Hansard — Thursday, March 15, 2007 a.m.

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


Introductions by Members		6275

Tabling Documents		6275
	British Columbia Ferry Commission, Annual Report for the Fiscal Year Ending March 31, 2006
	British Columbia Human Rights Tribunal, Annual Report 2005-2006
	British Columbia Utilities Commission, 2005-06 Annual Report
	Crown Proceeding Act, report for fiscal year ending March 31, 2006
	Office of the public guardian and trustee, annual report, 2005-06

Petitions		6275
	Hon. W. Oppal

Committee of the Whole House		6275
	Child and Youth Statutes (Representation Improvement) Amendment Act, 2007 (Bill 7)
	M. Karagianis
	Hon. T. Christensen
	N. Simons
	L. Krog
	Hon. W. Oppal

Proceedings in the Douglas Fir Room

Committee of Supply		6286
	Estimates: Ministry of Transportation (continued)
	G. Coons
	Hon. K. Falcon
	C. Trevena
	D. Routley

L. Mayencourt: We are very happy today to have Judith Reid, the former member of the Legislature for Nanaimo-Parksville. She's come here to visit with me. I wish that the House would make her feel very, very welcome.

Hon. W. Oppal: I have the honour to present a number of reports. The first is the British Columbia Ferry Commission Annual Report for the Fiscal Year Ending March 31, 2006. As well, I have the British Columbia Human Rights Tribunal Annual Report 2005-2006; the British Columbia Utilities Commission 2005-06 Annual Report; the Crown Proceeding Act report for the fiscal year ending March 31, 2006; and finally, the public guardian and trustee 2005-06 annual report.

Hon. W. Oppal: I have a petition. It's a petition from six citizens from my riding regarding the Vancouver Family Preservation Services and child care services in British Columbia.

Hon. M. de Jong: I call in this chamber committee stage debate of Bill 7, the Child and Youth Statutes (Representation Improvement) Amendment Act, 2007, and in Committee A, Committee of Supply. For the information of members, it's continued estimates debate for the Ministry of Transportation.

The House in Committee of the Whole (Section B) on Bill 7; S. Hammell in the chair.

M. Karagianis: I do have some questions on section 4. I note that this section does give the director discretion on the kind of reviews that can be conducted, and it says that the director may conduct a review in matters pertaining to the provision of the service under this act. I notice that the word "may" is very permissive and very broad.

I would particularly like to ask the minister about the recommendations that came from the Hughes report that were very specific and very prescriptive around a recommendation that there should always be a review in the circumstances of death or critical injury of a child. Further, Mr. Hughes said that the ministry review injuries and deaths not only of children who were receiving ministry services but that children who had received services in the past 12 months also be included in this.

I would ask, on both of those: could the minister address the issue of whether or not this in fact addresses the Hughes recommendations that there should always be a review and that it should extend to children who had been receiving services — not only currently receiving services but in the past 12 months or greater?

Hon. T. Christensen: I should just take a moment to confirm for members that I will be conducting part 1 of the bill, and then the Attorney General will pick up from there. I'm pleased to be joined today by a couple of very able staff from MCFD, Cynthia Callahan-Maureen and Mark Sieben, who will assist us today.

I appreciate the member's question. Certainly, the intent of section 4 of the bill is to fulfil the recommendations of Mr. Hughes to put into legislation the practice that is already occurring in the ministry around reviews. I want to assure the member that our current quality assurance standards do require a review in the event of a death or a critical incident, which could include an injury to a child in care.

It's important that there be a recognition, though, that in terms of children in care, unfortunately, there are a number that are in care and the death isn't unexpected, in the event that they have a severe illness, a severe disability. So the death, unfortunately, isn't an unexpected event.

Really, what the permissive nature of "may" provides for is the discretion of the director in the extent of the review that is required. In the event of an unexpected death of a child in care, I can assure the member that it's a very thorough review that the director does conduct.

K. Conroy: Today joining us in the gallery are 31 cadets and six officers from the Kootenay and Hampton Gray Royal Canadian Sea Cadets Corps. They are

accompanied by commissioned officers Lieutenant Chanig and acting Sub-Lieutenant Fortune. Would you all please join me in making them welcome.

M. Karagianis: Thank you very much, Minister, for both the introductions and for the answer to the first question.

Certainly, I understand that the sort of broad language around "may conduct a review" and "may establish different types of reviews" is meant to be flexible. I have no doubt in my mind whatsoever that the children's representative, who will be carrying out these duties, will have some opinion on whether the language needs to be amended at any point.

One of the other things that the hon. Ted Hughes was very specific about was the use of multidisciplinary teams in the child death review process as well. In fact, I know that the children and youth officer has also made reference to that. I do not see specifically in this legislative language any acknowledgment of that or, in fact, referral to that.

Could the minister perhaps address whether or not that can be included in some way?

Hon. T. Christensen: I think it's important that we distinguish in this discussion between the director's reviews, which are encompassed by this bill and by the Child, Family and Community Service Act; the death review unit, which is a unit within the coroner's office; and then the representative. All of those are different potential levels of review in the event of the death of a child.

In respect of the director's review, the director, who is mandated by the Child, Family and Community Service Act…. Certainly, depending on the circumstances of the death, the practice is to involve a multidisciplinary team to ensure that all the relevant information is brought together, particularly in the event of the unexpected death of a child in care. Our current standards require that, and that has been the practice. In the future if there was a difficulty in that regard, this provision would allow that regulations could make that more specific. But that is the current practice.

M. Karagianis: I appreciate the fact that regulations, obviously, will help to address some of these.

The last question that I have on this section again pertains to the Hughes report. I know that the hon. Ted Hughes made a recommendation that twice a year the Ministry of Children and Family Development publicly release a summary of child death reviews — those that have been completed in the past six months. Although again, there is no specific reference to that, perhaps the minister could address how in fact government may be going to respond to that recommendation from Mr. Hughes.

Hon. T. Christensen: I appreciate the member's question, because it's an important issue around accountability in terms of the public having confidence in the operation of the ministry. We are certainly intending to post on the website a summary of child death reviews, in accordance with the recommendation that Mr. Hughes has made.

I would note, as well, that the intent — and it's embodied by the amendments to section 79 of the act that I believe section 1 of the bill addresses — is that the amendments to section 79 will allow the director's case reviews to be written and prepared in such a manner that they will be released so that there will be substantially more information available to the public in terms of these child death reviews.

N. Simons: Thank you to the minister for being here to answer questions on section 4. My understanding is that these are internal ministry reviews that aren't subject to external oversight, unless requested.

I'm just curious as to whether or not these have any precipitative involvement with further reviews. In fact, are the administrative reviews precursors to others? Is there any relationship between these reviews and what the representative will be doing?

Hon. T. Christensen: These are reviews that are conducted by directors within the ministry. One of the primary purposes of the review is to improve practices. They're an internal review in terms of our own review of what has happened and what the practices are.

In that respect, they're independent of any review that the coroner or the representative may conduct. Having said that, when these reviews are completed, we would certainly be making them available to the representative — and the coroner, for that matter.

N. Simons: Section 93, which is amended by section 4 of this act, speaks to the provision of service and not the actual service itself and the policies surrounding that service. Is the internal director's administrative review relegated to examining the provision, or does it have the opportunity for self-analysis in terms of the actual policy that is being provided?

N. Simons: Could the minister please direct me to the section where it indicates that that is possible?

Hon. T. Christensen: I'm advised that the interpretation of the legislative provision would include the ability to look at the context in which the service is provided, so you're able to look at the service as a whole, including the actual provision of the service.

N. Simons: Well, I would point out, with respect to the minister, that it is not in law that that will be possible. I worry that the mistakes of the past could be repeated, because an internal review, in the case of the precipitating

case bringing this change before the House, would not have permitted that review to go to a next stage.

The review of the act, review of section 8…. The policy itself wouldn't be reviewed under this section. I don't see any place, unless…. It wouldn't be required to be reviewed. I'm just concerned, if it's not here, how that's going to be addressed. Perhaps it'll be addressed under the representative's responsibilities.

I'll put it in the form of a question. Would that be the responsibility of the representative to review the actual policies that the ministry is providing?

Hon. T. Christensen: The scope of the director's review is determined by the terms of reference for that review, and those terms of reference are determined by the director.

Ultimately, the representative will be in a position, on review of the admin review or the director's case review, to make a judgment as to whether or not the terms of reference were sufficient. If the representative were to believe that the terms of reference were not sufficient, she would then have the opportunity to review further.

N. Simons: These administrative reviews are, in fact, what's commonly known as director's reviews — not the same as director's case reviews? I'm suddenly a little more confused than I was, and I'm looking for some clarification.

Hon. T. Christensen: Section 4 of the bill actually adds section 93(1), which is titled "Administrative reviews," and section 93(2), which is titled "Reviews relating to services." I'm going to ask the member, if he will, to clarify which of 93(1) or 93(2) we're talking about so that I hopefully avoid both the member and me getting confused about where we're at here.

N. Simons: Yes, it is slightly confusing. I think what we need to clarify is that what is happening is simply the splitting of the potential director's review into two possible streams, one being more intensive than the other. Suffice it to say, there are other concerns that I have with this particular one, with 93(2). I'm just concerned about the impact on ministry services that are delegated to other agencies to carry out.

For example, have first nations child welfare agencies had any involvement in the development of this particular section? Are they consulted? Do they know about it? Are they aware that the ministry can come onto the reserve, onto band land, and conduct reviews into the services that first nations service providers are providing?

Hon. T. Christensen: The intent of section 93(2) in terms of the director's case reviews is to confirm what in fact is the practice now. Mr. Hughes recommended that we set a legislative basis for that practice in the act. That's fundamentally what these sections do.

Last spring you'll recall that when the legislation establishing the representative's office was first introduced, some amendments were made at that time. This is simply an attempt on further reflection and an opportunity to consult, given that that initial bill was introduced quickly. This is really an opportunity to simply clarify what types of reviews will be done and provide that legislative basis.

That's a long way of saying to the member that certainly the delegated agencies are aware of the ministry's ability to come in and the director's ability to come in and review services, to review critical incidents or deaths, and that this certainly doesn't come as a surprise to the delegated agencies in terms of the work that we do with them on a continuous basis.

M. Karagianis: I do have some questions with regard to section 6, and I'm sure it will come as no surprise to the minister that this side of the House does have some concerns. There are two aspects of this section: (1) that it certainly does grant cabinet regulation-making powers to determine the criteria to be used in a review, and (2) it specifies the requirements to be followed to release a final report.

Certainly, we've had considerable debate in the House recently over language in the Public Inquiry Act that contained very similar criteria constraints. So I would like to ask the minister why cabinet would have regulation-making powers here or any authority to specify the requirements, especially given the very clear competency of the new children's representative and the independence of that office, which was a very critical part of the creation of that. It was a very critical outcome of the Hughes report.

I'm very concerned that this power has been granted outside of that independence, and I'd like to hear the minister's comments on why this has been done this way.

Hon. T. Christensen: I want to be very clear, because just the way the member posed the question, I'm not sure she's making the distinction.

This provision in no way impacts what the representative's work is. This is geared specifically towards the internal workings of MCFD and our director's reviews. It's important that this section be read in conjunction with the amendments to section 79. Together they actually provide for a greater accountability and a greater ability for the public to be able to go to a regulation and recognize the criteria by which a report is being released, because currently that doesn't exist.

The way the Child, Family and Community Service Act works generally is that the director can't release any information unless section 79 allows the information to be released. The amendments in this bill broaden the ability for the director to share information — again, in

the interests of full disclosure or as much disclosure as possible respecting privacy and also in the interests of being able to share information for the purposes of conducting more thorough reviews.

Where the criteria that the director must apply in conducting a review or the criteria that must be applied in terms of releasing a finalized report have, in the past, been determined by policy — and in most cases have been very restrictive because section 79 didn't allow for the release of information — the amendment to section 79 ensures that more information can be released.

What this provision ensures is that the regulation will be clear in setting out for the public to see what those criteria are. Everything is up front and open and accountable, so people can recognize what information they should expect to be released.

M. Karagianis: I somewhat understand that, and I do also understand the distinction between directors' duties and the children's representative, although all those reviews make significant connection with what the children's representative is going to do.

My concern here is really around the very specific language specifying the criteria and specifying the requirements around releasing the final report. This is all a very important stream of information both for the public and for the children's representative to use. The fact that there would be language that allows for a final report in any way to be prescribed concerns me greatly.

I would appreciate the minister explaining or answering how the cabinet being able to regulate or specify how a final report is released, in fact, is not seen as a barrier to the freedom of that information.

Hon. T. Christensen: I want to be clear that the representative and the coroner would always get the full report without any information removed. I think it's important that the public recognize that.

The regulation-making power is intended to allow the regulation to balance the public interest in as much disclosure as possible with the privacy interests that are inherent in these types of reports, given the information they're dealing with. The regulation doesn't allow a report to be reviewed by cabinet or for cabinet to have any involvement in what's in the review.

