Hansard — Wednesday, April 25, 2007 p.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		7121

Introduction and First Reading of Bills		7123
	Human Rights Code (Mandatory Retirement Elimination) Amendment Act, 2007 (Bill 31)
	Attorney General Statutes Amendment Act, 2007 (Bill 33)
	Hon. W. Oppal
	Pacific Coast University for Workplace Health Sciences Act (Bill Pr401)
	R. Cantelon

Statements (Standing Order 25B)		7124
	Komagata Maru mural
	H. Bains
	Rights of persons with disabilities
	R. Cantelon
	Vimy Ridge poem
	C. Puchmayr
	Cancer Society Daffodil Month
	S. Hawkins
	Bioheat
	M. Karagianis
	Retail business people
	B. Bennett

Oral Questions		7126
	Allegations of partisan media activities by Liberal staff
	C. James
	Hon. G. Campbell
	L. Krog
	B. Ralston
	D. Chudnovsky
	Hon. W. Oppal
	M. Farnworth
	Conflict-of-interest concerns regarding lobbying activities of Ken Dobell
	J. Kwan
	Hon. G. Campbell
	M. Karagianis
	Government contracts to lobbyists
	H. Lali
	Hon. G. Campbell

Points of Privilege		7131
	J. Kwan
	N. Simons

Petitions		7131
	S. Fraser
	C. Trevena
	D. Routley

Committee of Supply		7131
	Estimates: Ministry of Environment and Minister Responsible for Water Stewardship and Sustainable Communities
	Hon. B. Penner
	S. Simpson
	R. Austin

Proceedings in the Douglas Fir Room

Committee of Supply		7151
	Estimates: Ministry of Energy, Mines and Petroleum Resources (continued)
	J. Horgan
	Hon. R. Neufeld
	G. Robertson
	B. Simpson

Hon. J. van Dongen: It gives me great pleasure to introduce a special group of visitors to the House today. In the gallery are the members of the Order of British Columbia Advisory Council. They have gathered in Victoria today to review this year's nominations, which have been made by members of both sides of the House. I understand there were 174 nominations.

The Order of British Columbia Advisory Council is chaired by the Hon. Lance Finch, Chief Justice of the Court of Appeal for B.C. Joining the Chief Justice and yourself, Mr. Speaker, on the advisory council are Brenda Binnie, president of the Union of B.C. Municipalities; Dr. Michael Stevenson, president of Simon Fraser University; Virginia Greene, deputy minister of the Intergovernmental Relations Secretariat; and two members of the order, Dr. Wallace Bakfu Chung of Vancouver and Janet Nita Connolly of Atlin. I ask the House to please make them all very welcome.

H. Bains: It gives me a great deal of pleasure to introduce someone who is a very special friend of mine, one of the persons who works hard so that I'm here in this House — the national director of the Steelworkers, Ken Neumann. Please join me, the entire House here, to give him a warm welcome.

Hon. G. Campbell: I am pleased today to be able to introduce 74 visitors from Our Lady of Perpetual Help School in my constituency, Vancouver–Point Grey. They are grade 5 students travelling with some parents and their teachers Mr. Venegas, Ms. Stefanon and Ms. Schmidt. They're here today to experience the history of these buildings, to learn more about the business of government and parliamentary tradition and, evidently, to take pictures and notes and report back. So everyone is properly warned. I hope we'll make them welcome.

D. Chudnovsky: Today in the gallery are two of my oldest and dearest friends, Bob Rosen and Eva Sherell. I had a wonderful lunch with them today, and I hope that you'll join me in welcoming them to the Legislature.

Hon. W. Oppal: In the House this afternoon is a man who's done a tremendous amount of work in the field of human rights. He's now a member of the multicultural advisory committee council. He's a resident of Richmond — Randy Sandhu. I ask that the House make him feel welcome.

C. Puchmayr: I have four guests in the gallery today. I have the mayor of New Westminster, Wayne Wright, with us today. He'll be meeting with the Solicitor General and me later today. I also have Evelyn Benson and Bonnie Peterson, and I have Don Benson, who is the Poet Laureate emeritus for New Westminster. He is also getting an award today for community achievement. Please make them all extremely welcome.

Hon. O. Ilich: Today it is also my pleasure to introduce somebody else who is getting a community achievement award. Her name is Lois Carson Boyce. She has been a volunteer in my community of Richmond — and also from the other member from Richmond's community — for more than 40 years. She's joined today by Carol Boyce Nelson, Mary Carson Ford, Rose Ella Johnson, Joyce Johnston and James, Arlene, Sylvia and David Sinclair. Would the House please welcome them.

R. Chouhan: I would like to introduce Stephanie Wiebe, a journalism student at Ryerson. She's the sister of Sarah Wiebe, an intern researcher for the NDP caucus. She's also with her roommate, Melissa Musso. Please welcome them.

D. MacKay: We've been here since February, and I notice in the gallery today that I actually have two visitors from my riding. I have one from Dease Lake that I will let the Minister of Community Services introduce. I would like at this time to introduce a school teacher from school district 54 who taught both my children when they went through school. I suspect he's probably teaching my granddaughter. Ian Malcomson is in the House today, and I'd ask the House to please make him welcome.

Hon. I. Chong: It's my pleasure to introduce several people who are joining us in the House this afternoon. Firstly, Dr. Patricia Baird is with us. She's an internationally recognized geneticist who, for more than a year, served as chair of the Premier's Council on Aging and Seniors Issues. Along with 17 other members of the council, Dr. Baird consulted with hundreds of British Columbians, ultimately producing the Aging Well in B.C. report — a report that will be very useful as we plan and prepare for an aging population, when we will see one in four British Columbians being over the age of 65.

Joining Dr. Baird in the gallery is Silas Brownsey from the Ministry of Community Services, who helped provide support to the council and who continues to coordinate government's response to those recommendations.

As well, a very special constituent of the member for Bulkley Valley–Stikine is here, Ms. Margery Loverin from Dease Lake, an employee with the Ministry of Children and Family Development who decided to continue working in the B.C. public service despite reaching the age of retirement. She is joined by two of her relatives from Victoria, Pat and Gary Elander.

S. Fraser: It's a great pleasure today to introduce two friends and constituents, Henry Nedergard and Wolfgang Zimmerman. Henry is a strong advocate for the National Institute of Disability Management and Research, and Wolfgang is the executive director of the same. They're here, hopefully, for an important hurdle that's to be overcome today in a step in the creation of the Pacific Coast University of Workplace Health Sciences. Would you please help me make them feel very welcome.

Hon. R. Thorpe: I'd like to introduce Steve Tuck, a constituent who is a recipient of the British Columbia Community Achievement Award, which will be awarded later today at Government House. Accompanying Steve today is his wife Teresa and their very good friends, Valerie and George Solomonides. Would the House please make them feel very welcome.

G. Coons: I also would like to acknowledge a recipient of the Community Achievement Awards, Edna Mason, for outstanding achievement in education in her community of Klemtu. Please make her welcome.

R. Cantelon: Also with us in the House today, I'd like you to welcome Ken Neumann, the national director of the United Steelworkers union and board member of NIDMAR; Lee Coonfer, the director of public relations for Canfor; Brian Payne, who is co-chair of NIDMAR and former president of the CEP union of Canada; Valerie Royle, president and CEO of the Yukon Workers Compensation Health and Safety Board and board member of NIDMAR; Tricia Janzen, national director of human rights practices; Bonita Thompson, legal counsel with Singleton Urquhart; Roger Stanyer, member of the B.C. Competition Council; Gillian Trumper, former MLA for Alberni-Qualicum; Jim Chutka, the executive assistant to MP for Nanaimo-Alberni James Lunney; and Gerard Janssen, former MLA for Alberni-Qualicum. Please give them a warm welcome.

D. Cubberley: Joining us in the gallery today are 24 grades 4 and 6 students along with their parents from Pacific Christian School, and they're in the company of Ms. Houston, who is their teacher. Will the House please join me in making them welcome.

S. Hawkins: On behalf of Mr. Speaker, I'm pleased to welcome and introduce 18 teachers from across British Columbia who are participating in the Legislative Assembly's fourth B.C. Teachers Institute on Parliamentary Democracy. They will be with us for the remainder of the week, expanding their knowledge of both our parliamentary and political systems. They are joined by three of their peers who are acting as facilitators. I trust many of you will have the opportunity to meet them during their time here at the institute.

Accompanying them is Becca Kenna-Schenk, Senate civic education program from the Washington State Legislature. She's here to learn from her neighbours from the north how to offer an educational opportunity to their teachers. I'd ask the members to make them very welcome.

Also, this afternoon we have three guests from the Alberta Legislative Assembly. We are joined by Dr. David McNeil, who is the Clerk of the Alberta Legislature; as well as Miss Rhonda Sorensen, who is the manager of communication services; and Miss Val Rutherford, manager of planning and development. They will be joined tomorrow by another colleague, Corrine Dacyshyn, who is a Committee Clerk. The group is here in Victoria to examine British Columbia's parliamentary committee system. I would ask the House make them feel very welcome.

K. Conroy: I, too, would like to welcome some constituents who have travelled all the way from West Kootenay–Boundary. I don't get many of them, so it's a great pleasure to welcome Ian and Margaret Davidson.

J. McIntyre: I'm pleased to say that my former business partner, my very good friend and a Canucks fan extraordinaire, Evi Mustel, who is the president of Mustel Group, is in the gallery today. I'd like the House make her feel very welcome.

J. Nuraney: It's a real privilege today to introduce to the House George McLean, a veteran of the war, freeman of the city of Burnaby, with 50 years of community service to our communities in Burnaby. He continues to serve and is a very active Rotarian and a member of the Crime Stoppers right now. He's here to receive his Community Achievement Award and is accompanied by his family — his two daughters and his sons — and a friend, Allen. May the House please make him feel very welcome.

J. Yap: I'm delighted today to introduce two visitors in the public gallery. These two gentlemen are members of the executive of the Canadian Bar Association of British Columbia. Frits Verhoeven is the president this year. He's also a constituent of mine from the riding of Richmond-Steveston. With him is the vice-president, Ken Walton. Would the House please make them very welcome.

D. Routley: A constituent of mine, Brian Payne, retired president of the CEP, is with us. I'd ask the House to help me make him welcome.

B. Bennett: It's my great pleasure to introduce a fellow from Cranbrook who is in the gallery somewhere. His name is Garry Anderson. Garry started the Canadian Museum of Railway Travel. Cranbrook is a railway town. The railway came in there in 1898. Garry started the museum in 1977 with one car. It's now an internationally acclaimed museum.

Garry is being honoured tonight with the B.C. Achievement Award. I found out today, actually, that Garry Anderson has also been awarded, as of today, the National Achievement Award from Heritage Can-

ada for the restoration at Royal Alexandria Hall, which is a wonderful meeting place as part of his museum. Please help me welcome to the House one of B.C.'s real heritage stars, Garry Anderson.

R. Hawes: In the gallery today are Jim and Terry Taylor. Jim is a school teacher in Mission and very much an environmentalist, here to receive a well-deserved Community Achievement Award, particularly for his work in introducing kids to how we should be looking after our environment.

With Jim and Terry is His Worship Mayor James Atebe of Mission, who has come to watch and accompany Jim getting his award and to honour Jim's great achievement in our community. Could the House make them all feel very welcome.

S. Hawkins: Also in the gallery today is someone who is a tireless advocate in the fight against cancer. Barbara Kaminsky, who has been the CEO of the Canadian Cancer Society, B.C. and Yukon division, for the last 12 years, is visiting the House. On behalf of the House, I would like to welcome her and thank her for her efforts.

Hon. G. Abbott: I also would like to welcome Barbara Kaminsky to the House and to note that joining Barbara today is her mother Mary Mysko; her sister Phyllis Lewis; Clair Buckley, a former board chair of the Canadian Cancer Society — B.C. and Yukon Division; and Catherine Richardson, director of human resources at the Canadian Cancer Society — B.C. and Yukon Division.

I'd like to join with the member and all members of the House in welcoming these guests and saluting the wonderful work that's done for us each and every day by the Canadian Cancer Society.

Hon. W. Oppal presented a message from Her Honour the Lieutenant-Governor: a bill intituled Human Rights Code (Mandatory Retirement Elimination) Amendment Act, 2007.

