will have our guys look into specific ones.

For the most part, the commercial business decision side works. There are some times when the size of the sort may not be economically viable for the people that have got the logs versus the small amount of fibre that somebody wants for a specialty product, and we've managed on a number of occasions to work through those problems. If the member has some of those, I'm more than happy to look at them.

H. Lali: I will take the minister up on the offer, aside from estimates, to be able to do that. First I'll have to get permission from a lot of these small operators, because most of them are morbidly afraid to speak up, whether it is to complain about the ministry or to complain about the majors. They're afraid that they will be punished in the future when they try to access some opportunities for more fibre, whether from the ministry or from these local large-scale operators in their riding. That's a big problem. It's a big problem all over rural British Columbia, especially up in the north.

You might be familiar…. As a matter of fact, it was one of the Liberal executives from one of the constituency associations in the Prince George area almost a year ago who bitterly complained that he was totally dissatisfied with the policy of this Liberal government in not looking after the interests of the small operators and also the family-run operations — that all of the timber was being concentrated in the hands of these big major companies.

In 1991, when the NDP took office in this chamber, the small business forest enterprise program was…. Somewhere near 10 percent of the wood of our fibre supply was going into the hands of the small operators. A decade later, by the time we left office, it was creeping up towards — I think it was — the 18-percent, 19-percent level. We had put in place a policy where…. When the major breakdown facilities were channelling and trading more wood with the small operators, it obviously put them in the good books of the ministry, so access for the majors to timber for fibre in the future became that much better for them, because they were now supplying some wood to the small operators.

So we've gone from a situation in the early '90s of almost 10 percent of the amount of wood going to the small operators, creeping up towards the 20-percent mark, and now it's back down and creeping closer to the 10-percent mark again. That's a shift that has gone backwards.

A number of these operations have gone out of business. These small communities have lost a number of jobs all throughout rural British Columbia. Yes, I know they're not the union-scale $25-an-hour job, but in a number of these communities they're paying up to $16, $17 an hour. It's enough for a starter job for a lot of these young men and women who want to access these opportunities in small communities so that the youth

It is a big problem. I would like the minister to take a long, hard look at this policy. What else is happening is that a number of these operators are saying that even wood in the form of raw wood — and it may not be a raw log but something that has been four-sided — is being shipped off illegally to the United States. The ministry is even aware that it's crossing the border, but the ministry refuses to do anything to try to enforce the illegal shipment of this wood to the United States at lower prices than could be made available to these small operators who are willing to pay a higher price in order to keep their operations alive and keep jobs in these small communities alive.

I'd like the minister to comment on that and tell me what he is doing to make sure that wood is not being illegally shipped across the border against ministry guidelines.

Hon. R. Coleman: First of all, this ministry doesn't turn a blind eye to illegal action. If this member is aware of illegal activity, we want to know about it, and we will investigate it tomorrow. To couch it that something is going across the border illegally…. I would like the member to provide the information so that the investigation can take place and we can deal with it. This ministry does not turn a blind eye to illegal activity, either on the import-export or on the land base itself. My officials are at a loss to know what illegal activity the member is actually referring to.

Now, in dealing with the issue…. What we're talking about now is moving into the value-added sector. My understanding was to deal with logs that would be sorted at a mill for some value-added opportunity in some locations. That's one issue; I've addressed that.

The second one I do know. I actually toured the plant where the individual talks about the value added in Prince George. That is a finger-jointing plant. The member uses mill ends to basically build finger-jointed lumber and then ships it to the United States, for the main part. That individual has actually been expanding his operation, has recently bought two others and is planning to build another and has a very, very positive outlook on the future of forestry in that he's actually building a mill — and he doesn't have a TSA or a TFL — that he's going to put in place in Prince George.

A challenge that faces them isn't just the access to the ends, which he's been working through with some of the local suppliers. I have had some conversation with some majors with regards to that particular subject and will continue to do so, because if it's something that I think needs to be addressed, I won't hesitate to address it directly to a licensee. At the same time as doing that, I don't think they need to feel that they can't be open and honest with this minister or this ministry with regards to their concerns because there will be repercussions. That's not how I operate and certainly not how I would expect my ministry to operate.

The next portion of what the member talks about is to do with some of the value-added stuff, and there are some other significant issues in that area. I was recently talking to — and I won't mention the company — the owner of a company in British Columbia that does value-added product, who told me this: "It's not the stumpage; it's not the fibre; it's not the shipping. Even if it were the countervail and if I were treated as a first mill on pricing, I'd be okay." But the problem that that individual has is that he makes a specific product, for which, when it hits the border, its countervailed duty is not at the price of the first mill cost — as we would normally, under the Chicago index, say is X number of dollars per thousand. He actually gets charged on the added value at the border, so his duty is on top of duty. He's taxed on top of tax.

For the value-added sector to expand…. Most of the ones that I've spoken to on this say: "We can work around a lot of our problems, but we also have an economic problem, and that is with this softwood thing." I think we should recognize that we have a value-added strategy in B.C. I've read it; it's a very good one. It's got sound basis in business principles, and it has sound supports for it. In order to see that grow again, we actually need to get access to a marketplace for that product where it is not being punitively taxed because it actually has value.

It's just incredible to me that someone takes a waste product, makes it more valuable, and actually gets taxed at a border by the U.S. at a higher level because they did the work and they created the jobs. The member's right. There are a number of those operators that actually create a very large number of jobs per production, and I'm a big fan of them. If we can find solutions for them, we're going to.

I can tell you that as we go through this softwood thing, one of the things that is clearly going to be, as we recognized through our negotiations…. I made this really clear to every single resource leader across the province and some Premiers of provinces that are involved in forestry across Canada, that no matter what deal, however the calculation is, we're going to where first mill will be whatever calculation we base it on so we don't punitively hurt people who want to take initiative, people who want to make an investment and try a different product and add value to it in the marketplace.

I want to find solutions to those. Like I said, I'm happy to have those that need it. As we go through it, there will be times when I'm going to or the ministry will have to have conversations with some of the larger tender holders as to how that — what probably in some cases people would view as a waste product — is actually made available to British Columbia producers first. There is some work to do there, but I've already had some of those conversations — just so the member knows.

H. Lali: I want to thank the minister, who has indicated that he would be willing to work with the small

operators and that he's certainly not interested in punishing anybody. If I came across as alleging that maybe the minister was, I apologize. That's not what I was trying to aim at.

These are allegations that I'm just putting forward because they are allegations that have come up from a number of small operators in terms of them being afraid of either the ministry or the large operators in the areas. So I told these folks that I would voice their concerns on their behalf, and that's what I'm doing — certainly no intent to try to impugn the minister's integrity.

As I have mentioned, these people are afraid to be stepped on by the big majors, and they're afraid to be in the ministry's bad books by coming out publicly and trying to actually voice their concerns on this. So I will be talking to the small operators and, depending on their wishes, will be able to put forward their issues so we could actually solve those issues.

Number one, I would like to ask the minister to actually make the commitment that we can work with these folks to solve their problems and try to see if none of the majors are going to step on them and be punitive. The second part of my question is actually their lack of access to the pine beetle wood, the beetle-killed wood that's out there. To give you the example of the Merritt timber supply area in the mid 1990s, when I was the MLA under the NDP government, there was a timber supply review done. There was a small uplift as a result of that, and then of course the innovative forest practices agreement…. There was an uplift as a result of that. Timber supply 2 came in, and there was an uplift as a result of that, and now obviously with the pine beetle. So there's been a significant uplift.

Obviously, if I can give an example…. I know people who are viewing this would see this, but for the benefits of Hansard: if the supply of wood, the fibre, because of all these uplifts in the Merritt TSA, is like this — and I'm stretching my arms full-length — what the small operators want is just a little piece of this. I'm looking at about a quarter-inch. I'm pointing that out for the record.

That's all that they want to keep their operations alive. Taking that and channelling some of that wood to these small operators from the pine beetle wood that's out there, available right now, would go a long way to keeping these operators alive and keeping those jobs in these small communities alive. It would in no way take away anything really from the big majors, and they are no threat to the majors in any way. So it's a comparison of this much wood available, and these small operators wanting this much of it in order to keep their operations alive.

Again, to the minister: I will bring forward these issues on a case-by-case basis depending on how the small operators want. I'd like the minister to commit that nobody will have any kind of a punitive action towards them. Secondly, I would like the minister to commit and put it on the record that he will do everything in his power to make certain that some portion of that pine beetle wood ends up in the hands of the small operators, so they can actually keep their operations alive.

Hon. R. Coleman: Through to the member: I never took anything you said personally in any way. I am quite comfortable. But I will say this to the member. We're prepared to put somebody at a senior level that somebody can speak to confidentially if they have concerns about these things. I will certainly have discussions when I get the opportunity with people from the B.C. Lumber Trade Council, who are a lot of the majors, to bring this up. I have had individual discussions.

Just for the member's information, there are 1.3 million cubic metres provided to B.C. Timber Sales. As I mentioned, a further 1.7 million cubic metres are in small-scale salvage. We also have the category registration that will be opened up to new entrants. The recent changes — basically, category 2 — are for smaller operators to be able to bid in an environment where they're bidding because they're actually in a category of bidders that are allowed to do that, which gives them a protected bidding pool. We will be adding some of the beetle wood to that as well.

So the opportunities will be there for those folks because we think it's important that some of these things are available. As these changes are being made to these and added volume, your entrants should be keeping close attention to how we're addressing some of those issues.

H. Lali: I will pay some close attention as per the minister's suggestion and tell some of these small operators that they can talk to a senior-level civil servant confidentially as well.

The 5 percent takeback we had whenever there was a timber licence transferred, it was an automatic…. Since the early '90s, a committee of MLAs would go around to suggest some recommendations in terms of the transfer from one company to another. There was a 5 percent takeback that was also a part of that deal as well, and often it was that 5 percent that was used to channel it to the small operators.

Sometimes when it was openly bid it went to the big operators again, but it usually did go and end up in the hands of the small operators so that they had enough fibre to feed their facilities. I'm just wondering what the rationale was behind actually eliminating the 5 percent takeback, and if the minister would be interested in putting back that 5 percent takeback again so that these small operators could get access to that to keep their operations alive.

Hon. R. Coleman: It's gone. That 5 percent program's gone. Its intents were there or whatever, but we did a 20 percent takeback when we did the changes — 4 million cubic metres. That went to B.C. Timber Sales.

What we actually wanted to encourage…. Not to tax the transfer licences, but we actually encouraged

the subdivision of some licences so that a large licensee might subdivide and have a smaller licensee take a portion of their AAC and their tenure, which would allow for opportunities for small operators to get on the land base on a longer-term tenure. The 5 percent was long gone before — quite some time ago. The 20 percent takeback went into BCTS, into first nations and into some sales programs, plus the uplift that we've done.

As I described to the member, we're creating, I think, a lot more opportunities for the constituents that have his concerns, and we'll work with individual ones to find solutions to their individual difficulties.

H. Lali: I'm going to move from this section as well. I want to talk about in 1998-1999. There was a deal that was made in Merritt between Aspen Planers and Weyerhaeuser — it's pretty well documented in the media, as the hon. minister will probably recall — where Weyerhaeuser wanted to shut down the mill and take its quota and just move right out of the community. I think it was between 300,000 and 400,000 cubic metres per year.

I ended up doing battle with Weyerhaeuser at the time. The ministry was actively involved…. Not the minister, but the folks from the ministry were involved in terms of actually seeing, in terms of mitigation and of actual replacement jobs, what Weyerhaeuser was able to do. They struck a deal with Aspen Planers out of Merritt.

What the agreement entailed was that 150,000 cubic metres of fibre would remain in Merritt as a result of that particular agreement. A majority of that would come out of the IFPA, innovative forest practices agreement, and there was an expected uplift of anywhere from 300,000 to 500,000 cubic metres per year as a result of the IFPA. Weyerhaeuser agreed to leave its share behind, which would amount to 120,000 cubic metres per year if, I think, the uplift was going to be about 400,000 cubic metres. I may be wrong, but it was in that vicinity.