What the regulation simply is intended to do is specify the criteria that a director must apply in conducting the review and then specify the criteria and the rules around balancing the privacy and public interest in releasing the report.

Certainly, our intent — again, it comes back to section 79 as well — is to ensure as best we can that these reports are being written in a way that they're minimizing the personal information but having the full accountability. Obviously, that can be a challenging balance.

As the member knows, one of the challenges today is the way the reports are written, because they've been written to be primarily internal documents for the director and for the ministry. When somebody requests to see one, they get a document that's pretty much illegible. Most of the information has had to be removed because it deals with personal privacy. We're hoping that in the future, we'll have those reports in a way that they're much more useful from a public accountability standpoint.

M. Karagianis: I certainly appreciate the need to always balance that accountability and openness with the need to protect people's privacy.

One more question for the minister. By specifying the requirements to be followed to release a report, would it allow government to delay the release of a report for an extended period of time?

Hon. T. Christensen: Under section 79, the only way that the director has the ability to release information is in accordance with the regulation. It is the director's decision as to when the report is released. It's not my decision or cabinet's decision.

The way this legislation actually works is that the director is pretty arm's-length from the minister. The director has a host of powers and obligations that lie with the director rather than the minister, even to the extent that there is information the director is privy to that the minister is not privy to, which is a bit of an interesting situation sometimes.

The regulation power doesn't in any way fetter the director's obligation and the director's decision as to when a report is released. Once the legislation is passed, then we have the regulation finalized. The regulation, as anticipated at this point, will essentially rely very much on the provisions of the Freedom of Information and Protection of Privacy Act in terms of that balancing of the privacy interest and the public interest.

M. Karagianis: I guess that begs the question as to why this particular clause has been included in the bill, if there are a number of other provisions that satisfy the end goal. Why is this rather prescriptive clause and language included here if it is redundant?

Hon. T. Christensen: When this legislation was first drafted and passed by this House back in the mid-1990s, there was a very conscious decision to really separate the handling of information by the director from the Freedom of Information and Protection of Privacy Act so that the director isn't obligated to handle information under that act.

What section 79 does is set out the circumstances in which the director can share information. In the absence of the amendment we've made to section 79 that allows the director to release reports, the director has no ability to do it. There's an absolute prohibition on releasing the report, except for the amendment we've now made.

We've taken the first step of saying: "Okay, we're going to amend the act to ensure that the director has the power to release a report." We then said that the

This regulation-making power is absolutely necessary to actually put some direction around how the director will release that report and what the director will release. Otherwise, quite frankly — and this may be a ridiculous example — the director could simply release a report that didn't have anything in it, a bunch of blank pages, and say: "Well, we've released the report."

What the regulation will do is direct the director to release the report subject to protecting the privacy interests, with a specific reference to the Freedom of Information and Protection of Privacy Act.

Perhaps anticipating a question from the member, one option may have been to simply incorporate a number of provisions of FOIPPA into this act. I think that when the act was first drafted, there was a clear recognition of the unique position of the director and the need to be a little more deliberate and cautious in balancing information interests as set out in FOIPPA. The regulation simply provides a little more flexibility around that in the event that some further change is required in the future.

What's critical here is that for the first time, there's now actually going to be the ability of the director to release these reports, and the regulation will clarify how that's done with specific reference to the freedom-of-information and privacy protection provisions. And just to be clear, it's section 79 of the act that actually remains the authority to disclose the information. In the absence of the amendment to section 79, the director wouldn't have the ability to do it.

L. Krog: Hon. Chair, my question to the minister revolves around what appears to be a continuing problem with governments in general and with this government in particular, and that is the removal of the Legislature's direct right, if you will, to review legislation. This provision allows cabinet, by way of regulation — which will not be discussed here, which will be passed by the Lieutenant-Governor-in-Council — to determine certain things which, frankly, could have been, I submit, included in this statute.

There was nothing to stop the government from including the criteria that this section talks about — the criteria, the rules, the requirements, etc. — and actually putting them in the legislation as opposed to giving that power to cabinet to do it by way of regulation.

The reality is, and I hate to admit it, that in the complex world of government with an opposition, with the kind of funding that it has available to it — and this applies to any opposition — regulations get passed by cabinet. They may generate a tiny bit of press, but there's no opportunity for debate — none whatsoever.

I simply want to ask the minister…. In these circumstances — given the importance of this area, the concerns that have been raised in the public, the attempt to depoliticize this whole area as recommended by Mr. Hughes in his report — I'm wondering why we don't include the criteria in the legislation as opposed to giving that power to cabinet.

Hon. T. Christensen: I appreciate the member's question, and it's certainly a fair question in light of the importance of what goes on in this place. I would submit it's a particularly important question in that we're talking about personal private information here — very sensitive information potentially. So there are a number of points that perhaps I should make.

This is a new ability to disclose information that's being provided within section 79, which is what the regulation pertains to. It's not an ability that has been there before. It's also a power that is unique to British Columbia's legislation. Apparently, it's not something that is a power of directors or positions similar to directors in jurisdictions across Canada. If the handling of this information is not done correctly, there is potentially a risk of considerable harm.

We've been deliberate but cautious in approaching this. It's true that legislating an ability for the director to be disclosing information in this way is not something that government in this province has done before. We have consulted thoroughly with the Information and Privacy Commissioner in terms of the approach that has been taken here. The Information and Privacy Commissioner is supportive of the approach that we are proposing and that he will continue to have, given his broad obligations — an oversight role in terms of how government is handling this type of information.

We thought, given all of those factors and particularly the fact that this is something new and that there is a potential risk of harm in the event that information was disclosed improperly, that it was best to retain some flexibility by allowing the criteria to be set by regulation. Again, that regulation becomes a public document, so the public will certainly have the opportunity to comment and review whether or not they believe any criteria are too restrictive — or too open, for that matter. We believe that certainly it was prudent and responsible to retain that flexibility in a regulation-making power rather than entrench it in legislation at this point in time.

L. Krog: I appreciate the minister's comments in response, but the fact is that you've already let the horse out of the barn. By the time it becomes regulation, there is no opportunity to comment on it other than to say: "We don't like it." There is no opportunity for input.

Regardless of what one may feel about the importance of the work that is done in this place, if it doesn't come before this Legislature, then you deny the opportunity to members of the opposition and indeed members of the government, arguably, who are not in cabinet to provide what may be important and valuable input.

There is in our caucus an individual who has a great deal of experience around reports, who might be able to offer some very useful suggestions in an area like this.

I want to repeat my concern, and I've repeated it in this House around various pieces of legislation. This is the drive of modern government to take the opportunity

for criticism, for contribution and for amendment out of the public debate that should occur in this place and place it in the hands of cabinet and the public service.

Now, I happen to think we have a wonderful public service in British Columbia. Nevertheless, they are the servants of elected officials, and cabinet are just a few of the members who are elected to this place.

When we continue to do this, we continue to deny the essence of what I believe is democracy, which is a free and open debate and contribution from Her Majesty's Loyal Opposition to the government side. I would suggest strongly to the minister that the government reconsider this particular provision — that the criteria, when they are developed, do something dramatic. I suggest to the hon. minister that he send a draft to the critic. If we are going to do what Ted Hughes told us to do — to try and depoliticize this whole process — you don't depoliticize it by restricting it to the secrecy of the cabinet chamber.

You do it by having open discussion. You do it by submitting it to a standing committee and the child and youth representative. You do it by that kind of provision. You don't do it by continuing to pass legislation that continues to give authority to cabinet to make the regulations in the absence of contribution from either the opposition or the public through the opposition.

Hon. T. Christensen: I appreciate the points that the member opposite is making, and certainly I am quite prepared to have a discussion with the critic around the regulation in terms of what we're trying to achieve there. I think the interest is to find that delicate balance between public accountability and ensuring that we're avoiding or minimizing the risk of any harm that could come from the release of information that shouldn't be released. Certainly, I'll follow through on the member's suggestions on that front.

I will emphasize, though — and the member is free to disagree with me, as I'm sure he probably disagrees with me on a number of things — that in balancing what should be in the legislation versus what should be in the regulation and what perhaps would benefit from the flexibility in a regulation…. As I said in my earlier answer, given the consultations we've had with the Information and Privacy Commissioner and given the fact that this is a new step in terms of giving the director the ability to release information, we did feel that it is prudent to have the flexibility that a regulation-making power provides here.

L. Krog: I don't wish to unnecessarily belabour this point this morning, because I think everyone in this House knows that we are very fortunate to have appointed a marvellous child and youth representative, a first-class candidate. The minister's response indicates to me what I think a lot of people have forgotten about the purpose of this place. We're here to pass laws. We're here to provide restraints on how people conduct themselves in British Columbia, including every one of Her Majesty's citizens, and that extends up to and includes the Lieutenant-Governor-in-Council.

The point is to have an open process by which those laws are determined, and those laws and regulations are now often the biggest part of what people see when it comes to dealing with government. Nobody looks at a statute anymore; they go to the great whack of regulations that get changed regularly by government. There is no opportunity, and this is, again, just one more example.

The minister talks about flexibility for government. I have news for the minister. The point of passing laws is not to give flexibility to government; it is to restrain government. It is to restrain the public service. It is to restrain the activities of people, unless you're passing some kind of law that enables people to do certain things which they couldn't do before.

When we are talking about specifying criteria, I have not heard from the minister this morning any good reason why the criteria that are to be specified for a director in exercising his or her discretion to conduct a review…. I have not heard one good reason as to why that couldn't be brought before this Legislature.

I'll give the minister a final opportunity to explain to me why it is that this legislation couldn't have simply provided here today the criteria. I'm not for one moment, with great respect to the minister, going to believe that the able public service that looks after him and his ministry hasn't already figured out or is in the process of figuring out exactly what those criteria will be.

Hon. T. Christensen: The member speaks of the purpose of legislation being to restrain. I think he alluded to it perhaps being to allow things to happen too. When we look at this act, particularly the issues around the privacy of information and the release of information…. The purpose of this act — and the balance that the act together with the regulation will try to strike — is to provide the opportunity, in this case to the director of child protection, to release information and restrain too much release of very personal information.

I would simply re-emphasize to the member that this the first jurisdiction to attempt to do this in legislation and that this is the first time that British Columbia has attempted to do this in legislation. The risk of harm, given the information that may be contained in a director's review, is such that we believed it was prudent and responsible to retain the ability that a regulation provides to change that regulation relatively quickly, rather than having to recall the Legislature in the event that we don't get that balance right.

For example, in the event that the disclosure of information ends up being something that, quite unintentionally, we find actually has the potential to result in real harm, we would want to be able to change that quickly.

I'll reiterate. We're happy to discuss the draft regulation with the critic because I appreciate the member's views in terms of an opportunity to comment and question and provide suggestions. That doesn't change my view that it's prudent and responsible, given that this is a new direction for the director, to retain the ability that a regulation provides to make an adjustment if that becomes necessary. Certainly, it's not my expectation at this point that an adjustment will become necessary, but we want to be able to respond quickly in the event that one does, given the potential harm that could result.

N. Simons: I'm not sure why the minister keeps talking about freedom of information when, in fact, I believe that this section also outlines the specific criteria a director must apply in conducting a review and putting that in regulation. Am I missing a point here? Is this all about FOI and section 79 of the CF and CS Act? I don't think so.

This is about what the director can do, what scope the director will have in doing analysis. The director, of course, is anybody delegated as a director in their ministry.

I'm wondering: can the minister address the issues of concern around the scope that the director is putting on these reviews — and not on the freedom-of-information stuff, because that's a red herring in this situation?

What we're actually asking is why the Lieutenant-Governor-in-Council, why cabinet has to dictate what its employees are reviewing when that information could potentially be damaging.

Hon. T. Christensen: This is a new power that's being incorporated into the legislation. It's not something that's being moved from legislation into a regulation. I want to emphasize that the regulation-making power doesn't in any way fetter the discretion of the director in terms of proceeding with the review and what they report in terms of that review.

The current practice is that the criteria to be applied in conducting a review are set by policy. Historically that hasn't been a significant challenge, because we had one director in the province. There is a provincial director of child protection. We now have regional directors of child protection as well. The intent, by policy, is to ensure that we have some consistency across directors and across the province in terms of the types of things they're looking at in conducting a review. The hope is to provide some consistency.

Quite frankly, we could remove this provision from the legislation and simply continue to set those things by policy, which has been the practice for a good long time. We thought that it was reasonable to incorporate in the legislation a regulation-making power, again so that in the event that government chooses to exercise that regulation-making power, you'd have a regulation that set out the criteria. That would be open and transparent for people to see. But we don't have at this point a draft regulation prepared in this respect.

Certainly, for the immediate future we'll continue to rely on the policy, but we'll be looking at if we can draft a regulation in a way that provides the public a greater sense of what it is the directors are doing in terms of conducting their reviews and that works on the ground in terms of the day-to-day work the directors are engaged in as they conduct these reviews.