Hon. W. Oppal: I move that the bill be introduced and read a first time now.

Hon. W. Oppal: I'm pleased to introduce Bill 31, the Human Rights Code (Mandatory Retirement Elimination) Amendment Act, 2007. Bill 31 will eliminate the ability to impose mandatory retirement in British Columbia as of January 1, 2008, in all sectors and in all workplaces.

In December 2006 the Premier's Council on Aging and Seniors Issues recommended amendments to the Human Rights Code to recognize human rights and eliminate the ability to impose mandatory retirement. The council also recommended that the Human Rights Code protect against age discrimination in the provision of accommodation, in the provision of services and facilities normally available to the public. Bill 31 will make these amendments to the Human Rights Code.

In addition to the work of the Premier's council, the development of these amendments has also benefited from the views of private and public sector employers and employees and views conveyed in many letters received from individuals from all over the province. The council identified the Human Rights Code amendments as the key to its vision of British Columbia as a province where older people can remain involved and interact with others in their communities, fulfilling their roles that are respected and valued.

Mandatory retirement is a policy of the past, not of the future. The council is to be commended for its vision, and I know it's a vision that is shared by all British Columbians. Bill 31 is an important step towards its achievement.

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

Bill 31, Human Rights Code (Mandatory Retirement Elimination) Amendment Act, 2007, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Hon. W. Oppal presented a message from Her Honour the Lieutenant-Governor: a bill intituled Attorney General Statutes Amendment Act, 2007.

Hon. W. Oppal: I move that the bill be introduced and read a first time now.

Hon. W. Oppal: Regrettably, this bill isn't as exciting as the last one. It's Bill 33, Attorney General Statutes Amendment Act, 2007. It's guaranteed to cure insomnia.

This bill amends a number of statutes under the mandate of the Ministry of the Attorney General. The amendments to improve efficiency and access to justice are made to a number of statutes. They include the Administrative Tribunals Act, Court of Appeal Act, Evidence Act, Legal Profession Act, Legal Services Society Act, Offence Act, Provincial Court Act and Supreme Court Act.

In addition, changes to the Family Maintenance Enforcement Act and the Family Relations Act will serve to improve efficiency and strengthen child sup-

port amendments in British Columbia. These amendments will ensure that children receive financial support they're entitled to from both parents.

Finally, Bill 33 contains validations, confirmations and repeals as well as consequential and related amendments to keep the statutes up to date and to provide certainty. This includes amendments to the following acts: the Interpretation Act, the obsolete provisions repeal act and the Statute Revision Act.

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

Bill 33, Attorney General Statutes Amendment Act, 2007, introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

R. Cantelon presented a bill intituled Pacific Coast University for Workplace Health Sciences Act.

R. Cantelon: I move that Bill Pr401, 2007, entitled Pacific Coast University for Workplace Health Sciences Act, be introduced and read a first time now.

R. Cantelon: It is with pleasure that I act as sponsor of this bill to create a new private post-secondary institution, the Pacific Coast University for Workplace Health Sciences, in British Columbia. This institution will be a worldwide centre of excellence specializing in research and education in occupational health and safety, disability management and rehabilitation in our province.

The proponent of this bill, the National Institute of Disability Management and Research, wishes to establish this institution to promote research and higher education, safe workplace practices, and methods and programs for disability management and rehabilitation of injured workers.

This is an important and worthy goal. In Canada approximately 24,000 permanent disabilities occur annually. The cost of the entire Canadian workers compensation system in 2005 was in excess of $7 billion. But it is first a social cause, Mr. Speaker. It's an unfortunate fact that workers who are injured on the job who fail to be rehabilitated and reintegrated into the workplace within the first year…. Ninety percent of such people never re-enter the workplace.

This private bill, if passed, will continue the society incorporated as the Pacific Coast Education Society for Workplace Health Sciences as a not-for-profit society. Subject to receiving approval of the Degree Quality Assessment Board, the university will be eligible to grant degrees in its own right and name and to award certificates and diplomas.

This bill will set up the structure, authority, rights and obligations of the university and establish an international research advisory council to advise the university's board or academic council on research required to address critical issues and to facilitate international cooperation, collaboration and partnership on this issue.

This bill has been reviewed by both the Ministry of Advanced Education and the Ministry of Finance. I support this bill, and I ask that all members of this House also support the worthy objectives of this new bill. I'd like to acknowledge the support and commitment from the member opposite from Alberni-Qualicum in helping this to come to pass today.

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

Bill Pr401, Pacific Coast University for Workplace Health Sciences Act, introduced, read a first time and referred to the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills.

H. Bains: I want to congratulate the Progressive Intercultural Community Services Society in Surrey for their contribution to our community, especially their efforts to remind us of the importance of the struggles and values of the passengers of the Komagata Maru.

Charan Gill and PICS commissioned Jarnail Singh, a prominent artist, to paint a life-sized mural on the side of the PICS complex in Surrey. This mural was painted from a photo taken of the passengers on the Komagata Maru some 93 years ago.

I'm especially proud of this mural for the message it instils in all of us. In my view, it lets us cherish the courage of the passengers of the Komagata Maru and honours their progressive thinking, their bravery and their valour to challenge the laws of the day in the name of justice. These people put their lives on the line for their beliefs and to stand up for what was right.

This mural should serve as a reminder to all of us and to the coming generations that injustices should not be tolerated at any time. Whether they are societal or legislative injustices, we need people to understand that it is their right to oppose things that are not just.

I stand before you today with great pride that they left us with a country to live where there's established acceptance for all faiths, customs and beliefs, where we enjoy free speech and democracy. Please join me in honouring all of those people and organizations who stood up against injustices and thank them for their courage, bravery and compassion towards our humanity. It was their work and vision that laid the foundation to build a society that strives for social and economic justice for all and where we find unity in diversity.

R. Cantelon: Discrimination against people with disability takes many forms. I think we're most familiar with access and public access to buildings, but there are more subtle and insidious ways that put up mental barriers for people with disabilities.

I had a conversation with a recently disabled worker, and he was putting a very brave face on things. He was an athletic young man who had been a successful manager of a retail store. But then something happened. His boss said: "Well, now you'll be co-manager of the store." So what does that say to him? Perhaps he's something less than what he used to be, less of a man than he used to be, and you could see the pain and anguish in his face.

This is a common thing right across Canada and right across the world. On March 20, 2007, the United Nations addressed this with a convention on the rights of persons with disabilities. The purpose of the present convention is to promote, protect and ensure the full and equal enjoyment of all human rights and fundamental freedoms by all persons with disabilities and to promote respect for their inherent dignity.

Persons with disabilities include those who have long-term mental, physical, intellectual or sensory impairments which, in interaction with various barriers, may hinder their full and effective participation in society on an equal basis with others.

This convention was signed, and Canada was a signatory at the introduction in March — one of 85 countries. I know this is a theme and a philosophy that everybody on both sides of this House can embrace and endorse and encourage.

C. Puchmayr: This was written by New Westminster's Poet Laureate, Don Benson, who is receiving an award today. It's Canada's Unknown Soldier.

S. Hawkins: April, as we all probably know, is Canadian Cancer Society's Daffodil Month all across Canada. This is the time when volunteers from coast to coast work together to give their time and effort to raise both awareness and funds in the fight against cancer.

Cancer is the leading cause of premature death in Canada. Almost all of us have been touched by cancer, either directly or through a loved one or a friend. Every seven and a half minutes, one Canadian dies of cancer.

A report recently released by the Canadian Cancer Society estimates that in this year alone, about one in 200 Canadians will be diagnosed with some kind of cancer. Here in British Columbia we have some of the best cancer statistics and some of the best cancer standards and outcomes in the world. We have been successful in lowering our incidence rates of cancer because of our major emphasis on preventative strategies, which focus on tobacco reduction, increased physical activity and healthier diets. All of these strategies help reduce the major risk factors of cancer.

Chances of surviving cancer are higher in British Columbia than in most other parts of Canada for a variety of cancers. In British Columbia we're very pleased to work with the Canadian Cancer Society, British Columbia and Yukon Division, as one of our partners in our approach to the prevention and control of cancer.

The bright yellow daffodil stands for the fight against all cancers. When the Canadian Cancer Society volunteers come to your door, please give generously, and know that your donations fund research to help those who are fighting their battles with this disease.

M. Karagianis: I've stood in this House on several occasions and talked about the advantages of biodiesel as a bridging option for vehicles until the future of personal transportation is more evident. On a recent trip to the Cranbrook area, my good friend from Nelson-Creston, knowing my passion for biodiesel, pointed out the local biodiesel provider there.

Today I want to talk about the options for bioheat applications for home and business heating. We have seen the emergence of bioheat for home use right here in the CRD and even out there in Cranbrook. I think there are endless opportunities for bioheat to be used in business buildings as well.

As government we can lead the way. We can endorse bioheat for all government buildings. Anywhere that oil heat or heated boilers exist, they can switch to bioheat. That could even include this legislative building. If we are going to change the lightbulbs to be more responsive to climate change, I think we can certainly take the much larger step to heat our buildings with bioheat.

According to the U.S. National Biodiesel Board, the only difference between large commercial boilers and home use is the amount of gallons that you consume. They are all the same fundamental application as home heating through the big boilers. The clean cities initiative in the U.S. is strongly in support of the shift to bioheat. I think we can be as progressive as they are, and in fact I think we can be more progressive.

We all know that it will take a paradigm shift in each of our own lives in order to take on the challenge of slowing climate change. Collectively, I think that as government we can show that as a whole we are also prepared to make that paradigm shift and lead the way. So I hope we can take on that challenge here.

B. Bennett: Retail Week in B.C. starts in a few days, and this is my opportunity to honour those small business people who work so hard.

I grew up in a retail family with five kids. We all worked in the family business. My mother and father owned a furniture store in a small town in Ontario that my grandfather started in 1926. Today my brother competes successfully with the likes of The Brick and Leon's, and most days he wins, at least often enough to stay in business.

My father told me when I was a kid working in the family business that when I was in his house, I had two choices. I could work, or I could go to school. Those were the only two choices we had.

Small business people have the work ethic, or they don't survive. Many of them have no pension or health care plan, and their business plan is jeopardized every day by a million uncontrollable, unexpected things like SARS, BSE, 9/11, floods and forest fires.

I ended up owning my own small business at the age of 27. My wife and I went through the complete entrepreneurial experience, from the startup when you have no money to the good day when you finally get to sell your successful business. I've had to go to suppliers with my cap in hand to ask them for a little more time to pay, and I've been kicked out the door by a chartered bank for the simple reason that their studies showed them that resort businesses are likely to fail.

Small business people are resilient. They are particularly busy right now, with such a strong, expanding and confident economy, which some people would have us believe is 100 percent due to strong commodity prices but which I know is largely due to the smarter regulations, lower taxes and support of free enterprise.

With retail, money stays in the community. Retail business people volunteer for the local service clubs, and they donate a portion of their often meagre profits to churches, sporting and youth groups, food banks and all the other positive community ventures that we are all familiar with.

I want to congratulate the Minister of Small Business and Revenue for the work he's done to streamline regulations and to reduce the tax burden on our job creators in small business. I look forward to celebrating Retail Week with all of the hard-working retailers in the East Kootenays.

C. James: "I believe that the Premier and the Office of the Premier are the fundamental arbiters of accountability…. They are the fundamental referees of accountability within the government…the Premier must always lead by example. His office must lead by example."

Those words came from this Premier when he was Leader of the Opposition. Will he now live up to those words and tell the people of British Columbia if staff in his office are still engaged in blatant partisan media manipulation?

Hon. G. Campbell: We canvassed this yesterday in this House. I said yesterday and I will say today that there are matters before the courts. I will not be answering questions that arise from those matters before the courts. That, in fact, is a reflection of the responsibility we have to protect the integrity of the courts and the legal process in British Columbia.

C. James: Well, the Premier has refused to answer simple questions about what the taxpayers pay his staff to do. British Columbians know that the Liberal staff have been caught playing dirty tricks before. Taxpayers want to make sure that the Premier has put a stop to it.

"The Premier must always lead by example." Those are the Premier's own words. So once again I ask the Premier: will he in fact do that today — lead by example and make sure that he's accountable to the taxpayers by investigating his staff?

Hon. G. Campbell: I can assure the Leader of the Opposition that I intend to continue leading British Columbia by example. Part of that example is to be….