The important thing was that it was going to be 120,000 that they would leave behind. Aspen would contribute 20,000 cubic metres from their share of the IFPA, and then the other 10 percent that would be needed, perhaps 10,000 cubic metres, would come out of TSR 2. Obviously, if the IFP was going to be a lot lower, then obviously TSR 2 would pick up whatever the remaining would be to make it 150,000 cubic metres a year. I'm trying just to recall. Roughly, it was about a 120-30 kind of a split. That was part of the agreement: Weyerhaeuser could shut down its mill operations, but the planer mill would change hands into Aspen Planers. They would operate that and keep the shifts going with the fibre that would be left behind as a result of this agreement.

What has happened is that when the NDP was no longer in office, the Liberals came in, and for a number of years, there was nothing that was actually specifically done, for one reason or another, on that — except about a year and a half back when there was an agreement. The IFP agreement was finally consummated as a result of an internal agreement between the majors and the aboriginal people, but in the end only 97,000 cubic metres actually went to this deal.

I'd like the minister to explain what happened. Why was there a backward step in terms of the 150,000 cubic metres that were supposed to go into this agreement, but only 97,000 were actually left behind? What happened? Why did it go backwards, and is the minister willing to actually make up for that difference of the 53,000 cubic metres to keep that agreement alive?

Hon. R. Coleman: I pass on the compliments of my senior staff on your description. You did a pretty good job, evidently.

I, however, don't have those details, and in discussions with my staff, we think this was one of those things where agreements referred to best efforts and then things changed, things evolved, and what have you. I suggested to them that it might be best if we offered you a briefing on the file, if that would be appropriate for the member. Probably the documentation isn't in the chamber at the moment, and to go into the complexities of something that goes back seven, eight years and how it evolved — who put on a planer mill or planer shift, etc., etc., and how that happened….

It would be best if somebody took the time to sit down with the member, given his knowledge of the file and their knowledge of the file, and get to an understanding — if that's okay with the member.

H. Lali: I thank the minister for the offer of the briefing, and I'll take him up on that, as a matter of fact. You know, I quit as an MLA for four years. You throw out all the files, but there were a couple of files I ended up keeping because I thought I might end up here one day again.

Anyway, just moving on from that particular one to another file — that is the J.S. Jones Boston Bar sawmill. Again, that was in 1999-2000, a year later. There were a number of times where the ministry, the MLA , the minister, the company and the community worked together to find solutions to keep that mill going for almost a ten-year period — almost the entire length of the tenure that I was the MLA at the time.

Of course, at the end, it was in that same '98-99 era that the Boston Bar sawmill was on the brink of closing, so obviously, at that time, we sat down with the J.S. Jones operation. Also, the job protection commissioner had gone in. We worked very closely with the commissioner, as well, to find some sort of an agreement, a deal to actually keep that mill alive and 240 employees employed there in the greater Boston Bar area.

We were successful. I mean, the deal, if we had to put some financial terms on it, probably would be worth $6 million, but it involved some changes in regu-

We had put in a mill closure procedure at the time, and according to the procedure, one of the things we looked at was that in order to keep the mill going, if there was a requirement to ship some raw logs, then that would be done, but only after the logs would have been offered for a period of six months on the market in British Columbia so that somebody else could pick those up and they would not be required.

There were a number of aspects of that deal; I don't need to get into it. Whereas it was fighting Weyerhaeuser in the Merritt situation, I ended up actually having to fight the IWA local on that one to try to keep that particular operation going.

H. Lali: My friend says it was a mistake, but from my perspective, obviously, it was that I am pretty fair in terms of business and labour when it comes to these kind of issues and wanted to, basically, keep that mill in operation. We were able to actually have an agreement in place. Obviously, the appurtenancy clause had been taken out through some regulation at the regional level about a year and a half before that, but the language that was put in place was even stronger than appurtenancy in terms of actually keeping the wood in that particular area.

Nary six months after the NDP left office and I was no longer MLA, the mill was allowed to be closed by this government. Not only was the mill allowed to be closed, but the entire fibre basket was allowed to be taken downstream where J.S. Jones, the brothers, actually owned some other operations.

Basically, all of that fibre was allowed to go, and all the jobs went with it, and the community of Boston Bar and Hope and throughout the canyon were left, in one sense, for lack of a better term, holding an empty kind of a bag. They were out of jobs. That community, if you drive through it, you'll see, is not as vibrant as it once used to be. There are some logging operations and that that are still left behind, but the fibre basket is gone. I would like the minister to tell me what happened. What did the government do to allow that to happen? Then I have one more question after that.

Hon. R. Coleman: One of the first mills I ever went through was that mill in Boston Bar, and I think it was actually before I went into public life. I think I was in the security business, which would have been somewhere around 20 years ago. I remember them telling me then that they didn't know how long the mill would survive. I remember touring it in opposition, and I'm telling you how old and antiquated and inefficient it was when I took it through and how they were down to one shift at that time. That was back in about 1997, I guess.

What changed is appurtenancy saying you have to take fibre to old antiquated mills in order to have your fibre basket, and try and encourage people to make business decisions to build efficiencies and modernize in a forest sector that has to compete globally. If you were to go to Quebec today, you would find that appurtenancies in Quebec have put almost their entire forest industry at risk because they've not invested in new mills, not invested in new technologies, not looked at how markets are changing and what have you.

That was one of the impacts probably in 2001-2002 with regards to this. But I do know this was one that the owners told me many times was a mill that really wasn't very efficient and very worthwhile, in their mind, even to still have. However, having said that, I did say, you know, these…. I'm glad the member kept some files for the four years he wasn't in office. I think what we would best do is include this in the same briefing as the previous discussions so that we could give you the history of that one, too, and give you the background. Again, this is a number-of-years-back evolution, and in a normal estimates debate we wouldn't have those files in the Legislature to get into that level of detail.

We will endeavour to include the two now. If the member has a third or fourth special file that he's kept…. I do know I have one on a Children and Families file that goes back about nine and a half years, and I still it bring up every once in a while to see whether anything has changed. So I do know how a member can get attached to files on behalf of constituents and get information, and I compliment you on that, because I think that's important for an MLA to do that. I will offer up the briefing on both of those files.

H. Lali: I have just one final question. It's not on another topic. This is a final topic. I guess before I start that…. When J.S. Jones bought the mill, they had actually spent a considerable amount of money to upgrade that sawmill, so it wasn't the sawmill that it was 20 years back when the minister went to it as a private citizen.

But I guess the burning question really is that in 1999 or 2000 when the agreement was signed to keep that mill in operation…. I recognize appurtenancy was gone, so appurtenancy is not the issue, but the language that was put in place was even stronger than appurtenancy was.

The burning question is that when they wanted to pull out six months after the NDP left office, why that clause was not exercised by the government — by the ministry at that time — to keep that operation going, or else there would be a small basket of fibre that would be left behind, similar to what happened in Merritt with the Aspen-Weyerhaeuser deal — to at least keep, if not 240 jobs, maybe a hundred jobs still alive in that community of Boston Bar so that the community could continue to be as vibrant as it was before.

I mean, that's the burning question — why that clause was not exercised. Again, that's another one of the files I've saved, so I'll have to bring it back next

Hon. R. Coleman: Going back at least ten years or probably 15, no government has ever used appurtenancy — whether it be a B.C. Liberal or an NDP government — on the closure of a mill relative to the fibre — just so we're aware of that.

We're not aware of what the clause might have been, but as part of the briefing, we will certainly pull that up and discuss that with the member. I think that's the appropriate place to do it. The clause that was even stronger than appurtenancy — I actually hadn't heard that before. I actually will see the clause as well, and the member will get briefed on it.

C. Trevena: Again, I would like to thank the minister and his staff for giving us this opportunity. I have a couple of constituency-based questions on cut control.

With the changes in the forest policy, companies can now harvest their annual allowable cut in a time frame that suits them. Effectively, a five-year AAC can be cut in six months or when it suits the market. I have working North Island constituents who have hardly worked this year because of this change in policy.

I'd just briefly like to read from a letter from one of my constituents who says that since January, her husband has been shut down more than he's worked. He returned to work in mid-March after a lengthy three-and-a-half-month shutdown, only to be laid off again at the end of June. The total number of months he'll work this year will be a whopping five.

I would like to ask the minister how he expects loggers to be able to continue working when this is becoming commonplace.

Hon. R. Coleman: I don't think that just the aspect of when you have to cut your cut or to give some flexibility to a company is the only reason we have this seasonal logging issue on the coast. I think we should recognize that right off the bat.

We have a number of issues on the coast. We can't find a home for hemlock at this point in time. We have a Canadian dollar that has made the coast in particular have a very difficult time competing in any marketplace. As a result of that, we have a lack of activity compared to what we might have had in the past. At the same time, we did move away — the member is correct — from forcing companies to log when it wasn't economically justified, because the writing was on the wall. Companies would shut down operations and maybe have left the business entirely if that had continued to be the case. You can't make a company lose money. You can't just say: "You have to cut, cut, cut and keep losing money because it's not economically viable, and that's too bad." We've seen the history of how that has an effect on marketplaces.

Really, what we need to do on the coast — and I know the member is from one of the affected areas on the coast — is address the issues that have been brought to me by the coastal organizations and companies that I've asked for the short-term, mid-term and long-term fixes. I've asked them to give us creative solutions so that we can take them to our ministry. We've passed those on to the ministry, who are now working on some of those fixes.

I'm not going to stand here and tell the member that the coast is in great shape. The coast has significant difficulties, not the least of which is this, and not the least of which is that some companies actually want to move away from logging certain types of fibre on the coast because of the environmental pressures and the other hassles they get. That is in direct conflict with what the truck loggers would like to see continue relative to logging practices on the coast. There are a number of issues that have to be worked out with regards to even the harvesting of fibre on the coast.

There are people that have said to me: "We would like to exit old growth." The truck loggers would like to stay in old growth. Then the question is: if somebody exits old growth, do we take back that fibre supply? And then what do we do with it? If nobody wants to mill it in British Columbia, what do you do with the stands of timber?

They're all significant issues. It's not one simple…. I wish it was — like, let's make them cut more, and the loggers will go to work, and the mills will operate. I wish we had a downstream market for these things. That's why we're looking at China, why we're looking at India, why we're investing in the forest investment fund and looking for additional markets — but at the same time working with our producers and our stakeholders, including the truck loggers and the Coast Forest Products Association, to find short-term solutions to keep things stable while we attract the investment to make it stable long-term on the coast.

C. Trevena: I'd like to thank the minister for that, because my next question was going to be about the viability of the forest industry and your views of how you're going to make sure that we have a continued supply of high-quality fibre on the coast.

I would very much like to have a picture of what you're looking at when you're talking about getting together the short-term, medium-term and long-term strategies. I would very much like to see the feedback that comes from these meetings.

Hon. R. Coleman: I'm sure that the Coast Forest Products Association will be glad to share with you what they sent to me. It wasn't sent in confidence. I don't have it in front of me. Some of the companies

may not, for obvious competitive reasons, want to have certain things released that they may have recommended to me. But I would check with them first before I would give them, but I'm happy to share that with the member.

I think that shortly we will probably have basically what amounts to a basis to go forward on the short term. Immediately when I have that, I would be happy to share it with the member, because I think this is going to require one very cooperative initiative on the coast. I mean, there's no question in my mind that we are going to end up having to make some shifts that are going to require all of us to have an understanding of why we make those shifts for the long-term viability. That's the short term.

Then there's the medium term of how we try and get to the point where we're once again solid in some markets. How do we get our coast to think long term in a marketplace so they don't go into a market, leave a market, move to another one and then find out when that one goes dry that the market that they left has now been filled by another country or another region of the country? So it's going to be short term, medium term, long term.

Some people accuse me of being an optimist because I actually think there's a light at the end of the tunnel here. I'm happy to have that moniker attached to me because I believe there are solutions. I believe the job of the minister and the ministry is to work for solutions. We can do that, and what we have to do is define what they are. Then we have to define to our own colleagues and to their colleagues on the other side of the House how we can find solutions and whether we can get to the long-term solution together.

In some cases, it may be a financial risk to the revenue of government that has to be taken into consideration on how you price your fibre. In some cases, it may be that you have to deal with hemlock in a way of…. Okay, if we're not going to cut it and mill it here, is there an option for us? What is that option? I mean, do we want truck loggers working full-time in logging and maybe not sending it necessarily to a coastal mill because they don't want it, yet that's a fibre that we have in our basket that we need to do something with?