N. Simons: I won't belabour this either, except to say that the failures of the previous system, when rules about what the director reviewed were in policy, were clearly pointed out in the succession of reviews following the death of the little girl from Port Alberni. That was the fundamental flaw: the original terms of reference set by the director and then the change of terms of reference by the director subsequent to that. This was all without any oversight, and this was all before the child and youth officer knew about the case.

For months the director, because of the director's ability to design what was going to be examined and how it was going to be examined and when it was going to be examined, was the problem. That was supposed to be addressed here.

I caution that this is something I think needs to be looked at by the Representative for Children and Youth, because it is essentially changing into regulation what was a problem in the administration of policy. Potentially we have the legitimization of a failed process through the establishment of this practice and regulation.

I offer that as a comment. I would wonder if the minister would care to respond.

Hon. T. Christensen: Mr. Hughes made a specific recommendation. It is recommendation 36, that the ministry develop clear criteria to guide the decision as to whether to review the death or critical injury of children who are receiving or have received ministry services.

He didn't suggest that we put that in legislation or put that in a regulation, but we felt that it made sense to enable us, through a regulation-making power, to put it in regulation. That would make it more transparent to the public and increase accountability.

Certainly, the ministry is currently reviewing the standards relating to reviews of children's deaths. That review will inform what ultimately might be in a regulation around the criteria to be followed.

M. Karagianis: I will certainly accept the offer of a discussion on the previous regulatory debate that went on and will set up a meeting to further pursue this. I appreciate that offer.

Section 7. First, I'd like to clarify that there will be a shift of responsibilities at some point here — apparently now.

Hon. W. Oppal: I wonder if I could have the indulgence of the House while my assistants come in here. I'm responsible for part 2.

M. Karagianis: That certainly answers my question as to at what point do we shift from Children and Family's responsibilities to the Attorney General.

Section 7 and section 9 probably pertain to the same questions I'm going to ask here, but section 7 expands the definition of designated services for the children's representative and certainly has taken into consideration child care services, children receiving addiction services, and others. But sort of blatantly missing from this list are children in the home of a relative.

Certainly, in the general debate on this bill it would be no surprise to the Attorney General that I'm asking questions on the scope of the representative's responsibilities being expanded to very specifically include and refer to children in the home of a relative. We know that this particular group of individuals…. There are many within the province, numbering in the thousands. In fact, it is within this very group that the genesis of the Hughes report was born. Many of the subsequent actions that government has had to follow, including the instatement of a children's representative, actually came out of a situation that occurred with a child in the home of a relative.

As these children are not specifically identified as receiving ministry services or government services, they appear to not be covered in the legislation. I would ask the Attorney General why this particular group has not been included in this list of new designations.

Hon. W. Oppal: That issue is now being considered. At this stage the objective is to deal with those issues that Mr. Hughes recommended. But the question of children who are in the home of relatives is currently being reviewed by government.

M. Karagianis: Is it the intention, then, of government to either amend legislation once further consideration has been given, or is there some other mechanism? Why in fact would amendment not be possible here at this stage?

Hon. W. Oppal: We are in the process of consulting with aboriginal groups so that, when a review is done, then obviously the government would address that issue.

M. Karagianis: To clarify how that might take place, I appreciate that consultation with the aboriginal community is pretty essential to this because the children who are in the home of a relative primarily fall under their jurisdiction and within that group. I would ask the Attorney General: what would you see as the mechanism whereby you would then respond? When the consultation has been done, would you then come back and amend legislation to include this group? Or are you looking at some other mechanism to actually build that protection in and identify that group specifically?

N. Simons: I thank the minister for being here to answer questions on section 7. My question is: when it refers to "funded by the government," can the minister please tell us which government?

N. Simons: I should point out to the Attorney General that there are a number of child welfare services that are funded by the federal government, there are a number of child welfare services that are funded by first nations government, and all of those are provided through the same bodies. The social workers on first nations communities are hired by the band and paid for by the federal government to enforce the Child, Family and Community Service Act.

I would like some clarification as to whether or not the delegated and non-delegated functions of first nations child welfare agencies are covered by this section.

Hon. W. Oppal: Constitutionally we are precluded from doing that, because those are federally funded services. We are responsible for only those child services that are funded provincially.

N. Simons: In other words, subsection (a), the definition of designated services, does not apply on reserve.

Hon. W. Oppal: The exception to that is unless they're funded pursuant to an agreement with a director who deals with the provincial government.

N. Simons: As I brought up during second reading of the Representative for Children and Youth Act, I think that there's a bit of a problem here because of the fact that many child welfare services to children on reserve are not necessarily those prescribed by the Child, Family and Community Service Act. Nor are they covered by agreements between the federal and provincial governments such as 20-1.

They are cultural programs. They're programs that introduce children to or reinforce their cultural ties. They are programs that are sometimes residential, and they certainly do fall, in my opinion, under the mandate of services to children and families. I think that there needs to be some clarification as to the scope of the authority of the Representative for Children and Youth, and I think it's probably a good opportunity to do so before this legislation is enacted.

Will the Attorney General be able to clarify for the representative, for the first nations directors and for the ministry what in fact the scope is of the representative's authority as it relates to services funded by the government for children and their families — or for

children and families provided under an enactment or funded by the government? Essentially, it's the same question.

Hon. W. Oppal: If my understanding of the member's concern is correct, he would want the provincial government to oversee services that are otherwise provided by the federal government, and that's constitutionally improper.

N. Simons: With the greatest of respect, the services that are being provided, I will repeat, are provided by social workers who are hired by a chief and council in order to enforce the Child, Family and Community Service Act with the funding of the federal government. There is a direct relationship between the federal and the provincial government in the provision of child welfare services.

What I believe we have here is a crack, a loophole, a missing link between the need for an independent body to review services to children and the inability to do so in first nations communities.

Hon. W. Oppal: If the services are provided by a director who is under an agreement with the provincial government, then they would come within the scope of the representative.

N. Simons: I appreciate that response, and it does actually confirm the fact that many child welfare social workers working on reserve in first nations communities under the authority of chief and council will sit in a kitchen and talk to a young person and say: "I'm talking about your foster parent, so I'm talking about a delegated service. I'm talking about a service designated as one that is going to be reviewed by the Representative for Children and Youth." I change the subject, and I talk about that child's need to go to the camp up in Vancouver Bay, to talk about addictions problems for a youngster.

This is a program that might have been funded solely by the band, but it is implemented by the very same director whose hats are worn by three different governments. I think that clarification is required in this respect. Is the Attorney General able to provide me with some clarification on this issue?

Hon. W. Oppal: I don't know if further clarification can be provided than that which I have already provided. With the greatest of respect, it's clear as to where the demarcation line is.

I appreciate the concern of the member, but there really is no confusion as to what the scope of the representative is in regard to those particular services.

N. Simons: With the respect back, I believe that this is a potential problem that I am going to point out when it comes to the administration of the Representative for Children and Youth Act equally across the province, to all the children who deserve the protection that act offers.

I highlight it as a concern that needs to be addressed. I believe that it can be addressed, and it may even be addressed in a process other than the one we're currently undertaking. Without further ado, I point that out for the benefit of the Attorney General.

M. Karagianis: Again, referring back to the same discussion we had on section 7 with regard to section 9, where there is a description of the functions of the representative, I've asked the Attorney General why it is not possible to amend section 6(a)(ii), "advocating on behalf of a child receiving or eligible to receive a designated service," and why in fact it is not possible to include in there children in the home of a relative as being one part of that category.

Hon. W. Oppal: As I will reiterate, consultations are underway with aboriginal communities. As soon as the consultations are completed, those issues will be addressed by way of regulation. Obviously, it's the intention of the government to deal with that, but these are issues that are somewhat complex, and we must consult with our aboriginal partners.

M. Karagianis: With respect, I appreciate that children in the home of a relative often are aboriginal children, but not exclusively are they. In fact, many children in this province that are in the home of a relative and seen as not receiving services of the ministry are non-aboriginal children.

I think it would, at this point, appear logical that the expanded language under this section does not preclude consultation, does not in any way create a barrier to consultation with first nations communities, but incorporates a significant number of children at this point who are not designated as being under the responsibility and eye of the new representative.

It makes perfectly logical sense to simply expand that description, which in no way precludes any of the actions that the Attorney General has referred to. I would ask why we could not incorporate that simple language change.

Hon. W. Oppal: As I understand, the member's concern is with non-aboriginal homes. If there are protection issues arising there, those can be dealt with under the present legislation.

M. Karagianis: In fact, I was alluding to the fact that not all children who are in the home of a relative as a form of care are first nations. The group of children in the home of a relative is broad. It includes both aboriginal and non-aboriginal communities.

My question to the Attorney General at this point is: why cannot simple language be incorporated into this act that includes that group? Logic tells me this does

not present any kind of barrier to the kind of consultations that the Attorney General has referred to. So why can a simple language change not be made that incorporates this group and allows the continuation of consultation for further regulatory refinements?

Hon. W. Oppal: That child would be subject to an income support program, so there's a distinction between the two.

M. Karagianis: In fact, the children's representative has publicly stated today that she would agree that her responsibilities should include children in the home of a relative, and the fact that they are not seen under the current government view as children receiving services precludes them from having that protection and advocacy role from the representative.

Really, what I'm questioning today is whether or not the Attorney General would entertain an amendment to the language that simply expands the definition here to include that group. We certainly have seen that the children's representative sees that her role should and could encompass that group and would support a change in the specification of that responsibility.

I believe this is the perfect place to put it. I don't actually at this point understand what the barriers would be to expanding that language to include those children in this. We're talking about a large number of children living in the home of a relative. Currently they are not eligible under the legislation as written under this bill amendment as presented today.

Certainly, even by the Attorney General's own admission here, a consultation process is underway with a part of this group — with the number of these children who are included in the aboriginal community.

But for all children living in the home of a relative who are not currently seen as receiving services, to include them in the protection and expansion of the responsibilities of the new children's representative would seem logical. It would seem pertinent and certainly follows the whole historic path that has led us today to the new children's representative and to some of these legislative changes.

Again, I would ask the Attorney General to explain to me why, in fact, these simple amendments could not be made now.

Hon. W. Oppal: That program has been historically under the jurisdiction…. It's an income support program. We're not prepared to make any amendment at this stage without any proper consultation based on what someone may have said in the paper.

The fact is that we are regularly consulting with the representative. We will further consult with her. We will consult with the aboriginal communities, and we'll move forward from that.

N. Simons: If I could follow up my hon. colleague from Esquimalt-Metchosin's question around a child in the home of a relative. It's a program called CIHR. It's administered in most of the province by income assistance workers. It allows young children, where there is no known case of protection concern, to live with a relative, and that relative is able to receive some funding for the care and support of that child.

Now, with recent restrictions in social workers' abilities in placing children in voluntary care agreements — or short-term care agreements, as they used to be called — there's an increased reliance that social workers have on families taking up the slack. Sometimes that responsibility expands beyond the capacity of the family taking up that slack. Consequently to that, children are placed in homes that should, perhaps, have some review of their capacity to care for a child.

That is clearly a responsibility of the Ministry of Children and Families, whether they're exercising their authority on or off reserve. On reserve, I might add, the program is not called CHIR — Child in the Home of a Relative; it's called guardian financial assistance, and it's GFA. The social worker is required to check into the condition of the home prior to placing that child.

That's a federal government form, with the little maple leaf in the corner in the red. It's guardian financial assistance, and social workers or financial workers on reserve are expected to okay those placements. When they okay those placements, they are in fact exercising some authority as providing care to a child.

Will those services be covered by the authority of the Representative for Children and Youth?

The earlier scenario that the member gave during the opening part of his question is something that falls within section 14 of the act, and the director would have jurisdiction to deal with that.

N. Simons: Once again, I'll say what I said at the closing of my last series of concerns about a previous section. I believe this to be a problem in this act. I believe it to be a loophole, a crack in the system that has the potential to allow certain young people not to be covered by the protection of the neutral and independent Representative for Children and Youth.

Once again, I point it out for the information of the Attorney General. With that, I have no further questions on section 9.

M. Karagianis: I do have a number of concerns with section 13 — in particular, the fact that this section prescribes so narrowly the representative's ability to begin an investigation. It says here that the new representative must wait until the earlier of one year after the critical injury or death has occurred or the completion of a coroner's or other public investigation. Well, certainly, the history of the coroner's office in recent years is publicly known.

The workload that was handed to the coroner without adequate services ended up in a backlog of hundreds and hundreds of reviews. Should such a travesty occur again, it would be unfortunate that the children's representative be constrained by that kind of process. In the case of other investigations, they often can take many years. As we often see, issues come to light here and investigations finally are undertaken two, three, four and five years after a critical injury or death has occurred. It would seem to me that by constraining the representative by saying that the representative cannot begin an investigation until at least one year has passed…. Certainly, we would not anticipate that any of the other processes that trigger this — the coroner's review or police investigations — would occur in a shorter time period than that.