Hon. G. Campbell: Part of that example is to be forthright with regard to what I believe are my responsibilities. I understand the responsibilities of the opposition to ask questions. They certainly have to carry those responsibilities out.

I have a responsibility, as I have said, to protect the issues that are currently before the court. I do not intend to comment on issues that are before the court or arise from that court proceeding until it is complete.

C. James: Well, I can tell you what kind of an example we have. It's a sad example of a Premier who's hiding behind a court case to avoid accountability. That's the example we have in British Columbia.

C. James: Last week we learned that Jessica McDonald launched an investigation into the conduct of Pilothouse lobbyists and former Deputy Minister Paul Taylor. That investigation was launched after an e-mail from Pilothouse surfaced — the very same people who are involved in the current court case. We all know that information is part of the trial.

Again, to the Premier: if Jessica McDonald can investigate Paul Taylor and Pilothouse, why can't the Premier investigate his own staff now?

Hon. G. Campbell: If we know anything, we know the position that the Leader of the Opposition would take with regard to the integrity of the courts here in the province of British Columbia. I can tell you this, and I will tell the members of the opposition this. I understand the role that opposition plays, and everyone in British Columbia welcomes that role.

None of us would like anything better than for that court case to run its full gamut and to have a conclusion of that court case. However, as I have said, I do not intend to respond to questions that arise from that court case. I believe that would be wrong. Therefore, that will remain my position.

It is our responsibility in this House to reflect on and respect that. That's exactly what this side of the House, at least, will always do.

L. Krog: Well, both yesterday and now again today, despite every opportunity to do so, for the Premier to tell this House whether government staff in his office are currently — and I ask the Premier to listen — engaged in dirty tricks like calling in to talk show radio hosts and lobbing softball questions to the Premier….

Government appointees like Prem Vinning and Steve Vander Wal have been caught before. One would think the Premier would want answers. But now the Premier is caught in a double standard. His own deputy is investigating Pilothouse and Paul Taylor but won't touch allegations of media manipulation in his own office.

Why is the Premier protecting his dirty tricks operations but investigating the activities of Paul Taylor?

Hon. G. Campbell: Let's at least get the facts straight. My deputy received an e-mail from a third party through ICBC. She felt it was important that she fully investigate that. She did. She found no substance behind the e-mail. However, out of an excess of caution, she decided to have a third party fully review all aspects of that e-mail. That third party will be reporting out. That report will be made available to the public, subject to the Freedom of Information and Protection of Privacy Act.

L. Krog: The Premier has now had two days to denounce political dirty tricks. He's had every opportunity in this House, through numerous questions, to denounce political dirty tricks, but instead he's continuing to stonewall. Sadly, the Premier's silence on this issue is starting to sound a lot like he's prepared to condone political and partisan trickery.

My question to the Premier is very simple. Does he condone blatant partisan political manipulation occurring in his office? Is he going to be prepared in this House today to stand up and condemn it?

Let me be clear. I encourage people to be involved in public life. I encourage people to have ideas about how we can make this province better. I encourage people to serve. I encourage them to serve in elected office. I encourage them to serve in public service. It's a rewarding occupation. It's something, frankly, all members of this House should be encouraging people to do. I intend to continue doing that, and I intend to continue serving the people of British Columbia.

B. Ralston: The Premier leans on legal advice to remain silent about a case that is currently before the courts. My question concerns current Liberal staffers who are working in this building here today.

The Premier has a broader public duty to lift the cloud over his office and reassure taxpayers that we aren't footing the bill for partisan activities. Will the

Premier please advise the House what steps he has taken to assure the public that he isn't condoning political tricks by his current political staff?

Hon. G. Campbell: Let's be clear. There is not a cloud in British Columbia with regard to the public service or people who are actively involved in the public service.

Hon. G. Campbell: I think that, again, the opposition has every opportunity to ask questions, and they're welcome to do so. However, the fact that they ask them on a regular basis does not mean that the answer changes. I intend to act according to what I believe is right, which is to protect the integrity of the court proceedings that are currently underway.

B. Ralston: Let's be clear. I'm not referring to the broad public service; I'm referring to the political staff hired as appointments in the Premier's office. The people of the province deserve to know this.

Are they still paying for the Premier's political staff to call in, faking their voices as ordinary citizens, to political radio shows?

Hon. G. Campbell: I do not intend to answer any questions which arise from the case that is currently before the courts.

D. Chudnovsky: This is not so complicated. There are questions as to whether staff in the Premier's office are carrying on activities which all of us would see as inappropriate. There are questions as to whether people in the Premier's office are making fake phone calls, pretending to be someone who they're not. There are questions as to who might be paying those people to carry on those inappropriate activities.

You'd think that in that context, the Premier would want to at least have a meeting with the people on his staff and say: "It's my point of view that that's not what the people on my staff should be doing." My question is: has he had that meeting?

Hon. W. Oppal: All of this arises out of the allegations that are being made presently in the Supreme Court of British Columbia. It would be totally improper for us to comment on anything that takes place in that trial or anything that arises out of the evidence or the allegations that have come to light in that trial.

D. Chudnovsky: My question to the Premier: has he called a meeting? Has he sent a message? Has he issued a memo? Has he issued a directive? Has he done anything — anything — to send a message to the people on his staff that these questions need to be answered and that this kind of activity is inappropriate? Has he done anything to send that message to his staff?

Hon. W. Oppal: The questions are the same. They're merely being asked by different persons. The fact is….

Hon. W. Oppal: We will not comment on anything that arises out of allegations that are being made in the Supreme Court of British Columbia.

M. Farnworth: What's clear is that it doesn't matter who is answering from the other side; whether it's the Premier or the Attorney General, the stonewalling is the same. The people of this province want more than stonewalling. They want answers.

My question is to the Premier. He says he wishes to lead by example. He says he wishes to bring and encourage new people into politics in this province. So will he do that, and will he tell people who are interested in running for public office in this province that it is unacceptable for members of his staff or, in fact, any minister's staff to engage in dirty tricks in the province of British Columbia?

Hon. W. Oppal: This is all about respect for the integrity of the criminal justice system. It is obvious that that side of the House don't understand the independence and the workings of the criminal justice system. They run with baseless allegations. They base their questions on that, and they expect us to answer them.

There's no basis for answering any of those questions. The answer remains the same. We will not comment on anything that impacts on the fairness of the trial.

M. Farnworth: What's clear is that the government doesn't want to answer for the activities of members in the Premier's office staff. I'd like to ask a question to the minister who's responsible for paying those staff. Does she believe that it's appropriate for people who are being paid by taxpayers' funds to be engaged in partisan activities?

Hon. W. Oppal: This is a classic case of taking an allegation and making a finding of fact. The basic premise of the question is so faulty…. There's no factual basis for that question at all — none.

J. Kwan: Well, that's why there's a call from this side of the House for an investigation, which this government refuses to look into. To date, the Premier has refused to answer questions about his staff manipulating the media. He has yet to answer any questions about his top adviser, Ken Dobell, who is under investigation for violating the Lobbyists Registration Act.

But the investigation won't look into potential conflict of interest and the many hats that he wears. Mr. Dobell even sent a letter outlining his conflict concerns to the Premier's deputy, Jessica McDonald, and Vancouver city manager Judy Rogers.

My question to the Premier is this. Who cleared Mr. Dobell of conflict of interest regarding his duelling contracts and responsibilities with the province of British Columbia and the city of Vancouver, and did the Premier personally sign off on that?

Hon. G. Campbell: As the member has noted, Mr. Loukidelis, the FOI commissioner, is carrying out a fact-finding review with regard to the allegations the member opposite is making. Mr. Dobell was forthright in telling me what he was doing for the province. Obviously, I knew. That was part of his contractual obligations — softwood lumber, Gateway opportunities, etc. He also informed us of the activities he was taking on behalf of the city of Vancouver.

Let me be clear to everyone in this House. This government intends to work with the city of Vancouver, with the city of Prince George, with the city of Terrace, with the city of Victoria, and we will….

Hon. G. Campbell: The fact that those jurisdictions have people on retainer is clearly something that they decide to do independently of this government. We will, however, continue to work with municipalities across the province to make those municipalities better places for everybody to live.

J. Kwan: Let's be clear. Mr. Loukidelis is looking into the issues around violations of the lobbyists registry. My question is around conflict of interest. Mr. Dobell, with all of his many appointments and contracts, is subject to the standards established by the board resourcing and development office. Those standards state: "There must be no apprehension of bias, based on what a reasonable person might perceive."

Even Mr. Dobell recognized potential perceived conflict, but nothing was done by this Premier. He ignored those concerns. Can the Premier tell this House if those rules were used to determine if Mr. Ken Dobell was in a conflict position? Or did those rules not apply to Mr. Dobell, his personal friend and adviser?

Hon. G. Campbell: It's interesting to hear the questions coming from the opposition. Mr. Dobell has over three decades of public service…

Hon. G. Campbell: …for the city of Vancouver, for TransLink and for the province of British Columbia. In April of 2005 Mr. Dobell was contracted with the province to work on a number of issues. He worked on the softwood lumber file. I can tell you he did exceptional service on behalf of all British Columbians on the softwood lumber file. He worked on the province's…

Hon. G. Campbell: …Gateway strategy. I can tell you on behalf of all the people of British Columbia that he did exceptional service on behalf of developing the Gateway strategy between the province and the federal government. Then Mr. Dobell was put on retainer by the city of Vancouver to help with cultural and housing issues.

Now, on this side of the House, we actually like to try and start solving the housing problem, as opposed to talking about solving the housing problem. If the city of Vancouver….

Hon. G. Campbell: If the city of Vancouver decided to have Mr. Dobell on retainer, that was their choice. The province is pursuing our provincial agenda, our provincial objectives through the Premier's Task Force on Homelessness, Mental Illness and Addictions, through the initiatives we've undertaken to start closing that gap, to start working with cities and to provide people who need a home with the shelter that they deserve.

M. Karagianis: Well, Mr. Ken Dobell chairs the finance committee of VANOC, which oversees venue planning. He's also a board member of Legacies Now, which is responsible for program delivery. At the same

time he's registered as lobbyist and consultant to the city for the 2010 cultural precincts project. He was the chair of the convention centre board and managed to project that into cost overruns that are yet to be imagined. And he still remains a special adviser to the Premier. The Premier's office has cleared him of all conflict, yet the Premier can't explain to us why and how that was done.

So again to the Premier: on what basis was Mr. Dobell cleared of conflict? If the Premier cannot answer that question, is he prepared to launch yet another independent review?

Hon. G. Campbell: Again, I can only speak to Mr. Dobell's exceptional record of public service. Would that any member of the opposition had the same degree of public service and contribution to the people of British Columbia or to the people of Vancouver.

Hon. G. Campbell: Mr. Dobell was on retainer to work with us on a number of projects. I've highlighted those — the softwood lumber agreement, the Gateway project. I think that members opposite should talk with people that Mr. Dobell has worked with on behalf of the province.

Let me be very clear. I think we're lucky that Mr. Dobell has been willing to be such an exceptional public servant.

M. Karagianis: Well, you know, the Premier's office has maintained that there's no conflict, and the Premier evidently can't provide any kind of rationale whatsoever for why there has been no clear path here on determining the conflict of interest. All we know is that the Premier's friend and insider, Mr. Ken Dobell, wrote a letter to his protégé at the city, Judy Rogers, and to Jessica McDonald, his protégé in the Premier's office. It's this tight little circle that has decided there's no conflict.

But I'd like to know if he can explain why he has not done due diligence on this and consulted with the AG's office to protect taxpayers from this very evident conflict of interest.

Hon. G. Campbell: Again, I appreciate the fact that the opposition wants to ask these and has a responsibility to ask questions. I would ask that they let Mr. Loukidelis's fact-finding review run its course, and I would ask that they simply look at the facts.

Mr. Dobell is on contract and retainer with the province of British Columbia. He was also retained with the city of Vancouver to help them with some of the challenges that they face. I believe there are many, many people in the public sector who would reflect on the work he has done and say that that's been a major contribution to the people of Vancouver and to the people of the province.

Let me just give the members opposite a little news flash here. People that live in Vancouver are also people that live in the province of British Columbia, and we're working together to solve problems.