I'm an optimist. I have to be, I guess, because certainly if I listen to some of the world markets guys, they tell me we're into a perfect storm and a crush and a bunch of other things. I say fine, but I'm coming through the storm one way or the other. I want to come through it in a positive vein for the communities on the coast, because I think forestry is very critical to their long-term survival and to those people.

C. Trevena: I thank the minister for that answer. I hope your optimism pays out, because I, too, want to see that there's a long-term industry on the coast.

You mentioned hemlock just now, and I did want to ask one final question. Is there a guarantee of fibre supply for any buyer of the Port Alice mill?

Hon. R. Coleman: There is no Crown supply that's guaranteed, but there is no problem with the fibre supply that they want to use in that mill. That was one of the issues that came off the table very early for the group that was looking at that operation simply because there's an oversupply of the type of fibre, which is hemlock, that they're interested in. It would be safe to say that if we put hemlock up for sale tomorrow, I don't think we'd get a whole bunch of bidders. So the price is very competitive for them as to what their numbers were. As a matter of fact, if I remembered back to what they….

Originally, when they came into that thing, they wanted a guarantee at a certain level per cubic metre. I forget what the number was, but it was substantially — probably three, four times — higher than what the market price for the hemlock was at that time. I think that's why that didn't become a factor in the discussions relative to the deal.

H. Bains: I'd like to go back to the issues that we were talking about: the 20 percent takeback. Maybe just explain it to us. I think there were some funds set aside for those licence holders who lost the timber and the contractors and the workers. Can you give us those numbers?

Hon. R. Coleman: I'll answer the question twofold. There was $125 million set aside for displaced contractors and workers with regards to the 20-percent takeback. It was put into the B.C. Forestry Revitalization Trust. I do have the third-quarter report of the trust, which I'm happy to give to the member as an update of the status of the trust. To date $20 million has been given to 397 workers. There's $60 million budgeted for contractors, and $3.2 million has been paid out to 17 contractors to date. That's an ongoing process as each one comes through the system.

I'm happy to provide a copy. Can we use this copy? Actually, I'll give the member a copy at the end of the debate, just in case I have to refer to it, of the B.C. Forestry Revitalization Trust third-quarter report.

H. Bains: I appreciate that information. I note the time, but I'm just rushing into some of the questions here. What criteria were set aside for the workers to qualify?

Hon. R. Coleman: Two aspects. In the third-quarter report under "Forest worker mitigation account," which is in this report, it states: "The principle being used for the forest worker mitigation is that workers who were severed because of the FRA restructuring will receive severance from their ex-employer, and that severance will be funded by the B.C. Forestry Revitalization Trust."

So the advisory board felt it was fair that all workers who lose their jobs as a result of the FRA restructuring be treated the same. At the bottom, the second paragraph under "Forest worker mitigation account": "Therefore, now it appears that there will be sufficient funds for the B.C. Forest Revitalization Trust to deal

with employee mitigation according to the guidelines." The detailed calculation and discussion appears in the forest worker mitigation guidelines. So we've established guidelines for this, and they can be found on the B.C. Forest Revitalization Trust website.

H. Bains: From what I gather — and correct me if I'm wrong, minister — the workers losing their employment as a result of this 20-percent takeback who could be working in logging and those who are in manufacturing…. Are they both qualified?

Hon. R. Coleman: No, this was for the loggers and the people working on the land base, because that was who was severed as a result of the 20-percent takeback. The fibre is still out there. It's just gone to B.C. Timber Sales and other licensees to use. It could still be going through the mills. The milling side is a whole other issue with regards to the dollar and the competitive nature…. I spoke about the coast earlier, and those sorts of things.

What I would do is suggest the member go look at the guidelines for those. Then, if he has any further questions, I'm happy to have them.

H. Bains: I guess the difficulty I'm having is that a worker losing a job in the logging side because of the 20-percent takeback…. Using your explanation, the timber is still there. But on the other hand, the logger will qualify for the severance, because he or she no longer has a job with that employer.

But if you use the same rationale for the sawmill worker who could be losing a job because that employer of his or hers has 20 percent less fibre available to them, and as a result, they have shut down a plant or part of the plant, and the workers are being laid off…. Why is there a distinction between those two?

Hon. R. Coleman: Because that's the manufacturing end of the industry. The fibre is still out there. A company that had a 20-percent takeback — and in most cases, they negotiated pretty hard and kept their best operating areas to themselves and didn't give us, necessarily, their best operating areas in the takeback — is still harvesting. They're still operating mills. They've cut back on their mill production, but not because of the 20-percent takeback. Not once have I heard from one of the companies that that had any impact on their milling capacity.

They'll tell you, though, that they have mills that need modernization and capital improvements, that they have trouble attracting capital simply because on the coast…. I think it's something like 5-percent return on capital, and the number for return on capital before financial institutions will even look at them is about 12. The return on capital is really based on the cost of the fibre that comes into the mill, the cost of the production as it comes through the mill and what they can sell it for going out the other end.

In some cases they don't even have the market coming out the other end. In some cases they've been cutting a dimension of fibre that is no longer on a marketable level at the level that it once was as far as that side is concerned. That would be seen, I suspect, because when we did this we were looking at market-based pricing and dealing with some of the softwood issues…. To go in and say, "Here, we'll subsidize a mill," would very much be seen as a contravention and would end up in the softwood dispute — very much so.

At the same time, there are mills that have made investments in British Columbia, some of them on the coast. Some of them — I'll call the lower mainland "the coast" as well — have made investment and have gone after markets that are successful today with some coast fibre. They did it because they could see an opportunity and went after the opportunity.

In other cases, we have an older milling structure that is causing some difficulties for what they can do and do it efficiently enough. So when you're the highest-cost producer, usually you're the last into a hot market and the first out. What happens is that because your competitive nature isn't that you can survive in the tough times, you're the first ones to slow down, and you're the last ones to start up. That's one of the synergies we find with some of the stuff on the coast, and that was already obvious in many areas long before the takeback was even talked about.

H. Bains: Let me come back to some specific instances here. My information is that Western have lost about 680,000 cubic metres as a result of this 20-percent takeback, and they have closed Vancouver Silvertree permanently. I think the closing date was the 20th of October. Saltair is mothballed, and it's an indefinite shutdown. When you combine those two and the amount of timber those two require to operate, it comes close to 680,000 cubic metres per year. So the members of a sawmilling side here in Vancouver, Silvertree, would be asking this question. They are now left with 20 percent less timber to operate the mill that they used to work, and the other mill is also shut down. So why are they not considered to be compensated by the government when the timber is still there? It's being harvested by somebody else, but it's not available to their company now, and they are losing their jobs.

Hon. R. Coleman: I don't want to get into the structure of Western. I have actually talked to Western, and they've never brought this up as the issue as to why they've shut a mill. They always point to the cost of fibre, the American dollar, the cost of delivery. They never brought up to me the 20-percent takeback as the factor.

The Vancouver log markets have this fibre available for people to buy if they want to. In many cases, it's not getting harvested even at that because the buyer isn't there because the mills are not operating. The reason

they're not is because even if they got the fibre at a lower price, they can't make any money with it. So they're not milling it.

They'll tell you straight up that the problem they face is that they need a coastal restructuring, and they need to do it in such a way that they can be competitive and establish long-term markets for the coast. That's why earlier I said this is a big issue that needs all of us to be aware of it, so that we can work together to make some changes that could help the coast with regards to how they can do their business and so that we can attract that investment back into this area. At the same time, there are some remarkable operators on the coast that have been incredibly innovative, which are operating both in Vancouver and on areas of the coast, who I guess saw opportunities a while ago and moved on them while other people watched the vehicle go by.

What we need to do is reinvigorate the entire coastal area so they're all getting on the vehicle as it goes by, heading to the markets and building those opportunities. The reason people are not in mills today is a number of factors that are not related to the 20-percent takeback, frankly.

B. Simpson: To the minister: a comment that he made earlier on is quite telling. This is a very complex ministry with a lot of convoluted aspects to it. So I appreciate the minister's patience.

Given that, for tomorrow, what I'd like to cover from a staff perspective…. I would like to look at activities around mountain pine beetle. I would like to look at the results-based code implications of that, and I would also like to examine some of the issues around policy changes that have resulted in things like corporate concentration and some issues around small tenure — so that the minister is aware of the staff requirements for tomorrow's discussion.

Again, with the minister and his staff's forbearance, I do have one small chunk that should take us to closing time today, if you can handle that for a while.

We talked yesterday about staff cuts. The minister talked about contractors being considered as part of the ministry's operations. I'd like to explore that a little bit, but I want to go back to something that we talked about today, and that is the relationship that the ministry has with the Association of B.C. Forest Professionals. Has the minister seen the letter that the Association of B.C. Forest Professionals sent to the Premier on December 20, 2004, in which they express concerns about the ministry's staffing levels?

Hon. R. Coleman: No, I haven't. I do know I've had a lot of correspondence since I became the minister in June of 2005. I certainly didn't go back and read all the correspondence to the ministry going back a year or two. At the same time, even my staff are not aware of the letter off the top of their heads, so we would have to get the letter and have a review of it. I would imagine that if the letter was sent by the registered professional foresters in that period of time, the previous minister would have responded. If I had a copy of the letter, I could actually check our correspondence records to see what the response was.

B. Simpson: In point of fact, I'm told by the association that no response was given. Again, it goes back to the relationship that the ministry is engaging this particular association in, because under professional reliance, the members of this professional association are given a very special obligation and responsibility under the new arrangements that the government has with results-based code, FRPA, etc. The letter is actually available on the association's website, if staff care to look that up. If they can't find that, I can certainly provide them with a copy.

The statement in the letter that I wish to speak to…. You have the association, with which the minister has a particular relationship under the Foresters Act. That association states: "We were particularly concerned that the changes" — and it's the changes with respect to the cuts to the ministry — "might negatively impact the ability of the Ministries of Forests, of Sustainable Resource Management and of Water, Land and Air Protection to fulfil their mandates."

Because that professional association has special responsibilities under the Forest Act — this is the second piece of information I've given forward in terms of this group speaking to policy considerations — what will the relationship be between the Ministry of Forests and Range and the Association of B.C. Forest Professionals when they give policy advice to government? How will the government respond to that?

Hon. R. Coleman: First of all, we're the single largest employer of registered professional foresters in British Columbia. We meet twice a year with the executive of this organization. Twice a year we have sidebar meetings with regard to individual issues as they come up. We take their advice, and we take that into consideration as we go forward, recognizing that any organization has certain issues or certain priorities that are theirs and that may not be in the global interest of the public good, which is always the case whenever any organization may have particular issues.

In addition to that, we really have…. They've complimented us on matching our priorities to our resources within the ministry. Recently they were very complimentary on the registered professional technologists work we did with them, with regard to that aspect of the file. If I were to describe the relationship…. As described by my staff, we have an excellent relationship with this organization.

B. Simpson: I wasn't impugning the relationship. What I was asking for was more under the Foresters Act and the changes in the Foresters Act — whether or not that relationship needs to become more formal. I met with the directors as well, and the nature of the conversation we had was about curiosities around what "professional reliance" means. If, as an associa-

tion, they make a formal intervention, then will that relationship be more formal as an outflow of the Foresters Act?

It's not about whether the relationship's excellent or not excellent, whether they're talking to each other or not talking to each other. It's that under professional reliance, there's a grey area here with respect to the association giving policy advice. Will that grey area be clarified and something more formal arranged?

Hon. R. Coleman: The ministry's actually meeting with them tomorrow on professional reliance, because there are issues they want to work through on it. In some cases, they have told us they're not ready to move on certain aspects of professional reliance, and they feel that they need to work with us on that. There's actually a workshop tomorrow on that.

I should tell the member that the December 20, 2004, letter that was addressed to government was responded to on January 20, 2005. For them to say they never received a response…. I will contact the author of the letter and ask him if he did not receive it. I will personally have somebody contact that individual tomorrow. Because you have brought up in the House that they stated they did not receive a response, I will make sure that a fax of the copy of the response goes to the individual. I'll ask them why…. I will, first of all, ask them if they got it. If they got it, then the second question would be: "Why would you be saying that you didn't get it?"

I think, when we're responding to correspondence, to bring it up in the Legislature that they didn't receive a response…. For them to tell you that, if they did, is unfair to you and unfair to both who the letter was written to and who the respondee was. I think that's very important.

I think we've probably got more to canvass tomorrow. You have two more questions? Okay.