I would hope that the children's representative may have the ability to begin an investigation much sooner and that the incident of a critical injury or death or tragedy would be able to immediately trigger the representative to begin taking some action as soon as possible. I would ask the Attorney General why, in fact, government has prescribed that the representative has to wait one year before initiating actions from her office.

Hon. W. Oppal: There are several parts to that question. I'll answer the first part by saying it's a fundamental aspect of our law that no investigations of this sort begin until after criminal proceedings have been concluded or a coroner's inquest or matters of that sort, where the jeopardy to a person is greater. That's the reason we do that: in order to protect persons who may be subsequently charged, who may be prejudiced in obtaining a fair trial under the criminal justice system.

The second part of the question relates to the concern about having to wait one year. The section doesn't say you have to wait one year. They can commence any time as long as there are no criminal proceedings or matters of that nature.

M. Karagianis: Did the Attorney General want to clarify anything in his last statement?

Perhaps he can conclude his other remarks there in answer to this question. It very clearly states here that the representative is not authorized to investigate the critical injury or death of a child until the earlier of one year after the critical injury or death and the following…. Again, alluding to the both the Coroner's Act and other forms of investigations.

In the case of a circumstance…. I can think of several that are currently under investigation by the ministry. A child's death that occurred, in fact, in the summer of 2006 is currently under investigation. Given the nature of the relationship of that child to the ministry, there would be all kinds of compelling reasons for the children's representative to take an interest and begin to follow the trail of that investigation much sooner than one year.

I would ask if the Attorney General does not see that there are, in fact, some constraints put on the representative around deaths that have occurred that do have direct ties to the ministry and that do immediately attract the representative's interest and concern.

Hon. W. Oppal: The delay that's contemplated under the statute is to give an opportunity to do an internal review, but I would direct the member's attention to the words of subsection (c), which state "until the earlier of…." Then sub (ii) under that says: "one year after the critical injury or death of the child."

There isn't a mandatory one-year waiting period. That only applies if there are all those other things that are taking place. But if there aren't, then it's "the earlier of."

N. Simons: The issue here is the potential delay and the risk that places children in. Will the director be able to conduct an investigation into the safety of the children prior to the completion of the police investigation?

I'll tell the Attorney General right now that the failure in the case that precipitated this entire process resulted from the fact that the ministry was withheld information by the police, at the insistence of the coroner. Hon. Attorney General — through you, Madam Chair — we know that children were left in that home under potential risk.

I believe that this is a clear indication that this issue hasn't been properly recognized in the drafting of this legislation. In fact, the procedures we are expected to wait for, for one year could, and have in the past, put children at risk. They have put children at risk repeatedly. They put children at risk while we wait for police reports, while we wait for coroner's reports, while we wait for various other forms of reports. Meanwhile, children remain at risk.

This one year, this discretionary one-year wait period, could be addressed by simply making sure that as soon as a critical injury or death occurs, the representative has immediate knowledge of that and has some supervision of the file, in order to ensure that children are protected.

Hon. W. Oppal: The director's process is engaged at any time under section 14 of the act. The director has the authority to report that to the representative.

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

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

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

G. Coons: I just had one last comment about ports, and we'll get into ferries if you don't mind. I know the minister was at the Change Brings Opportunities Conference in Prince Rupert. I was unable to attend, but I went through all of the presentations. There's an interesting one by David Fung, chair and CEO of ACDEG Group, entitled — and quite fittingly as we start looking at the heartlands and going from the heartlands to the "hurtlands" — A New Confidence and Outlook of the North and the Neglected.

Again, I just want to highlight that as we look at the smaller and shallower ports that I mentioned yesterday and look at developing a distribution hub and trying to get the multimodal infrastructure into play.

Mr. Fung saw some of the missing elements in our B.C. port strategy. I'll say "ours" because provincially it's ours. There is no ambitious regional economic development plan; no regional stakeholder council with the involvement of Vancouver, Prince Rupert, the government, first nations, shippers and carriers; no business plan to develop short sea shipping or inland container loading.

I'm just wondering: is there a regional economic development plan? And does the minister have any of his staff dedicated to a northern gateway strategy dealing specifically with Prince Rupert and the northwest corridor?

Hon. K. Falcon: I know Mr. Fung well, actually. He's a very well-regarded businessman. He has actually provided some exceptional insight into the opportunities of the Asia-Pacific. I would be careful, for the member opposite, to not mischaracterize his comments. If you asked Mr. Fung in any way, shape or form what he thinks about the performance of the B.C. Liberal government vis-à-vis the performance of the NDP government previous, I think the member might be shocked into stunning silence. It will not be a flattering recommendation for the NDP government.

Having said that, I can say that we actually have been working with those communities — the communities of Prince Rupert, Smithers and Terrace — and looking at the opportunities of a northwest corridor. I think it's important to point out to the member…. You started it, Member. You know me; I absolutely have to respond when I hear something that wasn't quite aligned with the facts as most of the public would know them. The member alluded to that there's been some lack of action.

I think it's important to point out that the real "hurtland" for the folks in the north occurred during the '90s when unemployment rates went to double digits. We lost tens of thousands of people through the 1990s, who left B.C. because they lost all hope.

What we're seeing now since 2001 is actually the only time you can point to all the activity happening — expansions at the Prince George Airport, major investment in the Port of Prince Rupert, new hope for those communities. Is it perfect? Not yet, but it's nice to see unemployment rates go from the double digits down into the single digits in areas that have not seen that for an extraordinarily long period of time. I say that not to brag and not because I think it can't get better, because it actually can get better. But we are certainly a lot better off than we were in the very dark days of the 1990s.

I think Mr. Fung's comments are entirely appropriate. We do need to work with the regions, as we are. We have engaged in discussions with those communities, and we're continuing to work together to figure out how we can best capitalize on the opportunity that the Port of Prince Rupert offers.

G. Coons: Just one last comment that I'd like to say. When we look at the '90s and look at the commodity prices and the bandwagon that you happened to inherit as far as having billions of dollars of surplus — in my mind ripped from the backs of the most disadvantaged and vulnerable in the province, I would say…. When you start looking at the heartlands, as your books and pamphlets cited two or three years ago….

Right now Prince Rupert and the north coast region have more than double the unemployment rate. In the north, as the minister knows, it is still the "hurtland" up there. It's vital, as the mayor and council have indicated to many of the ministries down here, that we need the port infrastructure quickly, and we need a strategic plan for phase 2.

My last question is: is there a strategic plan and funding coming into Prince Rupert for phase 2 of the port?

Hon. K. Falcon: I mentioned this yesterday, but we are working with the Port of Prince Rupert to put together a plan for phase 2. I indicated that it is our expectation that if phase 2 is to go forward, it will be with private sector funding. It will not be driven by government.

I just want to reiterate that this member has to decide whether this is a good thing or not. But it was this government and this Premier that identified Prince Rupert as the opportunity. The NDP government had ten years to do something about Prince Rupert and didn't see fit to do anything, except former Premier Clark scared away all American investors and, frankly, made an embarrassment out of the province of British Columbia and our international relationships — and our federal-provincial relationships too, for that matter.

I'm just a results person, Member, and we're getting results. You can talk about "hurtlands" and whatever that nonsense was about the backs of the disadvantaged and stuff, but the fact of the matter is that every shred of credible evidence points to the fact that British Columbia is now one of the strongest economies in the country. It's not the weakest, as it was under the NDP.

We have a triple-A credit rating, not five credit downgrades as we had under the NDP. There is hope and optimism again in British Columbia — not the complete, frankly, disdain and disillusionment that typified the 1990s.

I am happy to continue having that debate with the member opposite because all of the facts are so incontrovertible in that regard. I'm happy to just keep having a back-and-forth on that.

I just want to look at the amounts in the core business estimates that were given. I can see that in '06-07 there was approximately $130 million given to B.C. Ferry Services, and this year it's $144 million — an 11-percent increase approximately. Back in '04-05 the amount was close to $127 million, and again it's a 14-percent increase.

The minister was talking about one of the objectives of the transformation of B.C. Ferries was to have less cost to the taxpayer and a better quality of service. But when we look at those increases, I also see in the performance 2 submission from B.C. Ferries to the commissioner that back in the years prior to 2006-2007 — actually, in 2006 and 2007 — the taxpayer subsidy was $91.8 million, and that was contractual. B.C. Ferries says it's going up to $105.2 million; then in 2008-2009, $123.4 million. In 2009-2010 it's going up to $146.5 million; in 2010-2011, $146 million.

Finally, in 2011-2012 in B.C.'s performance 2 submission to the commissioner, they're saying that they are anticipating getting $152.9 million, which from the current contract is a 67-percent increase — from the current contract to what B.C. Ferries is expecting.

I'm just wondering if the minister agrees with those numbers that over the next three or four years there's going to be a 60-percent, 60-percent and then eventually a 67-percent increase in the taxpayer subsidy to B.C. Ferries.

Hon. K. Falcon: First of all, it's important to point out that those are the estimates of the Ferry Corp., which may differ somewhat from ours. Actually, the member is talking about increases, and he's quite correct to point that out. A little surprising in some ways coming from this particular member, because a lot of those increases, of course, are driven by the fact that this government made the decision to increase the northern routes subsidy to allow them to go forward with the acquisition of new vessels and to replace the Queen of the North and to accelerate that entire replacement schedule by two full years, which is a tremendous boon for the north coast.

Yes, that involved an increase in dollars. There's no question about it. But I'm very proud of the fact that we moved extraordinarily quickly to deal with that. In fact, while that member was running around talking about ferries being unsafe, we were actually getting on and working with Ferries to try and replace these vessels. That was met with a very strong chorus of approval from the north coast, certainly from all the folks I talked to.

The other thing I would point out to the member on why there's an increase…. There are two things. One is because fuel costs go up. When fuel costs go up, we actually have to increase our subsidy to cover off seniors, students and those that have medical challenges who ride the ferries.

We protect them from the fuel cost surcharges by paying and covering those off for those disadvantaged or particular groups of folks to make sure they are well looked after. What we've seen is not only that cost going up from fuel costs but also the volume of that traffic — of seniors in particular — has been growing. Of course, we have had a longstanding commitment to subsidize the cost of seniors travel on our B.C. ferries. As a result of that, that cost has gone up.

While I would love in a perfect world to see those costs go down, we also are aware that we are seeing a demographic shift. There are more seniors each and every year, and that means more seniors have the ability to ride the ferries. That means there's going to be more of a requirement for subsidy, and that's where those increases are primarily made up.

G. Coons: As he refers to me running around concerned about the safety of the vessels and me being called a fearmonger by the minister…. Again, at that point he backtracked and said, "I wasn't talking about the vessels; I'm talking about the future vessels that got Transport Canada dispensations to sail for another five or six years" — so 2011 and 2012, when they should have been retired in 2003, 2004 and 2005.

My concern was that the northern strategy was sitting on your desk for over a year. The day the ferry sank, lo and behold, you release the money. I don't want to get into past politics on that, but as the minister said…. The Morfitt report was quite telling about safety aspects, and we'll get into that a bit later.

I'm glad the minister mentioned something about that these are estimates coming up in the future. But even in the past when we look at some discrepancies,

back in '04-05 the government estimated that they would be giving B.C. Ferries about $127 million, and B.C. Ferries said they got $131 million. In '05-06 the government says that they gave B.C. Ferries $127.2 million, and they got $133 million. There are discrepancies there.

In my mind, that's why the Auditor General indicated that we need a comprehensive summary brought to the Legislature through the service plan. I'd just like to mention that to the minister, and he may want to respond.

My question right now is…. In the Auditor General's report A Review of the Transformation of B.C. Ferries, obviously we know he indicated…. The minister knows that it is an essential service. It's a lifeline necessary for the protection of the health, safety and welfare of residents.

One thing that was brought to people's attention with the Auditor General is that one of his goals was to look at the transformation and see if it's been successful in achieving its objectives. I'm just wondering if the minister can tell me where I could go on the ministry website to find the objectives of the transformation.

Hon. K. Falcon: The member can find that information, the objectives, laid out in the act itself. Also, if the member goes to the original press releases when the Coastal Ferry Act was introduced and to Hansard discussions, those were canvassed quite heavily.

I appreciate the member also pointing out what the Auditor General's report primarily said. That is that the structure of B.C. Ferries is achieving its objective as an independent, regulated and self-financing company — and here's the most important point — free from the political interference of the past. I emphasize those words, because that was the primary problem with B.C. Ferries in the past.

It suffered from repeated and persistent political interference by the previous government, which created a horrific situation that not only resulted in the building of three ferries that were ultimately never used, but created an environment in which they were unable to undertake the most fundamental basic vessel replacements, such that you have an average vessel life that's well in excess of…. Well, the average age is somewhere in the 40-year range, and that has done a tremendous disservice to the people.