H. Lali: Yesterday we heard the Premier admit that it was only after the matter became public that he investigated the activities of Mr. Paul Taylor vis-à-vis his relationship with Pilothouse. Today he admitted that after receiving an e-mail from ICBC is when he took action.

However, on November 1, 2006, I wrote to the Premier asking questions about senior Liberal government officials who were directing business to lobbyists — specifically Mr. Paul Taylor directing work to Brian Kieran — and if someone in the Premier's office had done any inquiries about Mr. Taylor directing business to Mr. Kieran.

My question is to the Premier: did the Premier at any time following my letter of November 1, 2006, ask his Attorney General to investigate or refer the matter to the Attorney General for an investigation? If not, why not?

Hon. G. Campbell: I did receive the letter from the member opposite. I saw no substance behind the letter. I didn't feel it was important for us to act. Frankly, the member opposite sent a letter, and that was the last we heard of it. What we did was…. When we got an e-mail from a third party through ICBC, my staff reviewed it.

Hon. G. Campbell: My staff reviewed it. My deputy found no substance behind that. Out of an excess of caution, she decided to engage an independent third party to do a full review of the issues arising out of that e-mail, to write a report and to make that report public upon its completion. It will be made public. It will be made available to all the people of British Columbia. That is an appropriate way to deal with those kinds of allegations. They are allegations, and they…

Hon. G. Campbell: …are only allegations. The opposition is incorrect to suggest they're anything else until we've got the results of that review.

M. Farnworth: …on a point of order. I rise, asking the Premier of the province of British Columbia to withdraw the remarks he made concerning the records of public service of members of this House. It was offensive, and it was not something that is in the tradition of the spirit of this chamber.

Hon. M. de Jong: With the greatest respect to my friend the Opposition House Leader, I was listening carefully during question period and heard no such comments. If he wishes to be more specific, I'll certainly entertain that. But I heard no comment that would fall into the category as described by the hon. member.

N. Simons: I reserve the right to raise a matter of personal privilege in this House.

S. Fraser: I submit a petition containing several thousand signatures from citizens of B.C. all over the province urging the government to move forward with the Promotion of Safe Antifreeze Act.

C. Trevena: I have a petition with several hundred names calling for restoration of the child care operating funds, child care resource and referral program, and a commitment from this government to build a strong, affordable and accessible quality child care system.

D. Routley: This is a petition card signed by 94 members of the Cowichan, Lyackson and other tribes seeking the establishment of a joint chief negotiators table which could work to solve six areas identified as causing problems for treaty talks.

Hon. M. de Jong: I call Committee of Supply. For the information of members, in this chamber we will be debating the estimates of the Ministry of Environment and in Committee A the estimates of the Ministry of Energy, Mines and Petroleum Resources.

ESTIMATES: MINISTRY OF
ENVIRONMENT AND MINISTER
RESPONSIBLE FOR WATER STEWARDSHIP
AND SUSTAINABLE COMMUNITIES

Hon. B. Penner: If I may, I'd like to start with a few opening remarks to introduce the 2007-2008 budget estimates for the Ministry of Environment and the Minister Responsible for Water Stewardship and Sustainable Communities.

First of all, I'd like to acknowledge and thank all the staff at the Ministry of Environment for their outstanding work and for their dedication to environmental stewardship day in and day out. Every day, in every region of British Columbia, over 1,400 staff…. In fact, if you look at the budget documents, it indicates that there are 1,493 FTEs for the Ministry of Environment. These staff experts work on the effective delivery of legislation, programs, compliance information and enforcement, and other shared stewardship activities.

It is because of their expertise and their commitment to the betterment of our environment that we are able to achieve our number one priority: to ensure sound and efficient environmental management while protecting air and water quality, and effective stewardship and protection for fish, wildlife and their habitat.

Through partnerships across government and with first nations, communities and the private sector, we are working on enhanced water and air stewardship and protection, and to maintain responsible, sustainable use of our environmental resources.

Climate change solutions will foster innovation and new technologies, which will translate into more jobs, new investments and, ultimately, greater prosperity for British Columbia.

As we all heard in the throne speech, we will continue to build on a reputation for environmental stewardship by establishing targets and actions that will reduce B.C.'s greenhouse gases by at least one-third by 2020. The Ministry of Environment has several closely related strategies in place, such as the air action plan and the climate change plan, to achieve this goal in a realistic, economically viable way.

As indicated in the throne speech, the threat of climate change is very real. Just this past year we suffered from some extreme weather right here in B.C. — from a summer drought severe enough to raise concerns about fish, water supply and agriculture to a series of intense winter storms that left behind a near-record snowpack. Before we had last summer's drought, I do recall that last January and February in the lower mainland, news outlets were commenting on a near-record number of consecutive days of rainfall. We've really gone from pillar to post and back again in terms of weather extremes in British Columbia.

While these weather events have affected the lives of many British Columbians and kept ministry staff very busy, they have also heightened our awareness about climate change. It is imperative that we find ways to forestall global warming and minimize the impacts it has already unleashed.

The B.C. climate change plan will set a clear course for a greener future and a healthier planet. This fiscal year alone we're investing an additional $4 million on climate change actions in addition to an initial $3.5 million in clean air partnerships, which will increase to $5 million in the next fiscal year.

As part of our climate change strategy, we will require that by 2016 all electricity produced in British Columbia have net zero greenhouse gas emissions and that the emissions from the oil and gas industry are reduced to levels that we had in the year 2000. We will also establish tailpipe emission standards for all new vehicles sold in British Columbia, aiming to reduce carbon dioxide emissions from vehicles by 30 percent between 2009 and 2016.

Most importantly, the B.C. government will lead by example, aiming to be carbon-neutral by 2010. As of this past February all new cars leased or purchased by the B.C. government will be hybrids. Let's not forget that earlier this year B.C. became the first jurisdiction in North America to require 100-percent carbon sequestration for any coal-fired electricity project.

While we may have been the first, let me predict that we won't be the last. In fact, I think we're the first in the world, but it's my understanding that the European Union is currently considering a similar policy proposal.

We believe that encouraging and educating all British Columbians to actively care for their environment is key to an ongoing environmental stewardship legacy. That is why we have several initiatives in place to encourage people to make better, environmentally healthier choices. We will continue to offer a $2,000 provincial sales tax exemption on the purchase of hybrid passenger vehicles, and we will put in place incentives to reduce the use of conventional wood stoves and will instead encourage the use of cleaner-burning stoves and encourage industry to adopt better emission technologies. We will continue to explore new ways to promote environmentally responsible personal choices that will reduce carbon consumption.

We are assisted in protecting the environment by the environmental assessment office, which reports in through the Ministry of Environment while retaining its role as a neutral agency with its own legislation. As you know, it coordinates the assessment of proposed major projects in British Columbia as required under the Environmental Assessment Act. It examines major projects for potentially adverse environmental, economic, social, health and heritage effects that may occur during the life cycle of said projects, including construction, operation and decommissioning.

This fiscal year we will be investing, in addition to last year's increase of $1 million, an additional $1.15 million for the environmental assessment office to manage the increase of mining, energy and infrastructure projects entering the environmental assessment process, for a total of $6.95 million.

But fighting climate change and protecting the environment are only two of the Ministry of Environment's many areas of responsibility. In 2003 we established the living rivers trust fund, committing $7 million to protect and restore B.C.'s rivers and waterways, including valuable fish habitat. Last May our Premier tripled the fund to $21 million.

In November 2006 our government determined that $10 million from the living rivers trust fund would go towards a collaborative effort to restore and maintain healthy and diverse salmon populations in the Fraser River watershed. The government of Canada has matched this amount with $5 million in cash and a commitment of $5 million in staff time, which means this important watershed will benefit from a total of $20 million.

In terms of compliance and enforcement we're delivering on a full range of activities. These include educating citizens to be better environmental stewards, promoting the understanding of and compliance with regulatory requirements, conducting investigations and working with ministry programs on a variety of enforcement options.

We aim to assist our enforcement actions by informing and educating British Columbians on how to become more responsible environmental citizens. This includes encouraging changes in attitude and habits, and supporting initiatives and programs like the bear smart and Bear Aware programs, which focus on minimizing human-wildlife conflict.

By educating and informing the public, we can prevent damage before it happens. In circumstances in

which enforcement is necessary, our conservation officers are working in the field every day to ensure compliance. We also, of course, have the new commercial environmental investigations unit, a specialized unit dedicated to the investigation of large-scale corporate and commercial violators of ministry legislation. In addition to the field staff, the compliance division employs 21 office staff members who support the ministry's integrated compliance approach and ensure effective management of the conservation officer service.

Since 2005 we've hired 25 part-time and full-time park rangers, and this year we'll be further increasing the number of positions. Last year we had about 131 park rangers working in the field, and this year we will be adding five new FTEs in terms of park ranger positions.

As I mentioned earlier, we are also proud of our commercial environmental investigations unit, an undercover team dedicated to the investigation of corporate and commercial polluters.

In addition to all of that, we have committed $9 million over three years to establish and operate the B.C. Conservation Corps, a student and graduate mentoring program designed to nurture a new generation of conservationists for the 21st century. This year alone the B.C. Conservation Corps will employ 150 students and new graduates on a variety of conservation projects across the province. These projects will range from species-at-risk inventories to habitat and park restoration initiatives to the student conservation officer service project.

The Corps is not only a great way to give students a chance to get hands-on experience, it also helps to address the growing concern of succession, ensuring that there will be qualified staff to fill in the gaps when our field professionals, and the people seated next to me, start to retire.

In terms of parks and protected areas, I am proud to say that across this province, B.C. Parks currently offers more than 11,000 campsites in more than 800 parks and protected areas. Just last Tuesday I had the honour of introducing Bill 24, the Parks and Protected Areas Statutes Amendment Act, 2007. This legislation establishes 41 new conservancies and three new class-A parks while making additions to 16 existing parks and three conservancies.

We're building on last year's historic central coast and north coast land use decisions to protect some of the most spectacular and ecologically diverse landscapes and coastal areas in the world. Including these new parks and conservancies, since 2001 we have established a total of 46 new parks, 65 conservancies, one ecological reserve and eight protected areas. We've expanded more than 50 parks, three conservancies and six ecological reserves, protecting more than 800,000 hectares. Today 13.8 percent, or more than 13 million hectares, of British Columbia land is protected, which is more than any other province in Canada.

This fiscal year we are investing $4.75 million on B.C. Parks to ensure that British Columbians get the best services at our parks, which number more than 600. I should just clarify that. We're investing an additional $4.75 million on B.C. Parks.

We also continue to negotiate parks collaborative management agreements with a number of first nations right across this province. These agreements will help identify economic opportunities for the first nations involved, increasing economic activity in parks and conservancies and providing opportunities for first nations in rural areas. There are more than 20 such agreements already in place, and the ministry is currently in negotiations for 15 more.

Our approach to environmental stewardship includes developing, promoting and measuring achievements in the conservation of living resources, management of protected areas, and provision of freshwater fish and wildlife recreation opportunities. In the last four years we have established 286 wildlife habitat areas comprising more than 650,000 hectares, and 26 ungulate winter ranges totalling more than 2.2 million hectares.

We continue to use science-based information to develop policy, legislation and regulations that set clear environmental standards and performance expectations. Most importantly, by working closely together with stakeholders, partners and the public, we are fostering shared stewardship and facilitating community initiatives to protect and restore local environments.

It is also the ministry's mandate to provide leadership in water stewardship. This means making sure that water resources and ecosystems are safe, sustainable and valued by all British Columbians. It's our responsibility to support sustainable water allocation and source-water protection and to build public awareness about the importance of this invaluable and finite resource.

It's only natural that thinking of water resources inevitably leads to thinking of our oceans, but oceans are more than simply water. They are extremely valuable ecosystems teeming with life, and they're tightly linked to the economy of our province. It's the responsibility of the oceans and marine fisheries division within the Ministry of Environment to ensure sustainable and integrated management of B.C.'s ocean resources. This includes fostering stable and diverse marine fisheries for social and economic benefits for all British Columbians. Obviously, this involves engaging our federal counterparts in the Department of Fisheries and Oceans.

By supporting the growth and diversification of a verifiably sustainable seafood industry, we will ensure a stronger presence of B.C. sea products in an increasingly competitive global market in which sustainability is becoming a top market requirement.