B. Simpson: Thank you for that. I've timed it so that we should finish on time. Thank you again for your patience. I appreciate that, and as I said before, ignorance is not bliss. If there is a response there, I'd appreciate it as well.

I've two quick questions for the minister. First, the minister mentioned contractors' costs previously. From my own experience, I've been engaged in the private sector on numerous downsizings and engineered many of them. As the minister may be aware, often what you end up with is that you creep back up in your employment numbers. Also, you find that often, contractors cost you more. Does the ministry track contractors' costs relative to this savings that it hoped to gain from the downsizing effort?

Hon. R. Coleman: Let's be clear. We didn't replace staff with contractors, first of all. We do, at times, track our contractors' costs. We don't have those here, readily available. We do contract people to do specific work, given this fluid market environment you can sometimes live in with regards to what is required by any level of government.

I think maybe the confusion came when I tried to draw the parallel back to law enforcement and didn't do a very good job of it yesterday. I can tell the member that it was in the context of retirements and people moving out. I remember having that discussion. On some significant serious investigations in British Columbia, one in particular, we did go to retired members of police forces and contract them to come back as investigators, because we had a significant file that came along that took significant resources, which would have taken away from street policing and other investigations going on in the province. We did make that decision at that time.

Most times government would contract, something similar would be the case. If there is an immediate priority that is better fulfilled by having a contractor do the work, then you can bring the contract to an end and move on once the work is done.

B. Simpson: My last question. I will preface it, though, with a correction. What I was referring to was the minister's comments around our queries about the staffing in specialty areas relative to land base. The minister, at that point, said that I shouldn't think there's a quick fix there of having all that capability on the ministry staff — that we do use contractors. That's where I was asking that question.

My understanding is that we did lose, for example, ecologists and hydrologists and entomologists and so on. I've already queried that, but that's the context for my question around contractors and contract costs.

My final question. In my preparation for estimates, I did what I call a three-wishes exercise. I went out to a number of stakeholders in the industry by e-mail and asked them: if they had three wishes of questions they could ask the minister, what would they be?

I have to say that for the vast majority of the respondents, one of the wishes was that I ask the minister about policy review with respect to worker safety. As the minister well knows, a number of voices — the Truck Loggers Association being one of them, the steelworkers and others — have stated categorically that the ministry should undertake a policy review to ensure that policy changes have not created a working-conditions environment that has created unsafe working conditions.

Again, the question is very specific. It is a concern out there, and the question is: will the ministry be undertaking a policy review? As one respondent said to me, that they will put a safety lens on forest policies with respect to, for example, how we do roads now, utilization standards, the cut-control implications for…. As one of the hon. members already mentioned, what's happening is an exacerbated stumpage bingo. Will the ministry undertake that review, although it's not in the service plan?

Hon. R. Coleman: First of all, we've been engaged in a forest safety task force since day one. We're at the table. We met with them during UBCM. They asked

me whether we would consider putting a safety lens on our bidding process. I said yes. Have we already started work on that? The answer is yes. The direction has been given that we are going to be the leaders on the safety standards on the land base, from the ministry's standpoint.

If we do B.C. timber sales, we're going to add it in as one of our criteria. If somebody is, let's say, doing B.C. timber sales on the coast and wins the bid and is going to log it, if they're not a qualified faller, then they won't get the bid. If they're not using the proper safety equipment, they won't be allowed to operate on the land base. We think that we need to be able to set those safety standards out there.

The road standards are done with safety in mind when they're engineered, obviously. We're very much engaged with the entire coalition of people at that table. The caution that was given at the meeting was done by the people from WorkSafe. It was to not just say that we have a quick fix on safety on the ground in the forest sector, that we have a year that's outside the normal cycle.

We've had situations like that before, and they say the best practice is to look long term, to make policy changes like I described there, for safe work on the land base versus saying: "We're going to do this today." What we're saying is we're doing that today, but it's going to be long-term. It will be a standard practice within the ministry. That was the type of recommendation that came from around the table.

Licensees had the concern at the same discussion that they be allowed, at some point in time, for people who work on their land base, to say: "You know, we want standards, and if you're not going to meet those standards, then you're not going to work on our land base." That includes people like small-scale salvagers. They're concerned that if the small-scale salvage side is not meeting the standards of safety in the forest, it reflects on the entire Forest Service and the industry.

We will be drawing that parallel back to those aspects of forestry too. Wherever we're involved in issuing a license, there will be standards put in place that bring the safety lens into it. That came out of the meeting in September. That discussion has taken place, and we're moving in that direction.

Noting the time, I move that the committee rise — I was going to try and say "report completion," but I don't have a hope of that — report progress and seek leave to sit again.

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

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

Mr. Speaker: This House stands adjourned until two o'clock tomorrow afternoon.

G. Coons: Thank you, minister and all your staff, for being here today. I'm relatively new at going over estimates, so I hope you have some patience with me. My portfolio is ports, ferries and inland ferries, so I hope to perhaps just go over some questions on inland ferries and maybe get into some port questions. Hopefully, that would be quite appropriate for your side.

If I could start off with inland ferries, I'm just wondering: in the service plan that you've put out, what your plans are for inland ferries.

Hon. K. Falcon: First of all, thank you for the question, and I look forward to canvassing these issues with you. It's essentially, with inland ferries, more of the same, really. We administer the contracts. They're delivered by private sector operators. We ensure that they are meeting the provisions and the terms set out in those agreements.

I must say, we have been quite pleased with the operations of the inland ferries. In fact, I can tell you that as recently as, certainly, within the last 12 months, I went out and personally viewed many of those inland ferries, spoke to many of the folks using them and was very encouraged by some of the positive feedback I'd heard.

G. Coons: As far as fees for inland ferries, are there service fees that are paid to each route?

Hon. K. Falcon: Yes, we pay fees to the contractor or provider of the service.

Hon. K. Falcon: The budget for inland ferries was $16 million last year, and it's $16 million again this year.

G. Coons: I notice that in the supplement to the estimates…. I can see that the amount in there is — if you can just excuse me for one second — $15.7 million. That's a rounded…?

In the supplement to the estimates, there are some external recoveries of $8 million. Could you explain what external recoveries are, please?

Hon. K. Falcon: The recovery refers to $8 million provided by the B.C. Transportation Financing Authority, the BCTFA. That is provided in lieu of a decision we made earlier.

At one point, as the member will know, we had considered putting tolls on the inland ferries. We ultimately made the decision, after hearing the feedback from communities and from members, that we would not proceed with that. At the same time, we made the decision that we would essentially flow through from the BCTFA an amount equivalent to what we anticipated we would have captured, had we tolled it. That's what it recognizes.

Of the 15 routes, I think there are 15 routes with no tolls. Are each of the routes audited?

Hon. K. Falcon: There are auditing provisions within the contracts that we have in place with the service providers. We also undertake operational audits on an annual basis on the inland ferries.

G. Coons: Is there any indication of what budgets the audits come out of? Are the audits available for the public to peruse?

Hon. K. Falcon: The cost of the audits is part of the allocated amount in the budget there — the almost $16 million that we've referred to earlier. In terms of the audits, they can be made available, if someone asks for them. We certainly would have no hesitation in providing them — subject, of course, to perhaps having to do some severing in the area of commercial privacy or issues having to do with personal privacy so that we're in line with all those kinds of provisions that are in place.

G. Coons: Is there any other funding or moneys available from any other budget besides Transportation that goes to support inland ferries?

G. Coons: As far as Partnerships B.C., does Partnerships B.C. have any ties to inland ferries at all?

Hon. K. Falcon: There was a small involvement from Partnerships B.C. initially when we were moving to alternative service providers, where they provided some information regarding the type of process to use when you're going through that sort of an ASD initiative.

G. Coons: A major concern that I'm sure the minister and staff are well aware of is that the public wants to know how the government is protecting the public's interest, as far as privatization and P3s with inland ferries. Just a question: how is the public interest being protected, as far as inland ferries?

Hon. K. Falcon: There are a number of ways. The vessels and crew must meet federal certifications. Our payments are linked to core service requirements that they are responsible for delivering on. The contractors must consult with the public annually. That is a very important provision, I think, for the public. I must say that that has resulted in some very innovative service provisions being offered as a result of concerns raised by the public in terms of long weekends, etc. Those are the three primary areas.

As far as the Auditor General and his report on P3s, he said that the requirement of the government to protect the public's interest "requires the government to identify the risks associated with each partnership and to explain how it intends to manage them, measure them and report on its success in doing so in an open and transparent manner." Is that being done for each route?

Hon. K. Falcon: First of all, I think we should probably clarify for the member that these aren't P3s. These are alternative service delivery arrangements that we've entered into, very similar to the maintenance contractors, where we have the private sector delivering maintenance. It's very similar. It's the same thing except on the vessel side, on inland ferries. All of the provisions that would be of concern in terms of protecting the public interest are what I itemized earlier on. Those are the provisions that we have in place and that have worked, frankly, very effectively.

G. Coons: Were any capital asset management frameworks done prior to going into the non-P3s or whatever you're describing them as?

Hon. K. Falcon: If I understand the member's question correctly, we did do a review of all of the capital

assets that were involved prior to going into the ASD process. So the docks, the vessels, etc., where we provide sort of a baseline, "Here's the information in terms of the condition of the various assets…." Then that information, of course, forms part of the ultimate ASD contract, which would require the provider to ensure that they are maintained in a level of quality similar to what it was prior to ASD.

G. Coons: As far as jumping into the alternate service providers or the privatization of our ferry system, were public sector comparators done also?

G. Coons: As far as privatizing our inland ferries and getting into P3s — I think you got into that this morning with the critic of Transportation — what do you see as the role of privatizing our inland ferries? What purpose does that serve?

Hon. K. Falcon: What we strive to achieve in these ASD arrangements is…. Not surprisingly, what we're looking for are equivalent or better service provisions, first of all, and the ability to deliver that at a fixed price which we as government can control, with us, of course, having provisions that can direct the kind of outcomes we expect to receive from the service provider.

Those are typically the kind of things that we ensure are in place when we go through these ASD proposals.

G. Coons: So we see that the privatization will, in your mind, save taxpayers money. Are there any extra costs that you foresee the service provider will have to endure that weren't up there previously?

Hon. K. Falcon: When we engage in these ASD processes, we do so because we fundamentally believe that not only are we able to achieve equivalent or better service, but we're able to do it in a cost-efficient manner, and those are two very key, underlying principles.

G. Coons: If your ministry realizes that the cost to privatize our inland ferries is going to cost taxpayers money, will the government reconsider privatization plans?

Hon. K. Falcon: Frankly, government's purpose is always to deliver value for money for taxpayers, and that's what we have done, and that's what we will continue to do. I can't really speculate on what may happen. We'll deal with whatever happens. The fact of the matter is we enter into these things because we think there's sound value for money, and that's why we move forward.

G. Coons: Are there any federal subsidies that come through for inland ferries?

G. Coons: Again, like yourself, talking to workers on the inland ferries, there's a sense of optimism about what has been happening, and they're generally pleased about what's going on. But in the coming months the BCGEU and the NUPGE contracts are coming up. As far as the privatization of inland ferries, what's happened with the contractual agreements with employees?

Hon. K. Falcon: The collective agreements under successorship flowed to the contractor, and those are now under the obligation of the contractor and, in spite of that, working out very well, as I understand.

G. Coons: As I understand, once the routes have been contracted out and privatized, there are the extra costs, whether it's insurance costs, fuels, possible tolls — maybe not for the public, but there could be tolls — and other costs, auditing costs. Will those costs be a debt onto the government?

Hon. K. Falcon: It depends on the issue, member. Insurance would obviously be the responsibility of the service provider. In terms of fuel, we have a shared-risk arrangement where we recognize that if the costs of fuel go up dramatically, they absorb the initial increase, and then the province steps in. It's very similar to what we do with our maintenance contracts on the road and highway side.

Of course, that is unlike when we ran it. All the risk was with us. Every penny of fuel increase we would have had to absorb if it was still operated by government.

Hon. K. Falcon: The $8 million in the recovery we spoke about earlier, which flows from the BCTFA, is part of the 3½-cent gas tax that is dedicated to our highway system, our transportation system.