Fortunately, under the new structure you've got a $2½ billion capital program underway to replace 22 vessels over the next 15 years. That is certainly something that the public is very excited about. At least seven of those new vessels will actually be operating by 2009, which certainly is a step in the right direction.

G. Coons: Again we start looking at different philosophies and the transformation. I remember in last estimates, the minister quoted the key recommendation from the Wright report and omitted on purpose that B.C. Ferries should report through the ministry to the Legislature. I think that's a key aspect that was left out of the Wright report and probably where we're getting right now.

The Auditor General said that to do their job, they had to first identify the government's objectives, and they could not find them in a single document. They had to go, as the minister said, to Hansard and to the act and to press releases and to the steering committee that designed and implemented the transformation. Nowhere out there can anybody find the five objectives hidden in secrecy for the privatization of our ferry system.

They transferred over our vital, essential marine highway to be flipped over in a profit-over-service scheme — no business plan, no written objectives, no observable objectives, no criteria for how the objectives are being met. I hope the minister writes down the five objectives from the Auditor General's report so he has them all in one spot. His staff can say — instead of me or the public going to documents willy-nilly — that they are put out there for the public to see.

Also, the Auditor General recommended that the government establish criteria for evaluating how the coastal ferry system is achieving the objectives — now that he has found them — of the transformation and conduct evaluations of that performance at least once every performance term in order to determine when or if changes to the Coastal Ferry Act should be made.

My question to the minister is from the Auditor General's report. Has he established criteria on how well the objectives are being achieved now that the Auditor General has finally put them together in one document?

Hon. K. Falcon: I'm a little puzzled. I can't imagine that something is a secret if it's found in an act. Apparently that's secretive under the member's grassy-knoll school of government where everything, of course, is a conspiracy and a secret.

I think the important thing for the member…. Again, as I say in so many other things, we're results-driven. I'm quite happy to have a debate with this member about the performance of the Ferry Corp. post-2001 and pre-2001. The member might need to be reminded that under his NDP government, you managed the rather amazing feat of running the debt up in 1991 for B.C. Ferries from $60 million to $1.1 billion. That is a 1,800-percent increase, so you essentially bankrupted the organization.

Taxpayers had to write off a billion dollars' worth of that debt as a result of the absolutely nonsensical, ignorant, silly, stupid decisions that were driven by the government of the day. I use that kind of language because it's almost unprecedented in the history of this province for such a series of staggeringly poor decisions to be made with regard to a corporation. And unfortunately, the people that really pay that price are the public.

When we were elected, we made it very clear that we were going to follow the recommendations of the Hugh Gordon report, the Fred Wright report and the Auditor General Morfitt report. The member talks about me selectively quoting from the Wright report. Well, we took the best of the recommendations from those three reports, and the underpinning of all three

of them was essentially that you have to free the corporation from legislative interference, from interference from politicians.

That may be difficult for that member opposite, but I can tell you that it's not difficult for me, because I fundamentally believe that that should be the case. We won't be changing direction on that, because the results we're seeing today, I believe, are outstanding, compared to what we saw in the past.

In terms of the performance measures, the member will know that we already have performance measurements reporting in the areas of on-time performance, customer satisfaction and traffic congestion. All of those issues are reported out.

We are negotiating additional measures as a result of recommendations from the Auditor General. We're negotiating these with B.C. Ferries with respect to safety, operational reliability and value for money. We're currently in the midst of developing those, and once they are developed, we will put them into place.

G. Coons: We look at the governance structure of B.C. Ferries right now. Again, going to the act, the Auditor General couldn't find it in the act. He had to go, as you said, to Hansard and to press releases. I'd love to be on the same pedestal as the Auditor General for not being able to find the five objectives for the transformation. If you're calling the Auditor General to account for not being able to find it in the act and having to go to the other ones, I find that a bit questionable, also, from the minister.

I would like to comment on what he talked about — the immediate purpose. The Auditor General concluded that the changes made have achieved the immediate purpose: the separation of government policies. However, he says that the short-term vision contradicts the binding of the government to a long-term, 60- to 80-year commitment.

He says that there are risks about ownership and who is responsible for what decisions and that it must be clear, as far as the governance model, who is responsible for what if it's to run as smoothly and as economically as possible.

I'm saying to the minister: how does the minister ensure that the board of directors is doing its due diligence with the $148 million a year that the taxpayers are putting into B.C. Ferries?

Hon. K. Falcon: The way we do that, Member, is that we first of all make sure that the board makeup is of individuals who actually have the skill set and the background in finance, legal, accounting and in dealing with major corporate entities so that they can make these decisions and, in fact, have a fiduciary obligation to make those decisions in the best interest of the corporation. I can see that that's exactly what's happened.

Member, I think it's important, again…. I know you read through the Auditor General's report. The fact of the matter is that the Auditor General says that it's achieving its objectives. He's very clear about that. Auditor Generals are forever trying to find ways to make positive suggestions and contributions. When they do, we try very hard to implement those, because at the end of the day, we do want to see the best possible results.

We're not in any way discouraged by any positive recommendations that have been made. I think the Auditor General reasonably points out things that we need to be aware of. But I do not for a second take away from the fact that he says it's achieving its objectives. I know that's disheartening to the member opposite, but it's important.

As far as the board, the advantage of having a professional board is that decisions get made in the best interests of the 20 million passengers a year that use the ferry system, not in the best interests of that member opposite or even of this Minister of Transportation.

The best recent example of that was the decision to procure new ferries in Germany. The members opposite fought viciously against that, were appalled by that decision and said that this was a travesty, that we must politically interfere and insisted that they be built in the local shipyards, regardless of all of the evidence over the past decades and beyond that demonstrated there would be enormous risk to the taxpayer by doing that.

We refused to interfere. We said: "No, we're not going to interfere." This structure was set up to be able to make these decisions in the best interest of those 20 million passengers — not the best interest of shipyard unions and not the best interest of the politician.

I'll be very candid with the member and tell him that I heard lots of feedback on that issue, not just from the NDP. I even had members and MLAs from my own party who represented shipyards that were nervous about the situation but who agreed ultimately that the decision we made was the right one, though the politics were tough.

Yet look at the contrast between the importance of having a professional board made up of people with a skill set and being able to make those decisions without political interference, because they made that decision. Today we now know that those three super-C-class-like ferries, being built in Germany, are being delivered ahead of schedule and under budget.

In fact, I'll go further. Had we interfered and said, "No, no, you must build them locally, and we must not apply the standards that the professional boards said need to be applied…." These were, I'll remind the member, that they must be built on a fixed-price basis; that they wouldn't receive payments until they were delivered and had gone through sea trials, if you can imagine that; and that they had to meet all of the standards that were set out by the board corporation, as a professional board would demand.

That's actually the way it works in the real private sector world, Member. That's what they did, and that's what they are getting. They are getting ferries that are going to be more fuel-efficient. They're greener. They're better. They're going to be delivered under budget and will be delivered ahead of schedule.

It is interesting to me, because I watched this very carefully. Three months after the B.C. Ferry board signed those contracts, the price of steel started to climb. It climbed dramatically to almost double what it was back then, when that contract was signed. Copper prices went up 400 percent.

It is conservatively estimated that it would have cost 50 percent more to the taxpayers had we interfered, as that member and that NDP opposition wanted us to do. Had we interfered, 50-percent additional cost, almost a quarter of a billion dollars, would have been heaped upon the taxpayers of this province. That's why you have a professional board.

Now, I contrast that with the board that the previous government had in place back when they were in power. They had one of their big labour supporters that was chair of that board. In the midst of the fast ferries he had a rather amazing comment. He said: "What the hell do I know about building boats?" Well, that's a pretty telling comment.

That's exactly why we don't want a board stacked with people that actually haven't got a clue about what they are doing. We want boards put in place that have professionals who understand the complexities of a big organization and that make their decisions in the best interest of the passengers that use the vessels in that organization.

Today what we see at B.C. Ferries is that the terminal upgrades have been phenomenal. We get tremendous positive feedback on the retailing opportunities. I remember that when I used to go to the Tsawwassen ferry terminal, it was ridiculous. You have all this captive market sitting there in cars with nothing to do, and they barely had any services of any decency for people.

Today the shops are chock-a-block full of people who are happy to take part in the retail opportunities that this board and this ferry corporation have put into place. Because of the private sector mindset that has now been incorporated into that corporation, we see them making decisions on capital decisions that are being made in the best interests of the public again.

We saw that again in the aftermath of the sinking of the Queen of the North, where they scoured the entire world; found a vessel, the MV Sonia; and made some significant changes to that vessel over in Europe, where they found they could get the best work done at the best price.

Then they brought it back to British Columbia. They had the finish-up work, refit work — some additional works they needed prior to it being able to sail in that member's North Coast area on the northern routes — of $8 million being done here in a local Victoria shipyard. Again, all of those decisions, none of them being driven by this minister interfering and telling them how to run their operation. Nor would I ever countenance or think about that.

It's a lengthy answer. I say this because I'm trying to underscore to the member opposite that when the member opposite wants to go down that road of trying to tell me how this organization…. In order to improve it, we need to bring it back to a place where politicians have an ability to interfere. That member better know that that is an argument that is absolutely not going to get anywhere with this Minister of Transportation.

I can tell you that I will not be interfering with an organization that I think is doing an exceptional job, delivering a very, very good service to the people that actually use it. It's not necessarily in the best interest of this government, of that member of the opposition, of union shipyard workers or what have you, but it's certainly in the best interests of the people that utilize it.

G. Coons: I'm getting some more information here. It's the board of directors that looks after the public interest. I thought I heard that. I guess he's got away from the commissioner looking after the public interest, because the commissioner, as he knows, has indicated that he does not look after the public interest. He looks at the financial sustainability of the corporation.

Now he's saying that this new board of directors does, which was appointed by the government. There are two boards. There's the B.C. Ferry Authority board and the board of B.C. Ferries, and they're made up of the same people. On the one board, the authority board, their purpose is to administer and sell a voting share in B.C. Ferry Corp. after it's been converted into a company.

The Auditor General says, though, that the negative side of this increased independence is that the Ferry Authority is not answerable to anybody. With no owners, no shareholders, no financial stake in the company, there's no person or agency that controls B.C. Ferries or its board of directors. The Auditor General says that this new governance structure is a hybrid that has yet to prove itself.

I've got a couple of questions here. Is the minister contradicting the Auditor General and saying that yes, this governance has proven itself, whereas the Auditor General says it has yet to prove itself? He says that none of the mechanisms established hold the board of directors responsible for its performance.

I'm just wondering: does he agree with the Auditor General that it has yet to prove itself and that it's going to be many years, perhaps, in the future? And who does the board of directors — both boards — report to?

Hon. K. Falcon: The member needs to understand the structure. The public interest is served by a ferries commissioner who ensures financial sustainability. That may be something that'll be new to the members opposite, but actual financial sustainability of the ferry service is kind of important. It encourages the Ferry Corp. to minimize costs — without compromising safety, of course. That's all on the commission's website.

What we do, and what is appropriate for us, is determine what the levels of service are that we want as a province to be delivered and what the service fee is that we're going to pay to have those levels of service. It's up to the board — and it's their fiduciary obligation — to make sure that the Ferry Corp. is driving to meet those levels of service that are established.

The independent commissioner will be there to ensure that the public interest is protected through

control over fare increases and making sure that the price caps are being adhered to. If there are extraordinary applications for things like fuel surcharges, it's to make sure that the ferries commissioner looks at that and determines that the public interest is being well served. I'm sure we'll have an opportunity to go into that.

This member is very delusional about the tremendous transparency that apparently occurred in the 1990s, when we had the magic of legislative oversight. Oh, what a joyous time it was. As I think back to it, I'm thinking: well, how was it that they were able to stagger and lurch forward with this crazy fast ferries program while the public didn't have a clue this was going on? With all of the beauty of this nirvana that this member apparently yearns for, somehow the most massive financial bungling that ever took place in the history of the Ferry Corp. took place under the nose of all the legislators.

That may be a nirvana that the member wants to go back to, but we certainly won't be. What we have now are public annual general meetings. Now, imagine that — a public annual general meeting where the public can go and question the CEO, question the senior executives directly, ask intelligent or even not-so-intelligent questions, if they wish, of the executive of the actual corporation. That strikes me as being a pretty positive thing.

We've got independently audited financial statements publicly released on their website every single year. We've got oversight from the Ontario Securities Commission. If the member wants to know what true financial oversight is, look at the Ontario Securities Commission and the oversight that they provide, where there are criminal penalties and very significant civil penalties if there is disclosure that is not totally transparent. I can tell you that the Ferry Corp. worries a lot more about Securities Commission oversight than they do about the oversight of legislators.