In terms of sustainable communities, our government has a strategy in place which will not only develop policy but will encourage British Columbians to embrace more sustainable approaches to land and resource development and a healthier lifestyle.

The Ministry of Environment is coordinating a variety of cross-government programs that reflect our collaborative approach to community sustainability in the areas of energy efficiency, green infrastructure planning, air quality, water security, transportation and waste management.

In conclusion, these are pivotal times for the environment in B.C. and Canada and, indeed, in the world — times in which even our smallest actions as individuals can have an impact of global consequence. Through the Ministry of Environment, the government of British Columbia will support a series of initiatives to help each one of us reduce this impact, which will in turn result in a stronger, more sustainable economy for our province.

Budget 2007 will continue to support our mandate to lead the world in sustainable environmental management with the best air and water quality and the best fisheries management, while furthering our efforts to curb greenhouse gas emissions and to fight climate change.

That said, hon. Chair, I look forward to taking a number of questions from the opposition.

S. Simpson: I do look forward to having the opportunity to raise a number of issues with the minister around estimates and doing that over the next number of days.

Just for the information of the minister, we're going to do some general questions around budget, staffing and administration, and then we'll be moving on to questions related to climate change. We'll see how we do on those over the next two days.

I'd like to start by asking the minister to tell me about…. In the ministry estimates we have about an additional $25 million in Vote 29. Could the minister tell us what that additional $25 million is going to get spent on?

Hon. B. Penner: Before I proceed, I should just introduce some of the capable staff that are seated in close proximity to me. Maybe I'll do that when the opposition member returns.

To answer the question, the breakdown of the additional $25 million that the member refers to, there is a $9.6 million increase to water rental remissions to B.C. Hydro. That's related to water use plan implementation. As I already stated in my opening remarks, there's $4.75 million for parks, $4 million additional funding for climate change, $3.5 million for clean air partnerships, $2.317 million related to negotiated salary increases in the Ministry of Environment. There's $59,000 in money earned on trees cut in provincial parks. Pursuant to government policy, the revenue from that goes back to the park system.

R. Austin: Can the minister tell us how the public sector pay increases were budgeted in this ministry?

Hon. B. Penner: Hon. Chair, I was remiss in not introducing the capable staff sitting around me. Seated on my immediate right, the viewers' left, is Chris Trumpy, the deputy minister for the Ministry of Environment. Seated on my immediate left, or the viewers' right, is Lynn Bailey, assistant deputy minister for environmental protection. Behind me is Kathy Brereton, manager of financial planning. She'll stay close behind me, because she's got all the financial details with her.

I believe the member's question related to salary increases for the Ministry of Environment. That is budgeted at $2.317 million.

R. Austin: Have there been any salary increases for political staff this year?

Hon. B. Penner: I'm not aware of anything that's budgeted for 2007-2008 in that regard.

S. Simpson: In regard to that, could the minister tell us who his political staff are in his office and give us a bit of an idea of what their responsibilities are?

Hon. B. Penner: Jerry Muir is my ministerial assistant, and my executive assistant is Sarah Reeves.

S. Simpson: Could the minister tell us what was spent in the previous year on travel for the minister or his political staff?

Hon. B. Penner: Hon. Chair, I don't have the details for last year, but I'm advised by the manager of financial planning that the good news is that we finished the year within budget for the office as a whole, and travel gets paid for out of the office budget. The details of those travel expenses will be made available in public accounts, I believe, in the third week of June.

S. Simpson: Possibly the minister could tell us: is there any plan for increased travel budgets for this upcoming year?

Hon. B. Penner: The total…. On page 43 of the Supplement to the Estimates, you'll find for the Ministry of Environment, under "Minister's Office," projected operating expenses for 2007-2008 of $499,000. All expenses related to the operation of the minister's office come from that amount. Last year the office was budgeted, according to page 42, at $490,000.

S. Simpson: I appreciate that, and I did look in the estimates book, and I saw those two numbers that the minister has just quoted. I'm still curious as to whether we know or have an idea of what portion of that budget is spent on travel for the minister and his staff.

Hon. B. Penner: Referring back to the same document, the member will see — if he turns to page 42, in one of the columns — that an amount of $46,000 is projected for travel expenses for the office.

S. Simpson: Could the minister tell us…? I'll just preface this question a little bit. I'm sure that there's a whole range of people who come to visit the minister's office on a regular basis to talk about environmental issues and to raise and put concerns forward. What I'm looking for, hon. Chair, is to get an idea of how much of the minister's time or the minister's staff's time — Mr. Muir or others in the minister's office — have to pay to that time.

I'd be interested in knowing: does his staff meet with lobbyists — and we'll deem them lobbyists, those people who are in the business of lobbying — and what kind of time commitment does that take?

Hon. B. Penner: The member's correct. There's a pretty steady traffic flow in and out of my office on any given day. The ministerial assistant, Jerry Muir, certainly handles a lot of traffic as well. Various members of the Legislature, including members of the opposition, drop by on a regular basis.

I wouldn't have the ability at this moment to give you an estimate of what percentage of his time goes to meeting with various people. I know the phone rings pretty steadily and the doors swing open and shut on a regular basis, but I don't have a complete breakdown of how many people come and go.

S. Simpson: Maybe the minister could tell us: would that record be available as to around who…? Mr. Muir, I presume, would be the primary point person for the minister, though he could correct me if I'm wrong. Would that information be available — about who those people are that he's spending time meeting?

Hon. B. Penner: I'm not sure if we have a tally sheet by the door for people to sign in when they come and go, but if the member is really wanting to see what's in my calendar, that is available through FOI.

S. Simpson: I'm sure that we'll get your calendar. I'm pretty sure that we'd probably get your calendar, but that does raise the next question.

I very much understand that Mr. Muir or others would be lobbied on a pretty regular basis by people who wanted to talk to the minister or wanted to talk about issues that come under the purview of the minister. Does the minister himself meet with lobbyists?

Hon. B. Penner: I think what the member should know is that under the Lobbyists Registration Act, there is no obligation, legally, for a minister or an elected person to know whether or not the person they're meeting with has registered. The legal obligation rests with the person who is employed in the pursuit of lobbying to register under the Lobbyists Registration Act.

S. Simpson: I accept that that's the law, and I accept that the minister doesn't necessarily have to know who he's meeting with. I know the minister's a pretty astute fellow, and I suspect that he would know when he's being lobbied and when he's not.

I'd ask the question again. Does the minister spend his time meeting directly with lobbyists?

Hon. B. Penner: I can't walk down the street without somebody stopping me to ask me about something, whether it's about why it's raining so much or why it's not raining more. In fact, I get lobbied on a regular basis by the member's colleagues on a variety of issues pertaining to their constituencies, as I do by all members of this House. I see the member for West Vancouver–Capilano looking at me, who's got a keen interest in steelhead. If you want to portray that as lobbying, you're free to do so.

People stop me wherever I go to ask me about various questions pertaining to the Ministry of Environment and, frankly, all matters pertaining to government generally. That's their right to do so. If a person's doing it in a professional capacity and getting paid to do so, then there are certain provisions of the Lobbyists Registration Act that may well apply.

S. Simpson: I'm sure every member in this House at some time or other talks to this minister, as they talk to many ministers, about issues that affect their constituents or their particular areas of concern. I would expect them to do no different, as I would expect that citizens of British Columbia, who might be afforded the opportunity to run into the minister and bend his ear about an environmental issue, should do that.

As the minister pointed out, I'm more interested in the people who collect a paycheque to do this — not elected representatives, because they have a different responsibility, but people who collect the paycheque to advance positions. I'm interested in knowing whether the minister meets with those folks.

I would assume, and maybe this is an assumption…. I know Mr. Muir a little bit just from his professional work here, and I know he's very skilled and capable at his job. I can't imagine for a minute that he allows people to come in and visit the minister without the minister having a pretty good idea of who he's talking to before they sit down in his office or wherever they meet.

I'll ask again. Of those paid lobbyists…. We'll call them that if that classification will get us to the question. Does the minister meet with those folks?

Hon. B. Penner: The member may be surprised at how little notice I sometimes get about who is walking through my door, because we pretty much have an open-door policy. People come in on a regular basis. Members of the Legislature did that yesterday. I had a few people drop in unannounced — late into the evening, in fact.

If the member is driving at what's in my schedule and who I'm meeting with, he's more than welcome to make an application for my calendar. I suspect his staff have already done so. I know they did last year.

We'll move back a little bit here to estimates in the estimates book. When I look in the estimates book…. I'm looking on page 99, the operating expenses by core businesses — "Environmental stewardship." It shows there a slight reduction in appropriations for conservation management, down from $28.004 million or whatever to $27.5 million or so.

Could the minister tell us how that will affect that particular area, allowing for inflation and presumably allowing for some allocation for salary increases and such that the recent public sector pay increases would have affected that way?

Hon. B. Penner: What looks like a 1.4-percent reduction really isn't. In fact, it's incorporated under a new title called "Parks management." You'll find that column in the documents. In fact, there is simply an internal transfer in terms of reporting where that money is being spent.

S. Simpson: Maybe just to clarify that, are there specific activities that would have previously been under conservation management that have now been moved to parks management? And if so, what are they?

Hon. B. Penner: The member will recall from our debate last year that he was asking lots of questions about what the total amount of money spent on parks was, because there was not a separate heading on that. That was inclusively under the topic of, I think, conservation management. So this year we've broken that out separately, and that accounts for the change.

S. Simpson: Then the environmental stewardship category, which has a total increase…. I think it's $5.6 million — roughly $5.5 million, something like that — for that total category of environmental stewardship. It goes from $73.2 million to $78.8 million. That's the number I see under the Vote 29.

Could the minister then tell us…? I'm assuming that parts of that $5 million…. That's the $4 million for park upgrades that get talked about in the budget and fiscal plan. Then the other million and a half — is that just inflation increases, or what would that be?

Hon. B. Penner: Just to clarify the comment made by the member, you suggested or assumed that maybe this was the money for park upgrades or fix-ups. I think that was the terminology. In fact, this is money on the operating side. It is different than the capital side, although it does include, I think, a certain amount of money for increased amortization costs because of the extra capital dollars that have been invested in B.C. Parks.

There's $750,000 for negotiated salary increases. That's part of the contract settlement last year as a result of discussions between the government and the B.C. Government Employees Union, and then there are a variety of other items. Also, we've established a new executive director position for B.C. Parks, so that's a new position that has to be funded.

S. Simpson: Then if we look at the parks management number, the $31 million up to the $36.9 million number under that category, what is that increase? If that's not the dollars for park upgrades, what is that money being spent on?

Hon. B. Penner: They're really the same numbers. Two questions ago the member was asking about the change between totals — $73.2 million to $78.87 million. The majority of that change, as I think that the member was referring to, is from the changes in the parks budget and the increases there — which, as I mentioned, are related to a number of items: salary increases as a result of the collective agreement and a new executive director position.

We will be adding, I believe, five new FTEs for park ranger positions. There are additional costs coming from inflation related to the park facility operator contracts, and then there are a number of other items.

I think that the member was just out of the House when I was mentioning this, but $59,000 is from revenue generated from trees cut in provincial parks, which gets reinvested in parks as pursuant to government policy, but that has to show up here as an allocation that we're permitted to spend.

S. Simpson: Maybe if I get these figured out in this one category, I'll have them figured out for the other categories.

The wage package increase from the public sector agreement is absorbed, presumably, in all of these categories down here. For example, under "Fish and wildlife management," that category shows $14 million and change. It roughly is staying very close to the same number. It's about $150,000 difference in terms of spending last year and for this upcoming year in fish and wildlife management.

Maybe, then, the minister could tell us: does that mean there are some things, if we allow for inflation and the pay raise, that aren't going to occur in fish and wildlife management now? Because that would be a reduction in many ways in terms of dollars for service delivery. Or have activities there been moved off to somewhere else, like parks management, as well?

Hon. B. Penner: In absolute terms, the impact of the wage increases that were negotiated with the BCGEU appear bigger as they apply to the parks division because the parks division is bigger in terms of the total number of people. But there would be a similar percentage increase in wages for the people working in the fish and wildlife division.

S. Simpson: My question is this, then: not knowing what that does to the number, are there changes in terms of resources available or services delivered in the fish and wildlife management category? It would appear to me that if we allow a number for that pay

raise — we allow for inflation — probably in real dollars there's less spending going into that category in the coming year than in the last year.