G. Coons: You mentioned there's a sharing of the fuel costs. Does that happen with B.C. Ferries?

Hon. K. Falcon: No, it doesn't take place under B.C. Ferries except under what's called sort of the social program side of things. Senior citizens, I believe, folks that are physically disabled or have some challenges, or medical individuals that are being transferred for medical reasons — there is a provision there where the

G. Coons: As far as the privatization of the 15 routes so far, have any employees lost their jobs?

Hon. K. Falcon: Certainly not as a result of the transfer. Whether any have lost jobs since then, I would be in no position to know that.

G. Coons: Again, I hate to put you on the spot at this point in time, but do you foresee in the next round of negotiations the privatized companies may have with their employees that there might be some job loss?

Hon. K. Falcon: On vessels such as this that operate on inland waters, as I mentioned in one of my very early answers, there is a federal certification process in place. That actually states pretty clearly what kind of vessel complement is necessary in terms of staffing for both safety and other reasons that are anticipated under the federal legislation. There's no ability of any operator, government or otherwise, to go below any of those levels.

In terms of the essence of your question, it's really speculative, member. I can't possibly foresee the future in terms of how these vessels are operated, but I can provide assurance that there are minimum certification standards in place and that those cannot be contravened.

G. Coons: The one concern employees had in the areas I talked to were that they may not be losing jobs but that there would be concessions demanded from them because of the higher cost of privatization. That's a major concern that we have. That's why, at this point in time, when you've been travelling around the province — and I've been talking to members and workers out there with the unions — the concern is the concessions. I hope that's not a plan — to be going out there to look at the concessions it's going to have to take to make up for the higher cost of privatization.

I'm glad that when you started yesterday, you mentioned the Francois Lake ferry, near Burns Lake, and the new ferry that's being built. Are there any other routes that vessels are near their retirement dates?

Hon. K. Falcon: We're not anticipating any vessel replacements at this time outside of Francois Lake, but of course, if needs change and circumstances change and there is an increased requirement, that's something that we would certainly look at.

Just an earlier point that the member made at the tail end of his last question. He's incorrectly making an association between privatization and higher costs. That's not the case. I want to emphasize to the member that we've actually got a locked-in cost that has not increased year over year, and I think that's important to put on record.

G. Coons: As far as the Francois Lake ferry, the cost of that is being borne by whom?

Hon. K. Falcon: I guess the simplest answer is that the owner of the Francois Lake ferry essentially pays for the cost of his ferry, the financing costs and whatever other costs are associated, through the payment that we make to that individual for operating the ferry.

G. Coons: And each individual contract is available for scrutiny by the public?

Hon. K. Falcon: Yes, subject, of course, to the commercial privacy considerations and personal privacy considerations that always come into play.

G. Coons: A couple years ago when privatization started, especially on the Francois Lake ferry, there were major concerns from residents and constituents in that area that the government should look at the economic impacts and benefits and weigh them against the added cost. Is that available? Are you looking at the economic and social impacts versus the added cost?

Hon. K. Falcon: Actually, I think this is just a great example of a case where, as a result of the beetle kill and the requirement for greater capacity, we were able to engage an arrangement where the vessel could be built locally, which I think was very significant in terms of local employment — a very innovative individual who actually built and constructed the ferry.

The ferry is now in operation. We have received very positive feedback from the community in terms of how pleased they are with the new ferry, the new capacity, etc. So I think that, naturally, any of the initial reticence that may have been there prior to the decision being made has largely evaporated, and people are very pleased with the new ferry.

G. Coons: How many staff do you have working on the inland ferries portfolio?

G. Coons: That comes out of highway operations. What is the cost for those four FTEs?

Hon. K. Falcon: It actually comes out of the inland ferries budget amount that we talked about earlier. The amount is $304,000, and that includes salaries and benefits, etc.

G. Coons: At this point in time, Chair, there are some other members that may want to have some pertinent questions dealing with certain routes or their ridings. Can I request permission for them to come in at one point in time and ask pertinent questions?

At this point in time I'd like to perhaps come back to these with some of the other members and go on to the port strategies and the area of ports, if that's okay.

To the minister: when we look at the port strategy and what's happening with ports, it's a very ambitious and very optimistic start. I think it's a good start, espe-

cially since the risk is noted throughout the strategy and indicates that one percentage point missed means $250 million per year in GDP, plus 4,000 jobs. I think it's fairly vital that we move on the port strategy and airport strategy. As far as the funding for the three-year plan, what is the funding for the three-year plan, please?

Hon. K. Falcon: We have budgeted for our ports and airports initiative $10 million a year for this year; next year and the year after, $30 million, which the member has probably seen.

I think the member raises a really, really valuable point that I'm going to spend a moment on, if I could get the forbearance of the member. This is something that is much bigger than, frankly, even that quite serious commitment. It's much bigger, because we're trying to engage the federal government to also recognize that there is a big opportunity for British Columbia if we seize this opportunity. The member might be interested to know that when I was in China, one of the messages coming back from China was the concern they had about whether….

They all recognized that British Columbia is blessed by geography. We are in fact the closest port to North America for shipping from Asia. With a 300-percent predicted increase in container traffic, there is no question that if we can increase, as the member correctly pointed out…. For every percentage of container traffic increase that we can get to British Columbia, that represents 4,000 jobs — high-paying jobs and many union jobs, I might add — but also $250 million in economic activity. So there is a big incentive for British Columbia, and indeed Canada, to make sure we make these investments.

The message coming out of China was also very clear in another area. They said to us: "But we want to see evidence that you recognize that you're going to make the kind of strategic investments you need to make so that we can have confidence that when the containers get to the port, they can actually be moved from the port into the marketplace efficiently." That is a much bigger challenge that we all have to face — and I say "we all" in terms of we as government, which means the railway industry, the short sea shipping industry, etc. — to ensure that we're all doing our bit to ensure that we can get those goods to market.

That, of course, is why we are working, as part of our gateway council, with all of those groups involved, to make sure we're all rowing in the same direction, that the railway companies are making the kind of investment they need to make to ensure that we can achieve certainty and efficiency on the railway side. We as a government are working to try and attract federal dollars that help us make investments into our gateway transportation program, which is critically important to make sure that we can move those goods. After all, they have to move by truck, many of them. If my recollection is correct, about 60 percent of the container goods are moved by truck and about 40 percent by rail.

All of those are important pieces, and that's why the federal government, in the Pacific gateway announcement that they made, where…. Their initial deposit, I guess you would say, in terms of their commitment to this was close to $600 million. I think it's something that we ought to be very happy with. I wish I could take credit, but I can't. It's really the Premier who led that effort in terms of lobbying the Prime Minister and really raising that issue in the federal government and on the opposition side so that they recognized how important this is and how big the opportunity is.

I want to thank the member for also recognizing what this could mean, not just in the lower mainland but also in the northwest of British Columbia, particularly the port of Prince Rupert.

G. Coons: You mentioned that the three-year plan was ten, ten and ten. I'm a bit confused because I've got 2005-2006 as 12, ten and ten. I'm just wondering if I'm reading something incorrectly?

Hon. K. Falcon: No, you're reading it correctly. I was going off the top of my head, and I should have actually checked the book. It is 12, ten and ten.

G. Coons: We have that problem sometimes when we go off the tops of our heads, I guess.

I also would like to commend, as I mentioned in my statement the other day, all the involvement from provincial and federal MPs and MLAs for a long time in creating the port of Prince Rupert and the optimism we have.

You mentioned that the airport and port strategy is now spending, I guess, $32 million over three years. How is the breakdown for that for ports versus airports?

Hon. K. Falcon: The biggest chunk of the funding out of that 12, ten, ten is $17.2 million for the port of Prince Rupert to bring about containerization.

There will be an additional tranche of dollars to make up $30 million, which is the commitment of the province. We're actually, as we speak, in the midst of negotiating where that's coming from in terms of our negotiations with the Ministry of Finance, so stay tuned for where it comes from, but the commitment is very clear. Of course, the balance of that is available for airports, and we have a very small component for cycling partnership programs.

G. Coons: So the commitment that was made by the government was $30 million — committed to matching funds with the federal government for the port of Prince Rupert. Now, where would that be coming from and what budget?

Hon. K. Falcon: I just explained that, but I probably wasn't as clear as I should have been. The $17.2 million of that is coming from the budget we're just currently

talking about: the 12, the ten, and the ten. The balance — we're in the midst of negotiating that with the Ministry of Finance about where the balance of the dollars to make up the $30 million will come from, so it will be from some pocket of government. We're just not…. We're in the final process of determining where that's coming from.

But, I guess, to be very clear for the member, the $30 million commitment is in place. We will be funding the $30 million commitment, $17.2 million is coming from the budget we're talking about now, and the balance we're negotiating with Finance as to where those dollars come from.

G. Coons: Again, minister, I'm a bit confused here. The total budget for the port strategy over the next three years is $32 million, and $17.2 million of that is going to the port of Prince Rupert. Am I correct?

Hon. K. Falcon: What we're doing is…. We've got $17.2 million coming out of the budget that we're talking about here today. The balance of the $12.3 million, or whatever that makes up $30 million, will form part of some future budget deliberation discussions we're going to have that will flow out of next year.

All of this, of course, has been shared with the port of Prince Rupert, and they know exactly when all the dollars are funding from all the different partners.

G. Coons: At this point in time, minister, I'm not too concerned about the port of Prince Rupert because I know the value and the commitment and where we need to go with it. I'm just concerned about the other, I guess, $12.8 million left over that's going into the airport strategy and other ports. I'm a bit concerned about how over three years there may be money that's not available to other ports — necessary ports, especially the smaller ports.

Hon. K. Falcon: The strategy is based on the underpinning that we believe small and regional airports can have tremendous local economic multiplier benefits for the communities. What we have asked communities to do that have airports and believe there is a case to be made that strategic investment in their airport could generate benefits for the area is to develop the business case and bring the business case forward to our ministry. Our ministry then examines that business case and makes funding decisions based on the business case.

As the member will know, as in any government program, you typically get lots and lots of requests, and there are varying degrees of — how shall I say? — quality, in terms of some of the applications, how well-thought-out they are, what kind of partners they brought to the table, etc. But I must say, on the programs we've been funding up to this point — whether it was the Kamloops Airport, the Abbotsford International Airport, the Comox Airport, which we funded a couple million dollars to, the Campbell River Airport…. All of these investments were made on the basis of very substantial and solid business cases presented to government that we worked through with them, and as a result of that, the dollars flowed.

G. Coons: I'm just wondering: out of the $32 million, $17.2 million of it is going to the port of Prince Rupert, and there is $12.8 million left. How much of that $12.8 million is going towards the port strategy in other ports, and how much is going towards airports?

Hon. K. Falcon: The balance of dollars that would remain…. Where they would flow would depend on the applications we receive from either small ports or from small airports or whatever the case may be. Of course, as I said before, each of those would be examined on the basis of the business case they bring forward.

One thing I do want to sort of clarify for the member, because I think it will be helpful, is that when the member talks about port strategy…. We do have a broader port strategy that is multiministerial. It involves, for example, the Ministry of Economic Development, which is also responsible for the Asia-Pacific. It involves my ministry as Ministry of Transportation, particularly on the gateway transportation side. There is some cross-ministry work that takes place here.

Also, of course, the federal government component. We think it's very important for the federal government to share in some of the opportunities here financially. That, of course, was recently confirmed with the announcement made last week by the federal government.

G. Coons: As far as the federal money that just came in — I believe it was $590 million — what are the ministry's expectations for dividing that up into the port strategy that we're looking at?

Hon. K. Falcon: Well, the way that the federal government has structured the Pacific gateway announcement is that there were some very early commitments that were made. One of them was to jointly fund with the provincial government the Pitt River Bridge, which is a new six-lane crossing connecting Maple Ridge–Pitt Meadows with the Tri-Cities. That will replace the old 1950s swing bridges that are currently in place. Hard to believe we still use them in this province. Nevertheless, that's evidence, I think, of the lack of infrastructure investment that's been made. So they will share in that cost. That's about a $180 million project, so we anticipate about, I believe, $89 million from the federal government on that project.

They have indicated a contribution of $2 million towards the environmental assessment work on the South Fraser perimeter road, which is the new four-lane highway that would be on the south side of the Fraser River. The member is probably aware of that, so I won't bore him with details.

There is a $30 million commitment for grade separation on rail crossings in communities that have high impact in terms of traffic volumes. Langley comes to mind. Langley is a community that has been particularly visited with some of the joys of a growing economy and what that means in terms of trains coming through their community.