The reason we are going to stick with that is because it is my considered opinion…. I should say that I don't pretend that this is the best model ever discovered, but I will say this: it's a lot better than the model we had before. Unless someone comes to me and tells me about a new model which will improve what we have without taking away the very real benefits that are put in place by eliminating politicians' ability to interfere, then I'm going to stick with the model we have.

G. Coons: I guess that in comparison, when you talk about financial bungling happening under our noses, we can look at the convention centre chaos that's happening right now. As we move along, we'll see how that goes as it exponentially increases in cost.

I thought I'd bring up the aspect of public interest. The minister has repeatedly stated on record that there is an independent ferries commissioner that acts in the interest of the public. He looks at information and makes a judgment that is in the public interest — not the provincial government's, not the Ferry Corp.'s, but the public interest. I'm sure he still sticks to that right now, as he mentioned.

The commissioner, on his website, says: "We are not charged with the responsibility of assessing the impact — for example, economic or social — of changes in the fare caps upon customers or coastal communities. Nor is it within our mandate to weigh the impact on communities against the financial viability of B.C. Ferries."

I reviewed the discussions, and a question by a member opposite back on section 41 said that there has to be a principle of fairness as it relates to the public interest. The minister at the time, Judith Reid, said:

Now, the minister can't have it two ways. We've got the commissioner saying he's not looking after the public interest and it's not the Ferry Corp. that's looking after the public interest. Just who is looking after the public interest?

Hon. K. Falcon: The government sets the service levels, and the government sets the service fee. It's that simple. We are not going to have the ferries commissioner act as some sort of social arbiter of what is in fact an impact and what isn't and try to wade through that morass of people trying to ascribe social impacts.

Our job is to deliver a service and deliver it as cost-effectively as possible and with the greatest possible benefits to the users. It is not to have an independent ferries commissioner try to get into social impacts and all these other adjectives that the member threw out there. The ferries commissioner is there to ensure that the operations are being done in a manner that serves the public interest and is delivered within the price caps that are established. Where there's an extraordinary price cap application, he's to do the review and make sure that he is making decisions that are within the interests of the users.

That's not going to change. I imagine that if we as a government decided that the social impacts were such that we wanted to do something with the service fee, we could do that. But I'm not compelled by that at all. We actually subsidize to the tune of well over $100 million a year — I believe it's about $113 million a year — the small, remote coastal and northern routes. That is a tremendous annual ongoing subsidy.

The member will talk about these apparently horrible impacts that are being visited upon these communities, and they always quote, "Oh, you know, fees have gone up 38 percent," and these kinds of things. In dollar terms we're talking about $2.

I'm not going to try and say that $2 isn't a lot of money. It may vary. It may be less, depending on if you're a passenger. It might be 80 cents. It could be $2. It could be $3. But these are not backbreaking numbers. I get that we have to be respectful that people would

rather not spend an extra $2 or $3 to take a ferry. But I think we also have to recognize that those routes are already heavily subsidized.

The final thing I will say, back to the member's first point, because he talked about the convention centre…. The thing about the convention centre that's very different is that we're very upfront about the fact. Indeed, we're not even happy about the fact that the convention centre is proceeding in a manner that is costing additional dollars. But I will say this. This convention centre, when it's completed — it will be completed — will be in use.

There will be hundreds of millions of dollars' worth of conventions that are going to be coming to the lower mainland and spending a lot of money as a result of the fact that this convention centre is in place, which is quite a dramatic contrast from looking right across from where the convention centre is and seeing those three ferries still sitting there unused. Can't find a home for them. Even the private sector can't figure out what to do with those silly things, so that to me is a very stark contrast.

No one likes to see a construction project in an environment where you've got huge labour shortages, construction material costs dramatically increasing, etc., but it happened in that case. I think that when that happens, we say to the public: "This took place. We're not happy about it." In fact, we're apologetic about it. We're going to make sure it gets done and gets built to the benefit of the public. We'll do that in the most cost-effective way we possibly can to make sure they get a product at the end of the day that is serving the needs of the lower mainland.

We're not happy at all that it's more expensive than it originally was proposed. There were add-ons that were made. There were decisions that were made by the city of Vancouver that obviously added on costs. We don't pretend to explain that away. That's a reality. We'll deal with it, and we'll get that thing done. It will benefit future generations for a long time to come, just as the Vancouver Convention Centre has done.

G. Coons: I'm pleased that this government is looking after the needs of the lower mainland, because that's what we're seeing in the heartlands, in the "hurtlands," and you're hearing it.

When we've got coastal communities that this government and previous governments saw as a vital link for all of their necessary services and this government is negligent in their duty to continue that…. Yes, we have a real problem with that, especially when we look at what the government has given B.C. Ferries as far as the return on investment.

The Coastal Ferry Act, in section 41(2), obliges the commissioner to establish an appropriate return on equity. The commissioner set the equity at 14 percent, and I think the return on equity for the first performance term was around 9 percent. So the commissioner looking after the financial sustainability of the Ferry Corp. has raised its return on investment by 56 percent, thus creating higher fares and, in the minds of most communities, less service.

There is something about "grossing up." There is an apt term, I think, as far as where…. Commissioner Crilly says it on page 3 in his declaration on the return on investment. They allow it to increase to 14 percent by grossing up. Could the minister please explain what grossing up means?

Hon. K. Falcon: The member covered a fair bit of territory there, so I'm going to have to ask him to re-ask the question because I'm not sure I entirely grasped it. The member did make a comment and wails on incessantly about this "hurtlands" fixation that he has.

For the life of me, I've never quite understood how more investment, a lower unemployment rate and more optimism equals hurt, but I guess I will just forever never understand this member. He's the only person that apparently travels throughout the north and doesn't see any improvements in the economy. It must be a dispiriting situation indeed to see nothing but black clouds and rain wherever you go, when everyone else sees sunshine and optimism.

The member talks about how somehow lower mainland…. There is some kind of shortchanging going on. Does this member not know what's happening in his own northern route? I mean, are you not aware of what commitment this government made to the northern routes? Can you not read the financial statements there that show we're adding over the next three years 62 million more dollars so that you can get two new vessels on the northern routes two years ahead of schedule?

Even in your wildest negativism, which is something to behold, the member can't see that there are benefits for the North Coast with the addition of those new vessels and with the commitment that this government has made in the additional dollars we're providing.

I can only imagine the hue and cry that would come from this member had we not done that, had we said, "Well, let's just keep going with the Queen of Prince Rupert," as happened in the '90s. You know, a 46-year-old vessel that…. The NDP government was quite prepared to just keep using this old failing equipment, keep running them on routes and providing, frankly, a very poor level of service to the public.

Well, that's not what we're doing, and that's not what we're doing for the North Coast. It would be nice if at least once this member just acknowledged that maybe there are actually some improvements for his community, because when I go up there, I sure hear that, Member.

They actually say that to me. The ferry advisory committee actually tells me how much they appreciate the fact that they're going to get those new vessels and what that's going to mean for tourism, how much they appreciate the new cruise ship terminal that this government put in place to create opportunities in Prince Rupert and the North Coast.

Instead of running around and talking about how the sky is falling and everything is black and dark, it would be nice if the member acknowledged that there are actually some good things happening.

Since you won't be a booster of Prince Rupert, I will — you know, $100 million to develop a port, led by this Premier. I'm sorry to say that it wasn't Premier Clark. It wasn't Premier Dosanjh or Premier Miller. It wasn't any of the NDP Premiers. It was this Premier that actually went to the private sector, went to the federal government and got the $100 million that is kick-starting a new economic opportunity for the Port of Prince Rupert. It was this government that actually made sure that there was going to be a new cruise ship terminal in the Port of Prince Rupert.

We didn't chase away Alaskan vessels like NDP Premier Clark did and create an international ruckus that achieved absolutely nothing for British Columbia except a black mark on our tourism industry, hitting particularly hard in that area. No, that wasn't this government. That was an NDP government. Apparently, that is how you define success in the NDP world. You define success by failure. It's a bizarro world where every failure is actually somehow a success. So $62 million, Member, over the next three years for the northern routes.

The Chair: If I may just gently remind the members. Please make your remarks through the Chair.

G. Coons: Thank you, and maybe you could advise that he give some answers also. We aren't getting too many answers over here.

When we look at the minister, obviously he hasn't travelled through the riding. He's travelled through his strongholds of Liberal insiders. He isn't going to the Queen Charlotte Islands and going to Sandspit and Old Massett. He isn't going to the Nass Valley. He's not going to the places where he should be going in Prince Rupert, talking to people and looking at the stores that have shut down.

Yes, we are optimistic. We are optimistic about what's going to be happening in the next year and a half or two years, but right now, as the minister knows, it's not happening, and there are still many concerns. Unemployment, the disadvantaged, homelessness are all still a big mark on this Liberal government's back.

My question was…. I'll make it simple. This government has guaranteed the corporation a return on investment. Last year it was about 9 percent. This year it's 14 percent, a 50-percent increase on the return on investment, even though the commissioner got a review done by Pricewaterhouse and there was a big discrepancy between the two. Pricewaterhouse said: "This is an amount that would be fair." The commissioner has given them 14 percent.

Does the minister know the amount that Price-waterhouse suggested for a return on investment for B.C. Ferries Corp.?

Hon. K. Falcon: I apologize, Chair. I will make sure I direct my remarks through the Chair.

It's actually the commissioner that establishes the return on equity, Member. I imagine that the commissioner would get whatever independent advice the commissioner feels he needs. Maybe that would include Pricewaterhouse. I have no idea, but it's the commissioner who establishes that return.

G. Coons: So I guess the answer is no. The minister doesn't know, because for every 0.5 increase in return on investment, it's a significant cost to ferry users in the fare caps, and it is confidential.

What the Auditor General said is that any information that the commissioner uses should be available to the public. I'm just wondering if the minister could find out the information about that for me — what the Pricewaterhouse amount was that they suggested was significantly different than what B.C. Ferries got.

Hon. K. Falcon: I think the member might want to again check the act, and he will note that the commissioner is independent from government. The commissioner establishes the return on equity, and the reason why the commissioner establishes a return on equity is to ensure the financial sustainability of the Ferry Corp.

You know, just listen to what this member is actually suggesting. What this member is suggesting is that there is a potential cost in terms of the price people may have to pay. Apparently, if you follow that logic, we must ratchet down the return on equity that the independent commissioner determines the Ferry Corp. needs to be sustainable so that there's not as much of an increase on the user.

The member is prepared to sacrifice the financial sustainability of the operation, which is exactly what they did during the 1990s. Apparently, this will benefit the user. Well, Member, I get that finance isn't the NDP strength, but this is truly getting into some amazing territory. The fact of the matter is that it is not to the benefit of the 20 million people a year that use the vessels if the corporation is not financially sustainable. It's actually not to their benefit.

The corporation borrows on their own in international world security markets. They borrow their own debt to build these vessels, and they've got to make sure they have an operation that is viable. Why on earth the member thinks that's a bad thing is beyond me.

As far as Pricewaterhouse, that's not commissioned by this government. That would be commissioned, presumably, by the independent commissioner, and I don't have access to the information that the independent commissioner has.

G. Coons: I guess that's one of the concerns that the Auditor General had — that information like that should be available to the public. That was in his report. The minister mentioned previously that a key to the commissioner's role is to maintain and ensure the corporate profits without compromising safety.

I'm just wondering who ensures that the safety and maintenance of the fleet is not being compromised. Who in your ministry is ensuring that B.C. Ferries is meeting the requirements re safety and safety reports?

Hon. K. Falcon: As the member well knows, the Ferry Corp. is federally regulated by Transport Canada and potentially also by the Transportation Safety Board. It's federally regulated, no differently than are the airlines or the railways. I do think it's important to note that the safety report, the review of operational safety, that the Ferry Corp. commissioned by former Auditor General Morfitt — an individual who is intimately familiar, by the way, with the Ferry Corp., having done an earlier report — states and concludes in his review summary: "We concluded from our review that overall the company is operating a safe coastal ferry transportation system. The company directors, management and staff are highly committed."

I want to intersperse my own comment here. They're not just committed; they're not slightly committed; they're not vaguely committed; they're not sort of a little bit aware.

They are highly committed to operational safety, both for the travelling public and for B.C. Ferries personnel. The reason why I read that into the record is that I have heard this member in question period and other places continually try to suggest — particularly in the aftermath of a very tragic sinking of the Queen of the North — that there is a widespread safety problem at B.C. Ferries. I have always felt it is the height of irresponsibility to state those kinds of things, particularly when we haven't got the evidence to justify that.

I'm always quite open to concluding that that could very well be the case, but I certainly won't conclude it based on facts. I know that in the wake of that sinking, members of the member's own community, I'm led to understand, sat him down and said: "What are you doing? You're going to hurt our tourism industry running around saying things like this." That's what they told me when I was visiting that member's community.