I certainly stand to be corrected if I'm wrong, but it would appear that way to me, because the increase is pretty nominal there. Is that the case? If so, what might those services be that are going to be reduced or streamlined or changed in some way?

Hon. B. Penner: We don't have all the information here. It's just been requested. We're seeking the exact number of FTEs, for example, in the fish and wildlife division. I'm told there's nothing untoward. This is an amount of money that was deemed appropriate to cover the wage increases, and perhaps other things as well.

S. Simpson: Well, maybe we'll come back to those numbers after staff are able to get them.

Moving to the water stewardship category in the vote appropriation. I know the water rental remissions, and if I remember this from previous times, this is somewhat of a bookkeeping exercise for money going back to Hydro, I believe. Maybe the minister could just clarify the $10 million in that category and where it goes.

Hon. B. Penner: Let me make a brave initial effort before somebody who's more knowledgable about this enters the chamber to assist.

The member is correct. There's a $9.6 million budget increase for water rental remissions. These are associated with the completion of a number of water use plans that were undertaken by B.C. Hydro, British Columbia's premier electrical utility.

The member is undoubtedly familiar with the water use planning process. It involves a number of stakeholders, from communities to people representing a variety of interests, including B.C. Hydro itself, that look at how they can change the operation of B.C. Hydro's 27 or so hydroelectric facilities to try to maximize social as well as economic benefits, and to strike that balance.

As a result of the completion of a number of water use plans, the water rental remissions are ramping up over the next number of years. That accounts for the $9.6 million increase that's in the budget for water rental remissions.

S. Simpson: We'll pursue this a little bit because I understand that there are some staff coming who can help us with this.

The water rental remissions. Where do those dollars come from, and where do those dollars go?

Hon. B. Penner: Water rental remissions represent the reduction in the value of energy that will be produced as a result of the completion of the water use plans.

I've just counted on my little cheat sheet that I carry around with me from time to time. If you don't have one, I recommend it. It's courtesy of B.C. Hydro. All members of the House should carry one of these with them at all times. It's got some important facts and figures, including how to convert megawatts to gigawatt hours, something I was doing yesterday.

For today's purpose, it's interesting to look at. They list about 30 hydroelectric projects that are owned and operated by B.C. Hydro. Some of those are small ones. There are a total of 23 water use plans either completed or underway. The difference between the total number of B.C. Hydro hydroelectric facilities and the 23 plans is that some of the plans incorporate more than one particular facility. For example, I believe that the Columbia water use plan includes, if I'm not mistaken, Mica, Revelstoke and the Keenleyside Dam. That one is a three-for-one effort.

The water use planning process was initiated in 1998. It's been ongoing for a significant period of time, but we made quite a bit of progress over the last year with the completion of a number of the significant plans coming into effect. In most cases the result of the implementation of the plan is a reduced amount of electricity being produced because of an agreement that more water will be spilled at certain times of the year. But in certain situations for some of the facilities, the completion of the plans has actually resulted in agreement that more energy can be produced overall on a net basis in a given year for a particular facility.

Overall, the plans are resulting in some additional constraints being placed on B.C. Hydro, and the water rental remission amount that's in the budget reflects the value of that decreased output of electricity.

S. Simpson: This is an adjustment, then. This means that we're adjusting the return on the water licences because of the reduction in power that is being produced in the case of energy. So there is a return from water licences. Five, ten, however many dollars a megawatt — and we can talk about that — comes back through the water licences. So this is an adjustment on that because there's been a reduction in the amount of energy. Would that be correct?

Hon. B. Penner: I think I understood the member's question. My understanding is that B.C. Hydro pays water rentals to the province for water that is either stored or water, in addition to that…. There's a storage fee, plus they pay for water that they use to spin a turbine.

If the water is spilled, that does not attract the same water rentals as if the water is first placed through a turbine. So as B.C. Hydro's operations are constrained by the completion of water use plans — if that's the net effect, and I believe it is overall, with some exceptions — then on that front, they're paying slightly less in terms of water rental remissions to the province, because they're putting less through their turbines instead of putting more over the top through the spillways.

However, the economic loss to B.C. Hydro is much more significant than the little bit of money they're saving in the water rentals because of the economic value that that water would have otherwise generated by spinning a turbine and generating electricity. So the water rental remissions are geared towards compensating B.C. Hydro for that forgone revenue that is resulting from the completion of the water use plans.

S. Simpson: I appreciate the answer. Maybe just to speculate a little bit forward…. Maybe the minister could clarify for me whether there would be impacts around some of the private power projects now, the run-of-the-river projects, where there are water licences and fees being paid.

Is there the potential around those run-of-the-river projects that there will be land use or water use plans in communities where run of the river may be private operators? Should that happen, are we going to see a program of remissions back to private operators when the public wants to make use of its rivers that may have been used for run of the river?

Hon. B. Penner: I certainly don't envision that. What you need to remember is that most of the water licences held by B.C. Hydro are very old and did not, at the time when they were first granted, take into account some of the things that we think about today in terms of multiple use or impact on fisheries.

That's what prompted the previous government in the late 1990s to embark on the water use planning process to see if there was another lens they should put on these water licences that had been granted, in effect, in perpetuity to B.C. Hydro.

The member should be aware that in about 2003 our government amended the Water Act so that water licences are no longer offered in perpetuity but, rather, have a maximum 40-year term when they're granted for power production purposes. So that's a significant change. Therefore, there is a sunset provision in water licences.

In addition, the water licensing process today does take into account all of the things that are currently being considered by B.C. Hydro and the water use planning process — that is to say, demand for multiple uses on watercourses.

S. Simpson: In terms, though, of the water licences…. I know that this may fall under Energy, but I'm not sure of that. In terms of the run-of-the-river projects, the dollars that come off of that or responsibility related to that for other multiple uses, is there in these agreements…? We don't know what the agreements say. Is there something where there would need to be compensation back for environmental or recreational use of some of those waterways — multiple use, as the minister spoke about? The potential around areas that are run of the river today, where the minister's folks come in and look at other uses or there are land use decisions… Are we going to be looking at some compensation from that related to Environment Ministry activity?

Hon. B. Penner: The first water licences for IPPs were granted in the early 1990s. At that time those licences tended to be in perpetuity because of the way the Water Act was written. We've changed that so now there's a maximum 40-year term for water licences granted for power production purposes.

In addition, we have become more stringent about what kinds of conditions are attached to those water licences, and I will give you a specific example. I'm advised that when a water licence was granted for one of the earlier independent power projects in the early '90s, there was no minimum flow requirement.

Today that is an obligation, I believe — and the comptroller of water rights will correct me here in a moment and pull on my sleeve if I'm wrong — and my understanding is that there is always now a requirement for some minimum flow in the stream when water licences are granted for power production purposes, particularly if there is a biological need for that, which is demonstrated by the science.

We believe that the water licences do have provisions in them that are akin to what B.C. Hydro is now working towards through their water use planning process.

S. Simpson: Who governs that? My understanding is — and certainly I can be corrected here — that I have an IPP. I want to get a water licence. I go through the B.C. Utilities Commission. I make my application. There's an environmental assessment — all of those happen — and I get my water licence to do this. Who then governs the licence at that point to make sure those kinds of things we're talking about — that environmental issues are dealt with, changes in land use issues and those kinds of things…? Who governs all of that? Is it this ministry or somebody else?

Hon. B. Penner: The water licence is granted by the Ministry of Environment, if in fact it is granted.

I should introduce the person who is assisting me now. Seated to my left and your right, none other than Jim Mattison, the comptroller of water rights and assistant deputy minister for the water stewardship division.

S. Simpson: Just one last question in relation to this. The water licence agreements that are provided by the Ministry of Environment. Are those public documents? Are those documents available, and can we get copies of the terms and agreements of those water licences?

Hon. B. Penner: I am advised that if the member points his browser towards the Ministry of Environment website, water stewardship division, he should be able to access the actual water licences that have been granted.

Speaking of websites, I know the Ministry of Energy, Mines and Petroleum Resources estimates debate is taking place right now, so I don't want to tread on his turf too much…. But I think that if the member were to continue his Internet browsing, he would find that if he went to the B.C. Hydro website, he would be

able to find the standard form contract that was offered to independent power producers last year.

A brief perusal of that standard contract will show that bidders bear the risk, the requirement and the legal obligation to comply with any current and future regulatory requirements in the province.

S. Simpson: I just have one last question in this area, I think. So those water licences that would be available on the website are complete in terms of total terms and conditions related to those agreements around the water licence? They're complete. They're not agreements. All of the material is there. Or is there other material or information related to those licence agreements that's not provided on the website? Just a clarification.

Hon. B. Penner: I'm advised that the water stewardship division does their very best to keep the website up to date in terms of water licences, and that information is available then through the ministry website. In addition, there may be times — especially for the older licences that were granted, particularly to B.C. Hydro — when the comptroller of water rights needs to make a specific order allowing certain work to take place or inspections to happen with some of the facilities, and those orders would also be posted on the ministry website.

In terms of documentation or reports that were prepared prior to the issuance of any given website that has actually been granted, those documents would be available subject to the freedom-of-information and privacy legislation.

N. Simons: Madam Chair, I just want to take this opportunity to acknowledge that we have…. Oh, may I seek leave to make an introduction, first of all?

N. Simons: I like the formalities — yet another example of how parliamentary procedure works. I had to ask permission to introduce you, up there in the balcony.

The classes from Chatelech high school in Sechelt, the grade 9s, are here — well, it's just half the class; I think it's just the boys from the class — to learn a bit about parliamentary procedures. I want to ask if the House could please give them a warm welcome.

S. Simpson: If it's just the boys up there, it must mean that the girls were smarter than the boys and found some place else to spend their time.

S. Simpson: Hon. Chair, I think that qualifies, certainly for the moment, around this, my last question on water stewardship, though I do have a couple of questions related to oceans and marine fisheries. I don't know whether that changes the folks. This might be an easy question. We'll find out.

In the budget and the resources under "Oceans and marine fisheries," do any of those resources or dollars go to the work of the provincial government related to offshore oil and gas?

Hon. B. Penner: I'm just waiting for my assistant deputy minister responsible for ocean stewardship to join us. I'm sure he'll be here shortly to assist in answering the questions.

If I understand the member's question correctly, it had to do with offshore oil and gas research. The ministry and that division of the ministry are responsible for sustainable and integrated management and use of B.C.'s marine fisheries and ocean resources; creating collaborative provincial-federal resource management strategies; supporting seafood traceability and certification programs; and marketing the sustainability and quality of B.C.'s seafood industry in a global marketplace.

Just anticipating a future question from the member around the impact of the negotiated salary increases on the budget for this particular division, I see in the notes here that there's $20,000 projected for negotiated salary increases, offset by adjustments to overhead charges for one new FTE, systems and building occupancy. Maybe I'll say a bit more in just a moment.

Let me first of all introduce to you none other than Bud Graham, Assistant Deputy Minister for the oceans and marine fisheries division of the Ministry of Environment.

S. Simpson: We'll come back, and I'll just kind of re-ask the question. The minister will have an opportunity to consult with his staff, and we'll go at this again.

My question is: is it under oceans and marine fisheries? Does the Ministry of Environment allocate any of those resources to work of the government related to offshore oil and gas?

S. Simpson: So just to clarify then: that's not just in this category, but the Ministry of Environment has no resources allocated to environmental impacts of offshore oil and gas?

Hon. B. Penner: I think, as the member knows, my colleague the Minister of Energy, Mines and Petroleum Resources has lead responsibility for the file that the member is alluding to. However, if a specific project or proposal were to come forward, I assume that it would be subject to a review by the environmental assessment office, which does report in through the Ministry of Environment.

S. Simpson: I asked the question because I had the opportunity to sit in on the Minister of Energy's estimates yesterday when there was some back-and-forth on the question of offshore. The discussion was around — and the Minister of Energy was talking about — the

importance of the economic opportunity of offshore and his particular enthusiasm for opening the door to be able to look at that, lift the moratorium and consider offshore.

To be fair to the minister, he didn't talk about running off and developing, but he certainly talked about lifting the moratorium and beginning to look earnestly at that. In the back-and-forth in that discussion, there was talk about Alaska, because we know that there's significant offshore activity related to Alaska and to challenges that Alaska has faced — environmental challenges.