Hon. K. Falcon: Yeah, that's right. We're trying to keep them on track, as the member opposite would say.

That was a very clear part of their commitment. There are some other dollars for other provinces that I won't go into and bore the member with. The balance of the dollars, roughly $400 million that remains available, will be partially governed by an advisory committee that the federal government has set up. It's an advisory committee which we will have a couple of representatives on as the province of British Columbia.

That advisory committee will look at the whole, sort of, panoply of potential options in terms of making strategic investments, where we get the maximum benefit, etc. They will be looking, by the way, at all aspects of the transportation network, so they'll be looking at port, at rail, at transportation, etc.

We look forward to those deliberations. Hopefully, it will be a group that will be able to make quick decisions, because I honestly believe that we, as the member well knows, have a great opportunity. Let's not lose that opportunity by bureaucratizing the process. I do feel confident, after speaking to the minister, that this will move along at a pretty fast speed, and I think that's good for British Columbia.

G. Coons: I totally agree, minister, that we have an opportunity, and we can't lose it. We look at the 15 percent share of the container market available, and as we mentioned before, 1 percent: $250 million per year and 4,000 jobs — it's something that we've got to really push towards. The strategy indicates that the B.C. ports are a vital link to economic growth and prosperity. I'm looking at the long-term strategy of 2020 perhaps being something that is not too visionary at this point, and I am wondering why it's not a tighter time line.

Hon. K. Falcon: I would concur with the member that the challenge that we've set out for British Columbia is to effectively attempt to double the percentage of container traffic coming from Asia to North America and the U.S. west coast. That is the opportunity, but we have to also be realistic about the time frame in which we achieve that opportunity.

We believe that if we make the strategic investments in transportation that need to be made, if we can work with our partners to make their own respective investments, whether it be in rail or in short sea shipping or improvements to the port in terms of how they move goods, etc., that that is a very achievable goal. But I should state here that it is a very ambitious goal. I think it's important that we reach high, because as the member well knows, that could represent potentially some 50,000 high-paying jobs for British Columbians and secure the economic future of British Columbia for a generation.

If we do this right, if we make the right investments, if we seize the opportunity we know is coming, then it will afford tremendous benefits for British Columbia. That does not mean, member, that as we go forward we look out just in that 15- or 20-year horizon, but that we also recognize we will have short-term goals to meet. That's part of what we're doing on the gateway transportation program, recognizing that this is a program that obviously would extend over many number of years, but it's a critically important project in terms of meeting the objectives that are stated in the port policy paper the member refers to.

G. Coons: Coming from a riding that encompasses quite a few ports — and we know that there are hundreds of ports in our wonderful province — and going back to a comment from the Premier that we have to move quickly and your statement at the board of trade recently, saying, "We have to seize the opportunity to expand the ports, move quickly. The opportunity is here now; we've got to seize the opportunity" — total agreement. But coming from a riding where we have lots of smaller ports, I have a real concern about the amount of funding or infrastructure or initiatives that may be going into them. I'll get into that a bit later, but at this point in time…. This party talks about the Canadian port authorities. Who are the port authorities right now in the province?

Hon. K. Falcon: There are six: the port of Vancouver, the Fraser port, the north Fraser port, the Nanaimo port, the port of Prince Rupert, and Port Alberni.

G. Coons: The non-CPAs endorsing the strategy — it talks about their important role in regional development. The smaller ports that we're talking about in the port strategy would include what places?

Hon. K. Falcon: I must really apologize to the member, because I don't have a complete list in front of me. But Kitimat, for example, would come to mind. Perhaps Campbell River could be another one. But I just don't have a complete list. I can certainly get that to the member, if he wishes.

G. Coons: Yeah, and in my riding, I would say Bella Coola, Stewart and other ones that over the years are just waiting for an initiative like the port strategy and seeing where they fall in. One of the actions included in the strategy that I noticed is to promote the development of the smaller ports. I'm just wondering: what strategies are happening to promote the development?

Hon. K. Falcon: I think the member brings up a very good point. That is work we are going to be do-

ing, and I say "are going to be doing," because speaking very candidly, we have been very much engrossed in a couple of areas. One is working through…. I can't tell you the number of hours that the Premier and I have spent on the port of Prince Rupert alone, trying to bring together the federal government commitment and also the commitment from CN to make investments to realize the potential of that port. That has consumed an enormous amount of effort, and obviously, that will be ongoing. And of course, we have been working with the feds to get them to buy in on the broader Pacific gateway strategy. That announcement last week is evidence of some very substantial process in that area.

I think once we have the opportunity to really move those along to a stage where we don't have to be so heavily involved — and I think we're at that point — then we can focus our time on some of the smaller ports that the member mentions, quite rightly, and start to work with those smaller ports to determine what possibilities and what potentials exist for those ports and whether a business case could be built around, you know, creating opportunities in those ports for their communities.

G. Coons: Now, when we were talking earlier, minister, about divvying up the tranche of dollars that's out there, again, I had a concern about the $12.8 million over three years to ports and airports. If you start looking at the applications for individual communities or ports or whatever to put in their business case, there isn't much money available over three years. That's a major concern that I'm finding as I travel around my riding and talk to people throughout the province.

But as far as British Columbia–focused cruises or whatever, or building on the capacities of the smaller operators in smaller communities, are there any initiatives towards that in the port plan?

Hon. K. Falcon: I think one of the things that's very important to point out is what we do with those dollars. You'll look at those dollars, and you may say: "Well, gee, that $12.8 million doesn't seem like very much over three years." But it's very important to point out that we actually use those dollars to leverage other investment, whether by the private sector or by the federal government or whatever the case may be.

That's very significant in these projects, because one of the things we want to see…. You know, too often — as the member can only probably imagine…. Initially, business cases typically come to us and say: "Would you please just provide us with a whack of money so we can do a bunch of things that we think would be a great idea for our airport?"

When you start pushing back and say: "Well, just a minute. What is the business case? Where do you expect to see the additional traffic coming from? On what basis…?" You start to get them back towards saying: "Okay, put together a business plan." If the plan makes sense, it will start to attract partners. One of them will be us. We'll certainly make sure that we're a partner in there. We want our investment to leverage other investments, and we see that in other airport investments we've made. That would be the first point I'd want to make.

The second point I would make to the member is that for some of these issues, there are other ministers involved. The Minister of Economic Development, for example, plays a key role in some of these things. In fact, if my memory serves me correctly, the Ministry of Economic Development provided funding for Prince Rupert for their cruise ship terminal facility, which is quite a spectacular addition to the port of Prince Rupert. So we try to work in cooperation with them, but we are not the only ministry that is trying to provide economic benefit to some of these ports throughout the province.

G. Coons: As I mentioned before, promoting development of smaller ports is close to my heart, coming from a community, a riding, that is coastal and very dependent upon what's happening in the resource industries, and it's not happening that well these days. But as far as the implementation schedule for promoting development of smaller ports…. What is your implementation schedule as far as a port strategy is concerned?

Hon. K. Falcon: That really is something that will be developed by the work that we still have to do, as I mentioned to the member, with the smaller ports — to assist them in developing business cases where there may be a business case that makes sense, where the province can make a contribution and, hopefully, a contribution that can leverage other dollars. We will begin that work.

In fact, I think there is a great opportunity for the member opposite to be involved in that, as he, probably more than anyone else, knows the players involved in those various ports within his riding, for sure, and can assist them in coming up with some ideas or working with them to see what the business case is and where strategic investment by government can help unleash some real potential in these smaller ports. We are quite willing to do our bit in that.

G. Coons: I was just trying to find it here, but I was under the impression that I read in the port strategy that the implementation schedule has this to be done by 2005. If that's the case, I hope that something's going out there to the smaller ports, and you're starting to get the feedback — how the ministry wants and needs to do that with input.

As far as your service plan for the port strategy, it indicates that the infrastructure would begin coming on line by 2009 — on page 35 of the service plan. I was just wondering what is meant by that?

Hon. K. Falcon: This is really following up and referring back to my trip to China again. One of the

real strong messages coming out of China, and I guess from years of experience…. The Chinese have heard many governments come over the years making lots of promises about things they will do to make trade so much easier. I guess the Chinese are to be forgiven for the fact that they may be somewhat skeptical of governments actually implementing some of these things.

Part of what we wanted to include in the service plan was outcomes that would indicate there would be evidence that we were undertaking our commitments that we were making to British Columbians and indeed the world, and that we were taking this challenge seriously, and we are going to make those investments. The infrastructure that is being referred to in this case we consider to be infrastructure that is part of our gateway transportation program. That would be, specifically, the Pitt River Bridge — the first coming out of the gate — which will be completed in time for 2009. I think that will demonstrate very clearly to everybody that this government is serious about moving forward with major transportation and strategic investment that is necessary for us to move goods.

The other thing I will add to that…. I know the member is from the north coast, and I think that some of the members that are not from the lower mainland also recognize, perhaps, uniquely — perhaps more than the folks in the lower mainland — how important transportation is, and how important the movement of goods is. When you're trucking goods down from that member's neck of the woods or from the north or the interior, it's not helpful to them or the economy of British Columbia if they then become enmeshed in a nightmarish traffic situation, which is what we have in particular spots in the lower mainland.

That's why the gateway transportation strategy, which I'm going to be discussing later with other members, I'm sure, is in part to address that very real challenge that we face in terms of the movement of goods. I think this demonstrates that we will have some of that in place by '09 as evidence of our commitment to move forward.

G. Coons: I guess this whole concept of the port strategy and trying to figure out what I can do and I can say to the smaller port coastal communities…. I can say to them that not only is this government promoting them but actually is going to be actively putting infrastructure in place so that the promotion of these smaller ports makes sense. So I hope that somewhere along the line I can sort this out.

When we start looking at the line item that we're looking at of 12, ten and ten, and the leveraging and the…. I find it really confusing to grasp a number to say: "Well, this is how much we're looking at and where we can go with it." It's even more discouraging when you go back to the communities and try to explain it and say: "I don't really know what's happening." Hopefully, as we proceed through this for another hour or so, it will start to make sense.

Hon. K. Falcon: We are working with our industry advisory group. As I mentioned earlier, we have an industry advisory group with stakeholders from the various transportation-related fields. They have completed a first draft on a multimodal action plan. We are hopeful that the final draft will be completed by year-end. At that time I think we can look forward to sharing that information with the public. It will, I think, be a substantial contribution to executing the port strategy.

G. Coons: The port strategy indicates that this is something that's critical to identify, and I think it's a necessity to move forward on that quickly. How much is budgeted for the action plan?

Hon. K. Falcon: There's no budget associated with it, only because the industry advisory group is made up of private sector representatives from the ports, from the airports, from the rail, etc. So what they're all doing is sitting down with government to help facilitate this process, to say, "What are the big investments that need to be made?" whether it's by government or whether it's by the private sector. Now, helpfully, the government is in many ways way ahead of the IAG in the sense that we have already been working in anticipation of the fact that we know there is going to have to be some strategic transportation investment upgrades made. That's why we are working on our transportation gateway plan. That's why we have worked to get the almost $600 million commitment from the federal government for the Pacific gateway program.

Really, we are actually ahead, from the government side, in terms of starting to put in place the dollars available. In fact, as the member probably knows, in my budget I've got $289 million available for the gateway transportation program this year. That, I think, is very significant in terms of going forward.

The other members of the industry advisory group will, of course, be looking at what private sector investments they need to make to complement the strategic direction that government is going in.

G. Coons: As far as the operating practices and alternatives review, where is the ministry with that?

Hon. K. Falcon: I have to ask the member's forbearance to perhaps clarify what he's talking about. I should tell the member that maybe it's a testament that he hasn't noticed, but I actually don't have the port strategy in front of me. I'm going off the top of my head, as I remembered it. Of course, I was part of putting it together, so thus far I've been able, with the cooperation of my staff, to remember all the elements of the port strategy without having it in front of me. But that section the member quotes is unfamiliar to me, so if he could clarify it, I could hopefully answer.

G. Coons: As far as the strategy, the industry is going to be doing this by the end of 2005, I think, and will just look at the best operating practices and alternatives for the industry and where the port strategy could go. I'm just wondering where we are at with that.