Regardless of the obviously widespread impact it could have on tourism, by running around suggesting that ferries aren't safe, what I am encouraged by is that the Morfitt report says that they are safe. He makes recommendations which, I might add, both the president of the union, who I've met with several times…. I have great regard for Jackie Miller. I believe she is genuinely dedicated to the safety of that operation, and David Hahn, who I've also met with over the same issue on numerous occasions. Both of them, the president of the company and the president of the union — which perhaps is a first in the history of that organization — unanimously endorsed the report.

I can't imagine how the member opposite is going to find concern with the fact that the management, the union and the Auditor General…. All of them are agreeing that this is a very safe operation.

There are recommendations being made, and the Ferry Corp. has agreed to commit to implementing all of those and publicly disclosing the progress that they make on those in their annual reports.

G. Coons: I find it interesting that in the Morfitt report it talks about one of the key aspects that he has a problem with, and that's the on-time performance — where from the CEO and president right down through all the operating management, they get bonuses for on-time performance. That's one of the quantity descriptions that this government has used in their criteria for evaluating whether or not B.C. Ferries is performing and meeting their objectives now that the Auditor General has got them.

I'm just wondering if there's a concern about the on-time performance, because Morfitt's safety review found a real concern with on-time performance, now that this provincial goal and key performance indicator conflicts with operational safety.

There are bonuses, as I said, for the president and CEO right down to senior master, master, terminal directors. On-time performance is in the contract of B.C. Ferries and measures the performance of senior operating staff. The Morfitt report indicates that there were instances cited of masters not going through the proper procedure due to pressure of on-time performance.

So does the minister know the amount of bonuses paid to the operating staff, and will he eliminate the bonus or work with B.C. Ferries — if it's not in his mandate — to be paid bonuses for on-time performance as it conflicts with operational safety?

Hon. K. Falcon: The member is making an assumption that there is a conflict, and that has not been established at all. In fact, what the Auditor General is saying is that he wants to ensure — and any good management system would want to ensure — that the performance measurements of which you're being held to account do not conflict with safety. And there's absolutely no reason why the two should conflict.

This member apparently doesn't think having on-time performance standards is a good thing. We actually do believe that is a good thing. We believe as a government that we need to measure performance in all our Crown corporations, including B.C. Ferries.

In fact, in my private sector days there was a common statement that used to be used. You cannot manage what you cannot measure. I would suggest to the member, with no disrespect intended, that the problem in the 1990s with the NDP government is that they didn't measure anything.

When they started measuring it — for example, their financial plans that they would put together with their budgets…. Every time they failed to meet the targets year after year after year, they finally stopped keeping budget plans, financial plans, because they weren't hitting any of their targets. That's not the way we operate.

On-time performance is a good thing. They need to measure that performance, and there's no question that the efforts that are made by B.C. Ferry Corp. staff to achieve those targets should never in any way undermine safety. But again, I think it's important to note what the Auditor General said about the management and staff — not just the management, the director's management and staff.

He said that the directors, management and staff are highly committed to operational safety, both for the travelling public and for B.C. Ferries personnel. That's important in light of what we're just talking about here, because meeting on-time performance measures does not automatically ipso facto mean that you don't care about safety.

In fact, he points out that they care highly about safety. They are highly committed. They're not just committed. They are not sort of committed when it means they might not meet their on-time performance. He says they're highly committed.

Now, having said that, I would agree — and the member and I would both probably agree — that in achievement of those targets, you never want to sacrifice operational safety. That is really what the Auditor General is getting at. I would agree with the Auditor General 100 percent. You should never sacrifice operational safety in the achievement of those objectives. Those are worthy objectives, but they should never undermine safety.

I don't believe they have been, but certainly that's one of the recommendations that the Ferry Corp. will take to heart and ensure that their staff know that at no time should they ever allow an on-time performance to undermine the fact that safety always has to be the number one most important thing for the corporation.

G. Coons: I find that a bit contradictory with how you measure the quality of service. The minister has said that the performance measures that they use are on-time performance, customer service and traffic congestion.

The Auditor General made it clear in his report that the minister is not monitoring the quality of service. He says the minister is monitoring the quantity of core service. The contract requires performance measures related to quality of service, and this has not been done.

The AG says that the Ministry of Transportation and B.C. Ferries must develop performance measures relating to quality of service, as required by the coastal ferry services contract. So here's a contract. The Auditor General that you put your faith in says that you are not following the contract.

I think back to years ago. Not only did you guys rip up contracts…. They don't follow the ones that you've signed. When is the minister going to develop criteria that measure the quality of service? And will he involve ferry advisory committees in that and start the discussion when he meets with the chairs next week?

Hon. K. Falcon: I heard that gratuitous comment about ripping up contracts. I would remind the member that the only contracts we changed were the absolutely irresponsible contracts signed by the previous NDP government, with hidden codicils that had huge costs for taxpayers. I make no apology for the fact that we changed those. That was absolutely the right thing to do, given the incredible irresponsibility in which the previous government entered into contracts that didn't serve anyone's interest — certainly not the taxpayers. It only served the interests of their public sector union friends.

Getting back to the question of the member. He talks about qualitative. Well, the recommendations that were made regarding additional performance measures are already under discussion — I mentioned that — between the ministry and the B.C. Ferry Corp. Those measures relate to safety, operational reliability and value for money. We're already engaged in negotiations with the B.C. Ferry Corp. on developing those and making sure those are reported out publicly.

I would also remind the member that the Ferry Corp. does something that, again, would be new to the member opposite. They actually do independent customer satisfaction surveys, where literally thousands of customers that actually use the ferries get to have input into what their experience of the ferry system is.

I would remind the member that last year, that satisfaction report rating was 86 percent. Now, 86 percent is actually a pretty good result in terms of trying to figure out what the qualitative experience is for the people that actually use the service. Independently collected — I believe it's Ipsos-Reid that actually does the work for the Ferry Corp., and that's as it should be.

Again, talking to the people that utilize the service, finding out what they think about it…. They actually feel quite good about it, Member. Apparently, you only talk to people who have problems with the service. But I can tell you, as someone who speaks to British Columbians every day — lots of them, because a lot of them recognize me and want to come up and tell me about their experiences and different things — what I hear about the Ferry Corp. is actually very, very positive.

Here is what I also hear from the Ferry Corp. staff, which I think is interesting. The staff feels good about this structure, and that is a real departure.

We are seeing, I believe, with the recent labour contract that's been agreed to between the union and the management — and helped put together by Vince Ready — just a revolution in the experience in the labour relationship between the staff at B.C. Ferries and the corporation. I think we're moving into a new era of cooperation and working towards mutual purpose and benefit.

That's something I'm very encouraged by. I think it's a credit to the leadership of Jackie Miller from the union and David Hahn from the company that although they will have differences, they are still trying to work together for the betterment of the public. The safety report exemplifies both their leadership, in both of them endorsing the recommendations and saying that they will work together to implement. That is real leadership.

G. Coons: Unfortunately, it took so long to happen. The union has been questioning the safety management system for years, and the impact that it's having. I'm not too sure if the minister is aware of variances that

Transport Canada is giving ferries to sail. They are breaking the WorkSafe B.C. regulations.

People are being assigned jobs when they should be…. Under WorkSafe B.C. as a first-aid attendant, they're being assigned marine evacuation duties. So WorkSafe B.C regulations are being broken, and the minister knows that. What is he doing to ensure that WorkSafe B.C. regulations are being followed by B.C. Ferries?

Hon. K. Falcon: I would remind the member that the regulator of the ferries is Transport Canada. It's not the province of British Columbia; it's Transport Canada. For the same reason I don't go in and try to regulate the railways, the airlines or ferries…. They have jurisdiction over that, Member. If you've got a concern about how they're doing their job, feel free to tell them you don't think they are doing their job adequately.

I would remind the member that the Ferry Corp. has one of the best safety records in the world — not just in North America but in the world. It's also one of the largest fleets. They do a very, very good job in safety. The member should know that ferries have to be compliant with the Canada Shipping Act regulation code standards. That's all enforced and overseen by Transport Canada. WorkSafe B.C. has nothing to do with it, Member.

G. Coons: That's something I'm pleased that the Morfitt report…. Finally it came to light — the 41 recommendations. When we read through them…. Yes, there are things that need to be acted upon, and I hope the minister does act upon that and ensure that B.C. Ferries, this corporation, follows up on them and works closely with the union and all stakeholders.

One other thing. I think it was under section 69 where the Coastal Ferry Act seeks to introduce competition to improve customer service and reduce costs. Does the minister feel, after four years of having section 69, that there has been the competitive model that they wanted to introduce to the privatization of our ferries?

Hon. K. Falcon: Well, I can tell the member that the sinking of the Queen of the North certainly threw a wrench in the discussion that was taking place regarding the northern routes. There's no question about it. I know that they're still undertaking some significant work on the Mill Bay route. I think that's route 12. This is, again, overseen under the auspices of the independent commissioner.

The premise behind that was to ensure that wherever possible, B.C. Ferries would not be allowed to operate entirely as a monopoly and that where competitive pressures could be brought to bear, that would ultimately be a good thing for the public.

That may be something that the member doesn't believe in, but actually we have an entire system in our world of capitalism that is predicated on the benefits of competition. That's something we very much support. But at the end of the day, there have got to be competitors that are willing and able and have the capital and the ability to come forward and be competitive in these routes, and that will be overseen by the independent commissioner.

G. Coons: The independent commissioner looks at this and basically has concerns. He observed that the Coastal Ferry Act's alternative service delivery clauses have yet to achieve their intended effect. There have been no alternative service aspects at all. The Auditor General says:

A shambles, as far as the Coastal Ferry Act. At the very end the Auditor General says: "We believe that reducing the cost of ferry services by introducing an element of competition will be difficult to achieve, and there's uncertainty how this section of the act will work in practice."

So you've got both the Auditor General and the commissioner shrugging their shoulders, saying, "We don't know how it's going to work" — in this hybrid model of "we won't know if it's going to be working until perhaps 2050 when it's too late."

I'm just wondering if the minister could explain how B.C. Ferries…. Here they are in a conflict of interest. They've taken down the Chinese wall, as the minister knows — the one detractor that might create that difference. The minister mentioned the northern routes and the bidder. It was the brother of the vice-president of B.C. Ferries finance. So I'm not too sure how you're going to arrange this conflict of interest when you've got the brother of the vice-president of B.C. Ferries bidding on routes.

The Auditor General can't explain how it works. Will the minister address these concerns from his regulator, from the Auditor General, and revise the Coastal Ferry Act so that section 69 isn't there destroying communities as we move on with B.C. Ferries being a monopoly and the regulator doesn't make any sense for coastal dependent communities?

Hon. K. Falcon: It sounded like up until the last 30 seconds of the member's comment, the member was supporting this idea of alternative service delivery. I was quite heartened that the member was actually encouraging competition. So I will take the member at his word that when that day comes when competition is introduced, the member will stand up and cheer us for maintaining the section that allows alternative service delivery.

Having said that, I don't think we should in any way try and undermine exactly what the Auditor General pointed out. It is difficult. It's still being worked on.

There is some work being done on route 12. There were clearly challenges with the northern routes as a result of the sinking. The member is quite correct about that.

The member talks about the dismantling of the so-called Chinese wall. Again, that was as a result of a recommendation by the independent commissioner. All of this is overseen by the independent commissioner.

Having said that, Member, I will tell you that personally I would like to see competition, but I also recognize that this is a very difficult…. There are significant barriers to entry to compete with an existing ferry system. The capital costs are very, very significant. Many of the routes are money-losing routes, of course, so you have to try and determine whether the subsidy being provided will be sufficient to allow a competitor to earn a reasonable return on investment and still operate the route to the benefit of the user.

That's something that the independent commissioner has to oversee very carefully. I am always hopeful that there will come a time, maybe even soon, particularly on route 12, where that option could be realized, but I can't speculate on that.

I would agree with what the Auditor General says — that that is a challenge. It is a challenge. I think we should be honest and up front about it, but still recognize that we're not going to eliminate that because it's a challenge. We believe B.C. Ferries should always be in a position where someone has the opportunity to come in and challenge their dominance on the delivery of that service.

G. Coons: Just a couple more questions. There are a couple of colleagues that may want to ask some questions about ferries in their ridings. Just one last question about ancillary service. We've talked about this before, where the commissioner had concerns about the monopoly position of B.C. Ferries and the reservation system.

The minister, first off, said he would give thoughtful consideration, look at it and analyze the commissioner's concerns. That was a year ago. The Auditor General says that given that the new model for delivering coastal ferry service is not yet proven, it's desirable that concerns raised by the commissioner should be fully addressed. Are you going to address the concerns of the commissioner and the Auditor General about that, especially when he says that legislators may wish to consider how to best address his concerns?

Hon. K. Falcon: The member knows B.C. Ferries is set up as an independent self-financing company, independent from government. I know the company has said publicly that they are looking at some changes to allow passengers to reschedule their reservations, and I believe there will be further information on that to come forward.

I get the concern that is raised by the independent commissioner, but I actually believe that the reservations are serving their purpose well, and I have no intention of changing that.