We know that the government certainly has given every indication of its interest in being able to explore offshore. Is the ministry then not doing any research to look at what those impacts might be — what they've been in Alaska, what they've been elsewhere, what kinds of challenges we might face here — even just as a preliminary piece of work for the ongoing discussions around the moratorium?

Hon. B. Penner: It's my understanding that a considerable amount of work has been done over the years, including by the previous government, looking at the potential benefits and challenges associated with offshore oil and gas exploration, and some of that work certainly had an environmental component to it.

The bill may or may not have been picked up by the Ministry of Environment of the day. I don't know that. I can't speak to what happened when previous ministers were around, but I can tell you that for this ministry budget that we're debating today, we're not anticipating picking up the bill for any of that work. The Ministry of Energy and Mines, if they want to pursue that work, will be paying for the research that's being done for this fiscal year, in any event.

S. Simpson: I appreciate that answer, and maybe the minister could clarify. I accept that the Ministry of Energy would have the line item responsibility if they were to decide to pay that bill or to do that exploration. The question I'd have for the minister is: is it possible, or would it be a practice that the budget item might be picked up by the Ministry of Energy but the work might be done by Environment and paid for by Energy because you have the expertise?

Hon. B. Penner: In theory, that kind of an accounting practice is possible, I'm told. We have not received any request for that kind of funding at this time, but I do note that reports have been done in the past that are available at the library here just out the doorway. Just what the funding mechanism was for that work, I don't know. I can't speak to that, but there are a number of individuals and experts, I'm sure, that have contributed to that work that's been done already.

S. Simpson: The last question, just to finalize this: so it is not the intention of the Ministry of Environment to do any work or invest any resources in matters related to offshore oil and gas in the coming year?

Hon. B. Penner: A significant amount of research and study has been done already, as I've alluded to, and the results of that are available just down the hall in the Legislative Library. We will, in the upcoming year, work on issues pertaining to, for example, marine protected areas. Might that conceivably have some interrelationship to proposals for exploration? The answer is yes, but at this point we're not anticipating any direct request or ask for funding for additional research specifically towards particular proposals for offshore oil and gas exploration.

S. Simpson: Part of the reason I ask these questions is because I go to the government's energy plan released earlier this year, and when I look at the energy plan, it talks about policy action and about offshore oil and gas development. It talks very clearly about participating in marine and environmental planning to effectively manage marine areas and offshore oil and gas basins. It talks about: "Government will work with coastal communities, first nations, the federal government, environmental organizations and others to ascertain the benefits and address the concerns associated with offshore oil and gas development."

I fully appreciate the role of the Ministry of Energy as the promoter of offshore oil and gas and as an advocate for opening the doors to allow that to occur. My perspective, I think, had been that the Ministry of Environment would be a bit of a counter to that to make sure it was the steward of the environment there. This plan suggests that it was an important enough issue that it got a section of its own, almost, in the energy plan and was going forward.

The question I have is: is it not the plan that the Ministry of Environment will be an active player in the work that's identified in the energy plan?

Hon. B. Penner: Perhaps I was somewhat confused by the member's less than precise question. I thought he was asking me whether we have plans to fund specific research or studies into offshore oil and gas out of the Ministry of Environment's budget for this fiscal year. The answer to that question is no.

Do we have Ministry of Environment personnel who occasionally receive phone calls or make phone calls to people working in other ministries? The answer is yes. If we receive requests for information from people working in the Ministry of Energy, Mines and Petroleum Resources, I expect we will speak to these people throughout the course of this year and ongoing years. As the member will be aware, this is an energy plan not just for this year, but it presumably will be in place for years to come.

S. Simpson: We're there now, so I'll just follow this up a little bit, and maybe we'll get it out of the way. Is there a senior staff at a cross-government senior staff committee — deputies, ADMs, whoever that would be — dealing with this issue? And does the Ministry of Environment have representatives on a committee like that? Does one exist? Do you have people on that committee?

Hon. B. Penner: If the member has specific questions around the energy plan, he can pursue those with the Minister of Energy, who is currently debating his budget estimates just down the hallway. There is an oceans committee that is cross-ministry, and it is chaired by none other than my assistant deputy minister seated on my left and your right.

S. Simpson: I'm not so much interested in questions specific to this. What I am interested in is what the role of the Ministry of Environment is in any of those cross-ministerial committees. As the minister says, Mr. Graham chairs a cross-ministerial committee related to oceans issues. Does that committee deal with offshore oil and gas issues?

Hon. B. Penner: The oceans committee is certainly aware that there is the potential for offshore oil and gas exploration and perhaps development at some date in the future for British Columbia. The ministry would obviously participate in any specific proposals and provide advice and perspective from an environmental perspective. As well, as I've already mentioned, any proposal would have to, first of all, go through an environmental assessment office review. At least, that would be my expectation.

S. Simpson: Because I don't totally understand the committee process here, maybe the minister can help me with this. Considering that it is a senior official from Environment who chairs that committee, does that then suggest that…?

There must be ministries that have particular lead responsibilities when these interministerial committees are set up. Does that then mean that it does fall under this ministry to be the lead ministry on this issue, and that that's why Mr. Graham would chair? Other ministries would bring their officials to the table, but it would be driven by this ministry. Would that be accurate?

Hon. B. Penner: It won't be the Ministry of Environment, I wouldn't expect, that would be leading proposals for oil and gas development, whether it's onshore or offshore. But the oceans committee is there to provide a cross-government perspective on a range of activities or proposals related to the ocean environment. Of key concern to us at the moment, and something that's a very active file, is the work we're doing on marine protected areas.

S. Simpson: I understand that there will be many other committees that will deal with these issues. We'll talk about those in the appropriate place at the appropriate time, but it appears to me from what the minister said that the oceans committee certainly does have a significant interest or a responsibility related to the environmental aspects of these considerations.

Maybe the minister could tell me: has the oceans committee produced any reports or provided for documents or contracted for documents that deal with questions related to the environment or to the work of the oceans committee and offshore oil and gas?

Hon. B. Penner: I think a number of studies have been funded by the previous government as well as, I think, the current government related to offshore oil and gas potential and challenges. As I've indicated, those reports are available through the Legislative Library just down the hall.

The Ministry of Environment is not funding in this fiscal year — or at least we certainly don't expect to — any studies related to offshore oil and gas development. That said, if a specific proposal comes forward, it would be subject to an environmental assessment office review.

S. Simpson: Maybe I'll just deal with a couple of questions here. I don't want to go very far into this, but I have a couple of questions that also relate to oceans and marine fisheries. We know that the whole question of aquaculture rests with the Minister of Ag and Lands, and he's over there, proud to make sure I don't forget that. Believe me, I don't forget that. The wild fishery or issues related to the wild fishery rest with the Ministry of Environment, I believe.

Could the minister tell us what role the Ministry of Environment — just for the purposes of these estimates — plays in situations like the recent situation that happened with Creative fish, the death of a number of sea lions — 50-odd sea lions? Clearly, the Ministry of Ag and Lands has responsibility for the salmon farm. What's the role of the Ministry of Environment in terms of dealing with that and the impact on wildlife?

Hon. B. Penner: Considering that the species that died was a marine animal, the federal Department of Fisheries and Oceans asserts jurisdiction with respect to that. If DFO were to request us to provide assistance or support, we'd be more than willing to do that.

S. Simpson: Well, we'll talk more about fish farms soon. I want to thank the minister for those questions.

I'm going to now move, just in terms of some of the budget line items, to the issues related to the environmental protection vote. On page 100 of the estimates you see that the appropriation for environmental protection has gone from about $6 million to almost $14 million. Could the minister explain what that extra money is all about?

Hon. B. Penner: The increase is comprised primarily of a $4 million lift to provide for funding for climate change, to support our provincial initiative around reducing greenhouse gas emissions, as well as $3.5 million for the clean air partnerships program.

Anticipating the member's upcoming question, about $405,000 of the increase, on top of the other numbers I've already mentioned, is for negotiated sal-

ary increases. So we've got $4 million for climate change, $3.5 million for clean air partnerships, plus $405,000 for negotiated salary increases as a result of the collective agreement hammered out last year.

S. Simpson: I actually hadn't planned to ask about that salary increase, but thanks anyways. Could the minister explain what the sustainable environment fund special account…? What is that account, and what's it for?

Hon. B. Penner: I think, in essence, this fund is best known as the repository of revenues generated from the battery levy and what was formerly the tire levy that was imposed at point-of-sale. It was established by the Sustainable Environment Fund Act of 1990 and subsequent amendments to that legislation. Revenues are derived from environmental levies, fees, licences and contributions, and they go into that fund.

Hon. B. Penner: The money in the fund is spent on ministry programs relevant to the environmental protection division.

S. Simpson: The estimate here says, then, that we will have expended $35.7 million in '06-07. We'll expend $29.3 million in '07-08. So in terms of that, could the minister explain why we're seeing what is a pretty significant reduction in the spending there and maybe a little bit of a flavour of the kinds of programs that actually get paid for by that $30-odd million?

Hon. B. Penner: The member is correct to identify that decrease in the amount of money going into the fund. That is attributable to the $6.4 million reduction that is occurring as a result of the tire recycling program being moved out to an industry-led stewardship program that went into effect, I believe, on January 1, 2007.

In terms of what kind of initiatives the revenue that's in the fund helps pay for, it helps pay for programs and operations of the environmental protection division, which includes, but is not limited to, monitoring and understanding the receiving environment, education, encouragement of activities to prevent pollution, waste reduction, laboratory services, air and water quality, cleanup of contaminated sites, special waste, transfers to local governments, soil and water remediation projects and a number of other things.

S. Simpson: The dollars that are collected in this fund…. I guess they are collected in the environment fund, and then they are transferred over to this special account and expended on services within that subvote, if I read this correctly. Are all the dollars transferred over, or is there a portion of the money that's collected from these fees and things that goes just straight to general revenue rather than being directly allocated into Ministry of Environment for these services?

Hon. B. Penner: I'm advised that all the waste permitting fees, including the battery recycling fee, go into this fund. It does not get hived off or certain portions going into some other fund.

S. Simpson: One more financial question related to these expenses here. This relates simply to the increase in the EAO office of $1 million and change. They are $1.1 million, I believe, or something slightly more than that. Maybe the minister could just quickly say what that increase is. I mean, I'm assuming it's just some increase in demand on the office. Or what is it?

Hon. B. Penner: The short answer is yes. But since I'm prone to give more than just short answers, I'll continue to elaborate by saying that the budget lift is to help deal with the continuing pressure from an increased number of mining, energy and infrastructure projects entering the environmental assessment process.

If my memory serves me correctly, there was something in the order of 15 or so — maybe 18 — projects in the environmental assessment review process in 2001. Today I think there is something in the order of 50 or more projects that are large enough and significant enough that they require an environmental assessment. So the office has become much busier over the last number of years.

S. Simpson: We're going to get an opportunity a little bit later to talk some more about the environmental assessment office, but we'll do that a little bit later on in the estimates process and deal with that.

The one question I would have then is: in terms of the $1.1 million, maybe the minister could tell us what that does in terms of increased staffing, particularly in terms of officials within who do the assessments or the people who actually are doing environmental assessments. What do we expect to see there in terms of staffing?

Hon. B. Penner: Another introduction is in order. Seated behind me on my right, but your left, is Joan Hesketh, the executive director of the environmental assessment office, who informs me that the budget allows her to increase her FTE count by 11. So it would be 11 additional FTEs for the environmental assessment office for fiscal 2007-2008.

S. Simpson: Maybe the minister could tell us what the duties of those people will be in terms of…. I'm sure some of them are administrative support, but I'm particularly interested in those people who will be doing direct work on assessments and what those positions might be.

Hon. B. Penner: Of the 11 positions, eight will be directly involved in managing or overseeing project reviews. Three are more on the administrative or technical side. Of those three positions, two are technical-administrative in nature — dealing with recordkeeping and information technology — while the third is an administrative assistant position.

S. Simpson: Again, I don't want to get too far into this because we'll talk about it more in relation to environmental assessment and climate change when we get to that area. But I will ask about the positions in one sense. As we have this increased concern about emissions issues…. I'm assuming that as the increased interest of the government in this issue and the increased activity by the government, the environmental assessment office, which I know certainly in some projects pays attention to these matters…. Is it reasonable to assume that issues related to greenhouse gas emissions are going to become a bigger part of environmental assessments?