Hon. K. Falcon: Yes. Thank you for that clarification; I do appreciate it. That ties in with the action plan that we're expecting by year-end from the industry advisory group that will add more flesh to the bones, so to speak.

G. Coons: As far as the port strategy, how many staff are allocated to working on that?

Hon. K. Falcon: Not including the minister, of course, who becomes very absorbed in these things, we've got four staff from our ministry that are actively working on this port strategy. There are also individuals from the Ministry of Economic Development, the number of which I'm afraid I'm not sure. I'm sure the member can canvass the minister at that time, but there will be others involved from the Ministry of Economic Development working together on this.

G. Coons: As far as the four staff, is that coming out of the $32 million, or is it coming out of other FTEs?

Hon. K. Falcon: No, that would be coming out of the operations ministry budget. That wouldn't be coming out of the ports and airport budget that we talked about earlier.

G. Coons: I notice in the strategy there's the development of an interim advisory group. Has that group been formulated yet?

Hon. K. Falcon: That's the industry advisory group I've referred to earlier.

Hon. K. Falcon: We've got federal representation. We've got provincial representation from both Ministries of Transportation and Economic Development. We have all the prairie provinces represented, with one each available to serve on the industry advisory. We've got port CEOs from the various ports. We've got terminal operators. We've got CN/CP representing the railways. We've got municipal representation, and we've got the Vancouver International Airport represented. I'm going by memory too, member. I think that is almost an exhaustive list, but there may be one or two more that I may have missed.

Hon. K. Falcon: Frankly, the only costs that may be involved are if the ministry is required to provide a meeting room somewhere, if we can't meet in ministry offices where we traditionally try to meet. If we are meeting at the offices of one of the members of the industry advisory group, obviously there is no cost associated there, so the costs, in short, are very, very minimal. Whatever costs there may be will be picked up under our ministry operations budget.

Hon. K. Falcon: We've had a number of meetings take place since June. The most recent was about two weeks ago.

G. Coons: Again going back to smaller ports, the CPA ports, it's mentioned that they have many financial burdens placed upon them. The CMA restrictions on ports — the Canada Marine Act restrictions…. What does the ministry see the restrictions as?

Hon. K. Falcon: The Canada Marine Act does provide some restrictions over the port and the ability of the ports to operate. One of the key ones we certainly heard of from stakeholders was the borrowing cap that was in place. It was a very hard cap that would not allow even the major ports like the port of Vancouver to make sufficient borrowings. We have been advocating, actually, ever since I became Minister of Transportation. I can tell you that every time I meet with a federal minister, that's an issue I bring to his attention, along with a whole range of other issues like Open Skies, etc.

I am pleased to say, though, in terms of the Canada Marine Act, they now have — if my recollection serves me correctly — doubled the borrowing capacity of the ports. That is a significant shift for the federal government, and it's a shift in a positive direction. We continue to work with the federal government on other changes to the Canada Marine Act that can improve the life of ports in British Columbia.

G. Coons: Have any amendments been looked at in your ministry or approved within your ministry to be brought forward?

Hon. K. Falcon: We are a little hamstrung in that regard, because this is federal legislation, and it's federal legislation that governs the ports. All we can do is try to advocate on behalf of our ports, and that's something we have tried very hard to do.

G. Coons: Has a coordinated public relations plan been developed yet as far as the port strategy?

Hon. K. Falcon: No, it hasn't really at all. I think, in fact, it would be safe to say there isn't one at this point — not that we don't think it is important. But you know, our Premier and our government just philoso-

phically believe this is the kind of thing where you don't put a PR strategy into place, frankly, when you are doing the groundwork to try to create something that will provide benefits.

We've got a lot of heavy lifting to do before we ever get to a point where we think it's important enough to trumpet, hopefully, positive results out of it. At this point what we're doing is, frankly, the heavy lifting involved in trying to attract federal dollars. As we pointed out many times, we've been successful in seeing substantial federal dollars come to the table, making sure the province is moving forward on its commitments in terms of showing leadership and in terms of the strategic investment, etc. That's what we're going to continue to do. There won't be any public relations or whatever the member referred to at this point at all.

G. Coons: I guess I find that disappointing, because I'll have to stop the presses from my news releases going out there. The coordinated public relations plan was supposed to go out in spring 2005, as far as the implementation timetable.

I'm not too sure when that's going to go. Then I guess you'll have to revamp the implementation schedule. When do you think you will be coordinating that?

Hon. K. Falcon: As I indicated earlier, we're anticipating the final report from the industry advisory group by year-end. Once we have that in place, then we will have something meaningful to talk about. I certainly assume my share of responsibility for the fact that that isn't quite moving along the time lines we had estimated there, primarily because…. Again, I think it's a fair reason to allow that to slip a little bit, given that we were working very hard on a couple of very big pieces.

One was the port of Prince Rupert, of course, making sure that we could nail down that federal commitment. It was very, very important to get that nailed down, especially prior to going out and actually talking about it. Also, nailing down some federal dollars, some broader federal dollars, under what the federal government is referring to as the Pacific gateway program….

Now that we've had those in place, and now that we've got the final report coming from the industry advisory group by the end of the year, I think in the new year you will see us able to move on that, and you can get your presses rolling again.

G. Coons: As far as the estimates book is concerned and looking on page 157…. I'm looking under transportation improvements, under port and airport development, and I'm sort of wondering what improvements would be coming under there.

Hon. K. Falcon: The short answer is none. That figure, the $4.767 million, refers to moneys that we flowed to municipalities. As you'll recall, one of the big challenges the ports were facing was a rapid escalation of municipal taxation. What we did was we put a cap in place to encourage investment in the ports, which was not taking place because the moment they made new investment, it was immediately penalized with substantially higher municipal tax rates. We put a cap into place, and we make the communities whole by funnelling millions of dollars back to them, and that's what is being referred to there.

G. Coons: As I mentioned before, I'm really trying to read into the strategy and be optimistic so I can report back to smaller communities, smaller coastal communities, as far as infrastructure, as far as docks, as far as developing pocket cruise initiatives — whether it's Stewart, Bella Coola, Squamish, Kitimat, Victoria, Campbell River.

As we mentioned before, I think there are close to 130 or 135 public and private ports in the province. Can we just get on record here for the smaller ports in British Columbia: what will be some of the benefits they will be able to see, say, in the next three years?

Hon. K. Falcon: That will depend partially on the business case they put forward. I think the member would understand that it's not enough to say, "We think we have a great idea for our port," or airport, or whatever the case may be. Because we are dealing with taxpayer dollars, we want to ensure that when we make an investment, whether it's in an airport or a port, we're not the only partner at the table. We want to know that this isn't just a case of provincial government dollars solving all the ills of the particular port or airport.

We will be looking for things like partnership funding. When we know there's private sector investment, when we know there are other levels of government prepared to step up to the plate, whether that be federal or local or whatever the case may be, that strengthens any application substantially. Of course, we'll look at the strength of the business case.

I think what the member can say with some real confidence, particularly as the member is from the north coast, is that we in this government, and this Premier, have enormously ambitious confidence in the north coast. I think that determination has clearly been borne out by the work that's been done over the last few years to not just have the province invest in bringing about containerization at Fairview Terminals, but also to get the federal government to the table with a matching $30 million commitment and to see CN come to the table to match the commitments put forward by the federal and provincial governments. That, I think, is a shot in the arm that is going to be very, very substantially positive for the north coast.

Something I am certainly very proud of in terms of the, as I say, other smaller port communities. You can go back and tell them: "Folks, what you need to do is put together a business case. Let's put together a business case. Let's bring partners together, and let's go

back to the provincial government and demonstrate how an investment by them leveraged by partners that we brought to the table can bring about great opportunities for our community." We will be happy to work with them when they bring that forward.

G. Coons: As far as smaller communities and the cruise ship industry, are there any plans at all by the ministry to investigate, say, pocket cruise industries so that coastal communities can benefit from that aspect?

Hon. K. Falcon: That really comes under the Ministry of Economic Development, and I imagine, also a portion under tourism. So if the member could be good enough, I think those questions would be better addressed, certainly, to the Minister of Economic Development, who I think would have a strong handle on most of that. There may be a tiny bit of it that comes under the minister that's responsible for tourism too.

G. Coons: I think there's one last aspect that I'd like to get into before I spend some time on B.C. Ferries or try to spend time with B.C. Ferries. Getting into the cruise ship industry, what's in store as far as the port strategy — not with the pocket cruise but with the cruise ship industry?

Hon. K. Falcon: My understanding is that there has been some discussion at the industry advisory group level about the issue of cruise ships and how we maximize opportunities there, etc. But again, this is really more in the gambit of the Ministry of Economic Development. I'm just reluctant to speculate on that. If the member could be good enough to make a note of that and question my colleague, I think he'd probably get a far more fulsome answer.

G. Coons: Back in 2003 Capt. Gordon Houston had a real concern about reducing the risk of competition among the cruise ships along the coast and trying to formulate a plan where they would work together and perhaps even work towards standardizing the per-passenger levy or something like that. Is there any plan for the ministry to look into levies?

G. Coons: One last comment I would like to get into is the environmental aspect as far as the port strategy. It mentions a challenge of the unexpected, unprecedented growth of protecting the environment. The strategy looks at the environmental impacts having to be mitigated.

I have to add my strong sentiments to this concern, especially considering when you look at a summary of a cruise ship coming into a port — a week's worth of cruise ship material. We look at the sewage: 210,000 gallons. We look at grey water: one million to two million gallons. Hazardous waste, as far as in that one week's time coming into port: 110 gallons of photo chemicals, five gallons of dry-cleaning waste, ten gallons of paint and so on — and solid waste, quite a bit of waste.

I'm wondering if there are any plans or concerns in the strategy to look at the environmental aspects of cruise ships and/or containers.

Hon. K. Falcon: If I understood the member's question correctly, I think I could say this: if there are any port expansion plans or work that is being done around port facilities, we — no question about it — will apply all of the environmental laws that are anticipated both provincially and federally to ensure that the highest possible environmental integrity is maintained.

I might take this opportunity to say to the member opposite that environmental outcome is a very, very big part of our ministry's value system. We have an environmental fund that we utilize to try and create opportunities, to protect the wetland areas, habitat areas, etc., so all the environmental regulations that are incorporated in British Columbia and federally will apply to any work being done around the ports.

G. Coons: As far as indicators out there with the ministry, are there any indicators that you are looking at lobbying the federal government to clean up their act as far as getting rid of their…. I guess the feds have voluntary self-regulation until 2010. When we look at our neighbours to the north and south, as far as Alaska and Washington State, they have very strict guidelines — basically, pollution prevention guidelines that meet the needs of our communities. Are you working with the Ministry of the Environment on some of the port strategy concerns with the environment?

Hon. K. Falcon: I think those are very pertinent questions, very important questions but also questions that would be best addressed by my colleague, the Minister of Environment. While I am one that does not like to actually have to say speak to another minister, in that case, I really have to say speak to the Minister of Environment, because I think he will be far more lucid and able to answer those questions appropriately.

G. Coons: Just a few concluding remarks here. I realize that it's getting late and I do have, hopefully, another hour to fill in, but I find it interesting that in the ministry performance plan summary on pages 23 and 24, there are linkages to the five great goals — the ministry's mission, goals and objectives and performance measures. But as far as the port strategy, it is only linking to the first great goal of creating more jobs per capita than anywhere in Canada.

I was truly optimistic that we could bring a great message to the smaller ports and the smaller communities throughout British Columbia that they're included in this ambitious plan, but I was disappointed to see no

linkage whatsoever to the province's second great goal of leading the world in sustainable environmental management with the best air and water quality and the best fisheries management bar none.

I looked through the port strategy and saw that there was a fairly important paragraph in there about protecting the environment. It says on page 11 in the strategy: "With the unprecedented growth expected in British Columbia's port system comes an increased need to manage the environment for the long term. This includes mitigating environmental aspects from increases in domestic and international traffic at port facilities and the need to meet standards of air and water quality set by all levels of government." This is a key priority. I would hope, just in my concluding remarks, minister, that your ministry works with the Environment Minister and links the second great goal of environmental concerns into the port strategy so that it's more well-rounded than I see it right now.

At this point in time, Chair, I'd like to get off the port strategy and get into B.C. Ferries for the next hour, if that's appropriate.

The Chair: Does the minister have staff to be able to answer the issues around B.C. Ferries?