G. Coons: I'll go to my colleagues for a couple of questions, and hopefully I'll get back to finish up.

C. Trevena: I've been listening to the debate as it's gone on this morning, and the minister has been talking a lot about best interests when it comes to ferries, and how it's not in the best interests of the government or unions but in the best interests of the people who use the ferries. I represent a number of communities that rely on the ferries, from Cortes Island that relies on two ferries, up to the tri-ferry route up in Port McNeil, Alert Bay and Malcolm Island. The issue that I do hear all the time — and I ride the ferries all the time because I live on one of the islands — is the increase in fares.

I wondered, Minister, if you could explain how it is in the best interests of these communities — they are communities with strong business interests, with schools and with people who want to maintain their longstanding routes on these islands — that the fares continue to go up, that the fuel subsidies continue to go up and that the government doesn't effect a cap on this.

Hon. K. Falcon: Well, I think first of all we need to be up front about the fact that fuel costs have gone up pretty dramatically, and this affects a whole range of sectors. Those same individuals you're talking about will see it when they book an airline ticket. They will see it when they take a taxi and pay a surcharge as a result of the fuel costs in taxis. They will see it in lots of different areas, and they are seeing it on ferries.

I wish I could say to the member that there was a magical world where I could sort of make these things go away, and that there was not going to be fuel increases that could have an impact on fuel costs. But I can't do that.

What was put together under the Coastal Ferry Act, as the member knows, is capped rate increases that ensured some stability in terms of the rate increases going forward. But there was a provision that allowed for extraordinary price application increases when there are events like fuel surcharges that have to be dealt with.

I think it's important to recognize that B.C. Ferries last year paid somewhere in the range of $25 million in additional fuel costs. That's a really significant cost. The fuel surcharges that they were provided didn't even cover half of that, and part of what the independent commissioner did, as you'll recall….

Some of the requests that were made by the Ferry Corp. were rejected by the independent commissioner. He ended up giving substantially less in some cases than was requested. The ferries commissioner said that the ferries would have to come up with a fuel conservation plan to demonstrate that they were doing everything necessary in order to reduce fuel costs. They have since done that. It will reduce fuel consumption by about 1.2 million litres of fuel this fiscal year and a further 1 percent next year.

As I mentioned earlier in my discussion with the member for North Coast, the new ferries being built in Germany will lower their fuel costs even more significantly — about 6 percent, I believe, is the figure that they are talking about. They are much cleaner burning too, so there's an environmental benefit. There is a significant fuel savings benefit too, but that does not take away from the fact that this is an issue.

I am hopeful — I'm always hopeful — that we could start to see some downward movement in fuel costs, but of course I'm in no position to guarantee that at all. While I recognize that these are increases that the folks in those communities the member references…. I hear from them too. They write me letters and tell me they would rather not have to pay for this and would rather have the government pay for those fuel surcharges. I am not of the position that that would be the right thing to do.

C. Trevena: It's very interesting that you think it would not be the right thing to do. It is, you were talking here, a matter of principle rather than a matter of cost.

I have a couple of questions for you from your answer. You say that there have been a number of efforts made to reduce fuel consumption. I know from our own ferries that they go at a certain speed, and I know that this is all part of trying to reduce fuel costs.

Will that reduction of fuel consumption, and therefore the lower cost that B.C. Ferries will be paying for the fuel, be reflected in lower fares for the passengers?

Hon. K. Falcon: Very unlikely in the short term. They still, as you know, even with the fuel surcharges they have received…. It doesn't even begin to cover half of the additional costs that have resulted. As I say, it's in the range of $25 million annually in additional fuel costs for the Ferry Corp. I don't want to in any way pretend to telegraph that there's going to be some relief in sight because they are able to come forward with a fuel savings plan.

The fuel savings plan will help, but of course there are limits — right? They can slow down the vessels a little bit. They can undertake some other measures that they have as part of the fuel savings plan, but I don't want to pretend for a second that this is a magical solution to the fuel surcharge challenge.

I do think, and I've said this before, Member…. I don't for a second doubt that these fuel surcharges impact people. They do, and I think that in government I have always believed we should be honest enough to point that out. I also think that we have to put it into perspective. The combined fuel charge rate increases — and I'm going to use Denman Island, Hornby Island and Quadra Island as examples — result in an additional 90 cents for passengers, and for cars and pickup trucks an additional $2.40. That's the combined fuel surcharge rate increase.

I think we have to put it in some kind of perspective. I'm not suggesting that $2.40 isn't money that people would rather save for a cup of coffee or what have you. I also don't think it's entirely unreasonable, given the rather extraordinary situation that Ferries finds itself in with its fuel costs, that the public can help them deal with that.

C. Trevena: So $2.40 per trip for one person with one vehicle. We then have to add on the cost of their partners and their other passengers. I know that regular ferry users get discounted books of tickets.

I think what we're seeing here is that ferry users are being forced to pay for increases that other uses are not being forced to pay. We are not seeing these massive increases in bus fares. Yes, people pay more to fly places, but flying places isn't part of regular commuting or the regular road service.

I think, Minister, we do come back to the fundamental question of what you said earlier: that it's a matter of opinion. On this side we still believe that our ferries are part of our road system and that people should not be paying to use our road system.

I wondered, Minister, whether you are talking at all with the Minister of Community Services and the Minister of Economic Development — we've seen the recent census figures — about the impact that these increases are having on communities and about how to make sure, while our marine highway is being hurt by the cost of fuel, that the communities which that marine highway serves are being assisted through whatever packages can come. We're talking about businesses, schools, health clinics and first nations reserves that are being affected. The impact is absolutely huge.

Again, I'll use the example you used: Denman-Hornby. You've twice quoted areas not in my constituency. You also quoted North Coast. Quadra is in my constituency. We often see trucks moving farmed fish on the Quadra ferry. We see industrial trucks and logging trucks moving on the Quadra ferry. We see transport that serves the stores on Quadra and over on Cortes. We see library services being served through this.

Minister, I would hope that you are working with your other colleagues to mitigate the effects and to make sure that our communities can survive.

Hon. K. Falcon: I've been advised to correct the member's interpretation. The $2.40 is round trip, per person. It's not each way.

Hon. K. Falcon: We're not supposed to talk to each other, but you are aware. You made it sound like…

Hon. K. Falcon: …that wasn't the case, and I just wanted to make sure that we stated that for the record.

I sort of canvassed this issue with the member for North Coast, and I'll say it again. The government actually provides every year — and it grows every year…. I believe it's about $117 million or $118 million this year

to subsidize those routes that the member talks about. That is a pretty significant commitment.

Operating a ferry system is very expensive. These vessels are complex. There are a lot of labour personnel, and the member talks about wanting free ferry fees. Well, I'll tell you, I don't think that makes any sense at all. There are not going to be free ferry fees under this government. I think that to suggest it under even — God forbid — an NDP government would be the height of irresponsibility.

I would say again that these increases we're talking about for fuel surcharges…. Though I get that people would rather not pay them, I don't think they're unreasonable. Like in any other sector, whether it's taxis or airlines, the public is well-conditioned to the fact that when fuel costs go up dramatically, they are being asked to shoulder some of that cost. I don't believe that's unreasonable at all.

C. Trevena: I just wanted to clarify two points. I never intimated that these were one-way trips. I live on an island. I know full well that these are round trips; you pay one way. Nor did I intimate that these ferries should be free. I did intimate that this is part of our marine highway.

D. Routley: To the minister: I've been listening to this debate over fuel costs and phrases like "have the government pay." I think what people want is for the government to provide services that we require for our communities to be viable. Fuel costs are a perfect example of why it was a mistake to privatize B.C. Ferries. The public advantage has been traded off. In fact, the increased cost of GST to the corporation and the increased interest rate charges that have been incurred by the corporation amount to more than the fuel surcharges so far.

It's galling for the minister to speak this way. It's galling because people expect service. Nor did the previous member make any insinuation that she expected free ferry fares. What she expects is for the government to do their level best for the service to serve its communities to their best. To say that somehow the public interest is for them to pay directly in a user fee….

I would ask the minister why it's okay, then, for ICBC to pay for the costs of the damage done to so many vehicles on Highway 18 through the seal-coating disaster. It's okay for the entire province to underwrite that cost, but then when it comes to ferry fares, which benefit the entire province, the economic development of our Gulf Islands and those communities and the viability that they represent…. It's just galling.

But that's a statement. I have a question for the minister about the Kuper Island service. Kuper Island is a vulnerable community suffering very high rates of unemployment, seeking always to improve their economic development. Their youthful chief, Lisa Shaver, has a spectacular vision for the island. She's an entrepreneurial, goal-oriented person who has set economic and social development goals for her community. She's a true entrepreneur — the kind of entrepreneur that I expect to be one day again.

Of course, I respect the private entrepreneurs of this province. But does the minister? In fact, the attempts to develop business and enterprise on Kuper Island — such as shellfish markets and businesses, tourism partnerships — are being impaired by these increases. So will the minister commit to supporting a public interest that goes beyond simple user fees, that recognizes that the economic and social development of the small communities serviced by our ferries is important to all British Columbians and that all British Columbians, I believe, are prepared to make an investment in that?

Hon. K. Falcon: First of all, to the member's earlier comments. Apparently the member for North Coast is under some illusion that the 1990s apparently were a magical period of ferries management and operations. I'll remind the member… I'd refer the member to the B.C. Ferry Corp. documented fare history from 1985 to 2001. In there you'll see that between 1991 and 1999 the NDP, that member's government, actually increased ferry fares by about 70 percent during that period of time. During that period of time, under the NDP, B.C. Ferry's debt increased by 1,800 percent.

That's a rather dramatic increase, I think, that even the member would acknowledge — from $60 million in 1991 to $1.1 billion in 2000. Subsequently, about a billion dollars was written off as a result of the irresponsible decisions that were made by the NDP government of the day. So the member can proselytize all he wants about these increases.

What I will say is that this is no different than what is happening in other sectors. I imagine you must be feverishly writing letters on behalf of your constituents to the airlines, the taxi industry and other industries that are also passing along fuel surcharges on behalf of these members. I presume that must be the case. I'm pretty sure you wouldn't just focus your attention on one sector.

Kuper Island — same thing. We're talking about a round-trip increase of about $2.40 for a vehicle or a pickup truck — 90 cents for a passenger. Now, if the member is suggesting that this is now crippling businesses and their ability to create economic opportunity, I would have a challenge to that. There are actually businesses all across the province today that are dealing with fuel surcharges, many much more directly. They have, for example, vehicles that are required to move goods or people around, so they are paying tremendous increases in fuel surcharges, and somehow they're able to survive what is apparently an impossible situation for that member's constituents.

I've said before that I don't want to pretend there's no impact. I haven't said there's no impact. But I'm saying that I believe the impact is modest. I get that people would rather there would be no impact, but I am not going to stand here and say to the people that the taxpayers are going to take care of all the fuel surcharges. That won't be happening.

D. Routley: The minister has tunnel vision. Nowhere did I say that businesses couldn't cope. I said that the economic development of Kuper Island is being impaired by these ever-increasing charges. The people of Kuper Island can barely afford to walk on the ferry and go to sporting events, which is another issue that I think the minister should answer to.

D. Routley: Two bucks — yes. The minister says, "Two bucks," and questions whether that's significant. It is significant to people who have no money. This is very difficult for the minister to understand, but he represents people who have lots of money and also people who have no money, like the people of Kuper Island.

These services were considered public services. These services are part of our infrastructure. It's not like going to the airport and paying a fee to go on a business trip. Yes, I agree with the minister that businesses should be prepared to incur that cost. This is not that by any means. This is our highway system. This is an infrastructure that the people of British Columbia, who he purports to represent, rely upon to survive. It's not taking a taxi across town.

This government's decisions are threatening the viability of rural communities. We see it all across this province, and unless the minister is prepared to recognize that there's a broader public interest than user fees, then he should say so and he should act as such. He should protect the interests of small rural communities and not impose all these costs upon them.

So will he step up and help the people of Kuper Island and the other coastal communities affected by this and somehow reverse the wrongs of the Coastal Ferry Act that has imposed these costs?

Hon. K. Falcon: The short answer is — and I've said this to the member opposite on numerous occasions — that while I get that people would rather not pay fuel surcharges, they are the norm in virtually every sector. We provide a subsidy to those routes of $118 million a year. That is a considerable sum of taxpayer dollars to ensure that rates are kept low for those small routes. That is a commitment that this government maintains.

In fact, the commitment is boosted, as the member for North Coast noted in the plan, as a result of the additional costs that this government has to pay to support and to make sure that those fuel charges don't affect students, seniors, disabled or those needing medical assistance. We're protecting the people that need protection, but I don't think that it's at all inappropriate that some of the fuel surcharge be paid by the users. I won't be changing our direction on that.

Noting the time, Mr. Chair, I would move that the committee rise, report progress and ask leave to sit again.

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