Hon. K. Falcon: Yes, Mr. Chair, but if I could ask the forbearance of the member of the opposition…. Could I ask for a very small recess of a few minutes in scope?

G. Coons: At this point in time I appreciate the time from the minister and the staff, and the patience of everybody.

I'd like to get into some questions dealing with B.C. Ferries, if that's all right. Is anybody here from B.C. Ferries?

G. Coons: It's interesting that we spend so much money on B.C. Ferries and we don't have anybody here to report back to us in a public manner.

Was a capital asset management framework completed prior to the privatization of our B.C. ferry system, and is that available?

Hon. K. Falcon: I apologize for taking so long, but I was really trying to determine exactly what the question was because I'm not sure I understood it correctly. I think I understand where the member was going on that question.

At the time that we entered into the coastal ferry service contract with B.C. Ferry Services, there was a review done of all the capital assets associated with the Ferry Corporation, whether it be the vessels, the actual terminal facilities, etc. So there was a review similar to what I discussed on inland ferries, where you sort of review and everyone signs off on what the condition of the assets are, etc., prior to them assuming the operations under the coastal ferry service contract.

G. Coons: As far as B.C. Ferries, there isn't much information that we have I see throughout the estimates and the money aspects of this. I can see through the estimates that the amount has increased from last year to this year from $126,742,000 to $127,232,000. Why that increase?

Hon. K. Falcon: That would represent the CPI increase on the federal contribution that's made as part of the contribution to the ferry services.

G. Coons: Going through some old accounts…. I looked at the public accounts, and perhaps somebody could sort that out for me — the public accounts dated 2004-2005. It was estimated to be $125.7 million — I'll round it to seven — but the government transfer was $127.9 million, an increase of $1.2 million versus what we just saw. The difference I said before was about $700,000.

I was just wondering why the public accounts had that discrepancy from $1.2 million to $700,000?

Hon. K. Falcon: It wasn't actually a discrepancy. It was an increase in the cost of providing the social program portion under the ferry services contract arrangement.

G. Coons: I will perhaps clarify that later with your staff so I get a better understanding of it. Perhaps the minister could answer…. How does the government work with B.C. Ferries to find out how our $127 million is being spent?

Hon. K. Falcon: Well, it's a performance-based contract. As is typical in a performance-based contract, they are required to meet our minimum performance criteria. They must report those results to us on a regular basis so that we can determine whether, in fact, they are meeting the performance criteria. There are penalties in place if they fail to meet the targets that are set out as part of the performance criteria.

They are also required to do an independent annual customer satisfaction survey, which is an opportunity for the public to be asked a whole series of questions in terms of what their customer experience is on B.C. Ferries by an independent third party. Those results are

also reported back to us. We can talk about that some more if the member wishes.

G. Coons: I would hope that the independent surveys would go out to residents of coastal communities who have a real fear about what's happening and not just on the two major routes where all of the dressing up has been done by B.C. Ferries. The routes look pretty good down there, and the new ship's coming. That's something I do want to get into, as far as the northern routes.

Are there any requirements for B.C. Ferries or the government to report back to the Legislature on the taxpayer subsidies that we're paying?

Hon. K. Falcon: I just want to correct the member's terminology. We're not providing a taxpayer subsidy. What we are doing is providing payments for a service being provided by an independent private authority. Those payments are made directly to ensure that we receive a service, of which they are required to meet the strict minimum guidelines that I had in place.

The accountability that we built into place when we entered into the coastal ferry service contract is very substantial. You've got an independent B.C. Ferry commissioner. You've got an independent board of directors with, I might add, representation from coastal communities. You've got an annual general meeting that the ferry services are required to attend and undertake. And, of course, you've got the annual customer satisfaction survey, which is done on the entire fleet and receives customer satisfaction results from all aspects of the services that the ferries provide.

G. Coons: So in other words, there is no requirement to report back to the government or to the Legislature about B.C. Ferries service fees, as you call them. I prefer "tax subsidies," but that's just a bit of terminology. So there is no requirement to report back?

Hon. K. Falcon: The appropriation to the payments for the service that is provided by the B.C. Ferries services, of course, is something that is, as we are doing here, subject to discussion and question as part of the estimates process. They are now also subject to review by the Auditor General, should the Auditor General perceive a need, any need whatsoever, to investigate that. Of course, they do have to provide audited financial statements, which must be publicly released. To the best of my recollection, they publicly release those audited financial statements at their annual meeting that they are required to hold that is open to all members of the public.

G. Coons: So the Auditor General has access to the B.C. Ferry Services Inc. records and can do a report?

Hon. K. Falcon: Yes, the Auditor General would have access to all our records — any information we have that would demonstrate that the voted appropriation has been appropriately spent and that we have received the value for the dollars spent in providing the payments for the services.

G. Coons: I need to clarify this. The Auditor General has access to the government's records, but does the Auditor General have access to B.C. Ferry records?

Hon. K. Falcon: Yes, we have the right to call upon any and all records that we feel would be necessary from B.C. Ferries to allow the Auditor General, should the Auditor General wish, to examine any of those records to determine that the voted appropriation is meeting the terms that were set out.

G. Coons: I'm just wondering: in the all-inclusive "we," I'm not quite sure if you're including all members of the Legislature or who is…? What's your definition of "we have access"?

G. Coons: I'm getting used to that, if you heard my spiel about not being on a RAC with the NDI committee.

G. Coons: The breakdown of that looks like what — as far as the four, I think there are, areas?

Hon. K. Falcon: The breakdown is: the transportation fee is $91.9 million; the federal payment of the federal portion contribution is $24.89 million; the social programs is $8.742 million; and the unregulated routes is $1.7 million — for a total of $127.232 million.

G. Coons: As far as the breakdown for each route, is that available? And is that available for me to get this evening?

Hon. K. Falcon: It's not available at our fingertips, but we can certainly get that to the member opposite.

G. Coons: You were mentioning service fees and certain performance measures. Could you reiterate what those performance measures are, please?

Hon. K. Falcon: That would include the number of trips made by the vessels and the capacity available — in other words, how much traffic they can handle. Those will be reported out to us on what we call our quarterly fee reconciliations, where they provide that information to us, and we confirm whether they're

Hon. K. Falcon: I apologize. I haven't got the most recent quarterly report out, but I can tell the member that the total penalties assessed in fiscal '04-05 were — relatively modest, granted — $7,900.36. The bulk of the penalties related to missed sailings on Christmas and New Year's Day.

G. Coons: Earlier you mentioned that the government sees certain aspects for accountability. One of them is the independent commissioner. Who appointed the commissioner?

Hon. K. Falcon: The B.C. Ferry commissioner is appointed, pursuant to the act, by the Lieutenant-Governor-in-Council.

In my leisure reading, minister, I have a great thrill at reading the "Probes" topic on the commissioner's webpage. I'm just wondering if you peruse the probe topics from the commissioner about concerns.

Hon. K. Falcon: I haven't seen the probes category of the…. Obviously, it's not a government website. This is the B.C. Ferry commissioner's website. So I'm not entirely sure what he means by probes — though I imagine you are going to tell me.

G. Coons: Some interesting topics occurred. One of them was a probe topic that came up by the commissioner, and it was about the administrative overhead. B.C. Ferries' first quarter administration expenses to June 30, 2004 increased by about $600,000 over the same period last year, and the commissioner wanted to know what factors explain this.

B.C. Ferries' answer was: "B.C. Ferries' first quarter expenses are higher than last quarter due to the impact of Deas Pacific Marine and the new structure to support it. It became a subsidiary…and is therefore required to have a fully independent executive and board of directors."

Again, when we start looking at the direction that we're heading in our public marine highway and our transportation system, I just sort of see — and lots of constituents throughout the province see — higher and higher costs. Here is an example right here, and the commissioner highlighted that.

One other scenario. In one of his probes, he had a real concern about Route 25, which is Alert Bay, Sointula, Port McNeill. It suffered from one of the poorest schedule-adherence levels in the system — horrendous delays. It went from 52 percent up to 85 percent in delays. I'm just sort of looking at those situations where, as we move toward alternate service providers and privatization, there is a lot of concern about accountability and public interest.

I just was curious whether or not the ministry had kept up with probes, and I just wanted to bring that to your attention. As far as the ministry is concerned, what core business does B.C. Ferry Services fall under?

Hon. K. Falcon: Public transportation. One thing I want to add, though, to the member's previous comments that I think are important is: I think it is very encouraging to hear the member read out some of those points by the B.C. Ferry Commission. That is exactly what the role of the B.C. Ferry commissioner is all about. I think it's just fantastic that you have someone independent of government that actually looks at things like the expenses of B.C. Ferries and makes recommendations or at least asks the right questions.

Now, it sounds like they had an appropriate answer, and certainly, as I look at the corporation's financial statements, I can tell you that for the year ending March 31, the corporation shows net income of $39.8 million. That's a 42-percent increase from 2004. That strikes me as encouraging. As you know, net income is derived from income revenue over expenses. That suggests to me that they're actually doing a fairly good job of managing their expense side.

Over that same period, we have seen ferries carry 22 million vehicles. That, I believe, is the highest level of vehicle traffic in 45 years. It's up by more than 3 percent. The revenues were up 5.8 percent from the year before, at $564.5 million. Their first quarter of 2005 is up $14.4 million.

This, I think, demonstrates that we have a ferry service that is operating with a level of efficiency that we haven't seen in the province in many, many years. We also have the benefit of having an independent B.C. Ferry commissioner who will be very tough on ensuring that the public interest is protected and that those kinds of questions get asked — as he should.

G. Coons: I reiterate: going back to who appointed the commissioner. The minister says: "The government appointed." I find it really hard to be independent of government when the government has appointed the commissioner.

But, yes, I do get pleasure out of reading the probes and some of the concerns on the website. Actually, in the last two annual reports that the commissioner did and sent off to the government, he had a major concern about the reservation system. Could you reiterate that concern, please, on record?

Hon. K. Falcon: Yes, I am aware of that. The commissioner raised that issue in light of a general effort, I think, on the part of the commissioner to feel that perhaps he should have some overview on ancillary fees. I think that is an interesting argument. I would have to think that through. I'm not too sure whether we need to have a ferry commissioner looking at things like

what they're charging in the retail shops and what they're charging on, you know, terminal facilities, etc., for coffee and all that kind of thing. Nevertheless, I think in a very thoughtful way, the commissioner's raised that issue. It's something we'll study and in due course have comment on.

G. Coons: I'm glad that you're going to take that into consideration, because, as it was noted, the reservation system is ancillary, and part 1 of the Coastal Ferry Act has a potential for misuse of monopoly power. I think we're actually seeing that.

I'm getting many phone calls, communications from people really concerned about the reservation system, not only in the northern routes but across the province, and how it's being run. I think the commissioner has indicated to the government twice that this is an area of concern and something that should be acted upon. I'm glad you're going to take that into consideration. Could you just, perhaps, fill me in on what you could do to alleviate the commissioner's concerns?

Hon. K. Falcon: We are going to spend some time giving some thoughtful consideration to the issues that the commissioner has raised. At this point it would merely be irresponsible, speculative on my part, to talk about what we may or may not do, but we will look at it. We will analyze it.

While I understand some of the concerns that the member has heard about from some folks, I also know there is a huge constituency out there who feel that the reservation system works very well for them. I've heard this talked about many times on talk shows: it's something that works very well for them. So we have to balance something that is working very effectively between the concerns — legitimate concerns — that have been raised by the ferry commissioner.

I think the question I had was…. I'm under the assumption that when you first signed the contract, there was some differentiation between the routes, and you're going back to change that or negotiate that. I'm just wondering: what are the options available to the government, if the government is really concerned about reservation fees and the potential misuse by B.C. Ferries?

Hon. K. Falcon: Again, I'm really just rephrasing or reiterating an answer I just gave, which is that I won't get into speculating what I may or may not do to deal with the issues that were raised by the B.C. Ferry commissioner, because I don't think that would be responsible. Suffice to say that if government does decide they need to do something, then government has the tools and the ability to be able to do that.

G. Coons: Noting the time, and realizing that tomorrow, if it's okay, I will get back to Transportation and that I have another half-hour or 45 minutes or so to work on…. We will get back to my colleague, the critic for Transportation. Noting the time, I move that the committee rise, report progress and ask leave to sit again.

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