Hon. B. Penner: Greenhouse gas emissions are and have already been a matter of review by the environmental assessment office. It is one of the things that they look at.

S. Simpson: Part of the reason I'm asking is that I'm looking for whether — in that new complement of staff that the $1.1 million is going to allow the office to hire — in fact we're going to see staff with the particular expertise to be able to deal with those issues.

I'm not sure whether the environmental assessment office is the appropriate place, but I do believe the last time the minister and I had an opportunity to talk about this, I think it might have been in question period…. At that point I don't believe the government actually had a climatologist on staff in the ministry.

I was wondering whether, in those positions that might occur…. I would expect we're going to see that in the staff that were advertised for the other day — for the climate action team staff, I would assume. I'm wondering whether staff with particular skills are being brought into the environmental assessment office to help with those assessments as they relate to emissions.

Hon. B. Penner: The way the EAO office works is they contact different referral agencies or different parts of government for specialized expertise to provide advice and input on specific projects or questions that arise as a result of specific projects.

The Ministry of Environment has already had…. I think it's six FTEs dedicated to the climate change section in the ministry. Those people have a variety of academic backgrounds. I'm not aware of a degree called climatology. We could get into an interesting discussion here about who is and who isn't a climatologist.

There is one person who frequently phones the news media to debunk, he says, the whole theory around climate change. That person professes to be a climatologist, while other people vigorously insist that in fact the person is not. Or if he is, it's only by the fact he has a degree in geography.

I'm not intimately familiar with what the academic institutions grant in terms of all degrees, but I do know there are degrees in meteorology and geography. We have people who are versed in those topics and who carry degrees or have studied in those particular fields, who work for the Ministry of Environment.

S. Simpson: Well, it certainly seems that there are a number of pretty credible people around who would tell you that they are climatologists. I would believe they are. It might be worthwhile for the minister to determine whether any of the six people who work in his ministry would deem themselves to be climatologists and would have the credentials to make that claim.

I'm sure that as qualified professionals and people who are very credible in the work they do, they wouldn't make that claim if they didn't think it was one that they should make. At this point I had been told there were no climatologists working for the government, and nobody had told me any different.

I'm going to move on, actually, from the issues of the estimates directly now and talk a little bit about staffing and then go back and talk about some more administrative things. I think we're going to try to get all of this out of the way today so that tomorrow we can focus our attention on climate change for a good part of the day.

The question I have does relate a little bit to the issue of climate change. When I look at the service plan of the ministry and at the resource summary over the next three years, I see we have a bit of an increase in staffing — 34 or 39 FTEs, I believe, from '06-07 to '07-08. Then the number actually goes down by four for '08-09 and '09-10.

The question I have is: when this number was put in for these three years here, was that prior to there being any consideration around the question of additional resources for climate change? Are we going to see folks like the climate action team…? I had the opportunity to see an advertisement in the newspaper on the weekend, I believe, which had postings for quite a number of positions. We'll talk about what those positions are at another time.

I'm wondering whether the minister could tell us whether this three-year summary was done before there was a consideration of those positions, or if possibly they're not going to be included in the Ministry of Environment's complement.

Hon. B. Penner: The member's correct. The notation in the estimates is for a one-year funding for those four additional FTEs. As the Minister of Finance has indicated, we will be working throughout this year to determine what additional resources may be required to help fund the government's initiative around climate change activities within government, across government and outside of government in order to meet our ambitious greenhouse gas reduction targets that we are committed to.

S. Simpson: Just so the minister knows, I just received a note telling me about the climatology program at Queen's University in the department of geography.

You can get a degree in climatology at Queen's University through the geography department — just in case he was curious.

In terms of staffing — as we look out, the staffing for the next couple of years — is it the expectation, then, that there'll be an adjustment around these numbers? I believe that in the service plan the minister notes that Environment will be the lead ministry, in terms of the ministries, on questions related to climate change, of course. It will come through this ministry. So we can expect an adjustment to the budgets for the coming years to reflect these staff increases that are anticipated — from the $4 million, I guess, to start with?

Hon. B. Penner: I've learned not to prejudge what the Finance Minister and Treasury Board may decide, but I have heard the Finance Minister say that we will be working diligently this year to identify what additional resources and other strategies may be required — whether it's on the tax side or the regulatory side — to help government meet our ambitious greenhouse gas reduction targets that were laid out in the throne speech.

S. Simpson: Well, I'll be looking forward to knowing what those increases are. For the minister's sake, I hope he does get a little bit more money for climate change than he has this year.

I want to talk a little bit about…. Coming back to administrative matters now that we've dealt generally with some of the budget items, in terms of the advertising budget and the money that's spent on advertising by the ministry, does the minister have a total value for advertising budgets for the ministry?

Hon. B. Penner: The amounts that the member has asked about are contained on page 42 of the supplement to the estimates for the Ministry of Environment. That's STOB 67 and STOB 68.

S. Simpson: Could the minister tell us: does the ministry contract consultants and use consultants? If so, how does it award those contracts?

Hon. B. Penner: The ministry does from time to time contract with consultants or experts on particular matters. I believe the figures relevant to that expenditure are listed, again on page 42, under STOB 60.

S. Simpson: Could the minister please tell me how those contracts are tendered? Particularly, I'm interested…. I know that a number of them, I assume, come through B.C. Bid, but I'm interested to know if any of them were untendered or were direct awards.

Hon. B. Penner: My senior executive assures me that the ministry is compliant with all the government guidelines around the awarding of contracts. There may be situations where direct awards are given, and that is provided for in government policy. An example that comes to mind is responding to environmental emergencies, where there isn't time for the normal bidding process.

S. Simpson: Maybe the minister could remind me, because that's not a process I'm totally familiar with. In the case where there are direct awards because of emergencies…. It makes perfect sense that if you need to get a cleanup done right away, you move to do that quickly and can't be going through a bid process when that occurs. Is there a listing of those so that there is a transparency and it's identified that these were done as a direct award for extenuating circumstances that are legitimate?

Hon. B. Penner: If program staff, in whatever division, decide that they need to offer or issue direct-award contracts, those awards or contracts are subsequently reviewed by the financial administration people within the Ministry of Environment, which is separate from the division that may have offered the direct-award contract.

S. Simpson: I appreciate that there's a level of scrutiny there when those are awarded. But in terms of who those contracts are with and the values of those contracts, is that information available?

Hon. B. Penner: All contracts are disclosed in the public accounts, and my understanding is that the next public accounts will be out in the third week of June 2007.

S. Simpson: We'll wait if it's the minister's wish, but I'm curious as to the contracts or the contractor consulting that the ministry does do. I'm wondering if the minister could tell us whether contracts are let around communications and public relations, or is the public affairs bureau essentially used for that activity within the ministry?

Hon. B. Penner: If I heard the member's question correctly, the answer is that the public affairs bureau would be responsible for the tendering of those contracts.

S. Simpson: So that I understand this, then, are those decisions then made by the public affairs bureau? Or would the officials in the ministry decide, "We need to do these contracts," and then they'd be let through public affairs and budgeted over there? Is that where the dollars come from? Is that out of the public affairs share of the budget?

Hon. B. Penner: In the scenario described by the member, the ministry would work with the public affairs bureau. But alas, the funding would come out of the Ministry of Environment budget.

S. Simpson: Whether it be essentially by contribution to the public affairs bureau or by let of those con-

tracts, what is the ministry budget for communications, for public relations in that category?

Hon. B. Penner: By way of clarification, the public affairs bureau staff that perform activities related to coordinating with the Ministry of Environment are actually paid for through a budget appropriation under the Ministry of Finance. That agency helps support other ministries. So the funding for the staff within the public affairs bureau is, again, to clarify, provided by the Ministry of Finance.

If there are specific expenditures around information campaigns on various topics, whether it's related to environmental hazards or spills or things like that, that does get funded out of the Ministry of Environment appropriation, not out of the PAB central allocation. I think that's correct.

S. Simpson: Then maybe the minister could tell us whether in the structuring around PAB as it relates to the Ministry of Environment there is a budget set for the Ministry of Environment within PAB, and you're spending within that budget? Is that an allocation within PAB directed to the Ministry of Environment?

Hon. B. Penner: Details in terms of how the budget for PAB is allocated would have to be directed to the Minister of Finance in the course of her estimates. If you'd like, I can get you the number of people associated with PAB that work on a day-to-day basis on issues related to the Ministry of Environment.

S. Simpson: I'd appreciate that number — the number of PAB officials or functionaries whose responsibilities are primarily MOE responsibilities.

I appreciate that the budget is within Finance, but is there somewhere in here…? Does the Ministry of Environment, when the ministry is doing its budget preparations, deem that there is a number which it believes it requires for the kinds of supports that the public affairs bureau provides and put that number forward to the Minister of Finance as part of, I'm sure, the whole MOE submission to the Minister of Finance when it's coming budget time?

I'm sure the minister puts forward the whole package of what he believes the ministry requires to be able to perform its functions for the coming year. In that package, while it may not show up immediately as a budget line item for the Ministry of Environment, does the minister put forward a number that says, "I need this much public affairs support" — X dollars from PAB or X FTEs or whatever? Does that come from the minister?

Hon. B. Penner: I'm advised that there are nine personnel within the public affairs bureau that work on Ministry of Environment–related issues on a fairly regular basis. In terms of whether I think that number is adequate or not, that's something I could take up directly with the Minister of Finance, who has responsibility for the public affairs bureau generally.

S. Simpson: I'm sure we don't always get what we want. Sometimes we get more.

The question would be this, then: at some point, now that we know there are nine FTEs or something comparable to nine FTEs in the public affairs bureau whose primary responsibility relates to the Ministry of Environment — I believe that's what the minister said — is there somewhere in that budget process…? Does the ministry come and say, "We need this much support," and then, of course, the Minister of Finance deems what's appropriate?

You ask for 12 and you get nine or whatever the number is. That's neither here nor there, but does the Ministry of Environment make an ask, in the budget process, of the Minister of Finance for a complement from PAB? And if so, is there a dollar figure put to that? And what's it worth?

Hon. B. Penner: In the budgeting process for the Ministry of Environment we do not make specific budget submissions pertaining to the public affairs bureau or staffing of the public affairs bureau. That's a matter squarely within the Ministry of Finance.

S. Simpson: Those nine people who work in the public affairs bureau, primarily with the ministry, the minister and the ministry staff on matters related to the ministry — who do they take their direction from in terms of the work they do for the ministry?

If they're Ministry of Finance employees, they work for the Minister of Finance. They clearly have their own infrastructure within PAB, yet we have the Ministry of Environment, with its own infrastructure. So who do those nine people take their direction from when they're doing work for you?

Hon. B. Penner: We are essentially the client, and we seek services and support from the public affairs bureau.

S. Simpson: Well, in most cases if we had a private sector operation and I was off hiring myself a communications consultant, I might accept that, because I'm paying the bill for the communications consultant. Government, I might suggest, is a little bit different, because PAB, we know, is linked to the Minister of Finance and clearly has a link to executive council and to the whole regime of government, which has its own thinkers about what the communication strategies of government should and shouldn't be. I'm a little a hard-pressed to buy that it's your standard client relationship.

The question again is: are the decisions about what PAB does, those PAB folks, made within the ministry — by the deputy, by the minister, by other officials? Or are the strategic decisions made somewhere in PAB for what the people who work for the Minister of Environment do or don't do?

Hon. B. Penner: People that work for the public affairs bureau, like all civil servants, work for the province. It is a key and clear priority for this provincial

government to advance issues around the Ministry of Environment and the environment generally. So I would assume — and so far I've seen clear evidence of it — that the people working for PAB are supportive of the government's intentions around environmental initiatives.

S. Simpson: One of the differences there, it would seem to me…. It's my understanding that the vast majority of the people — the 220 or however many people — who work for PAB are in fact political positions. The vast majority of the people who work for the ministry are there as longer-term civil servants doing the jobs that they do.

There is a difference between those who come to this in a political job and a political role and those who come to it as a civil servant. I do see that as a difference. I see that would be the difference, for example, if the ministry had its communications staff who are longer-term civil servants and who did that work as civil servants. That would make good sense to me.

In the case here, in fact, we're dealing with what are political positions and political jobs, so it is a little bit different. It is the political motivation, I think, that drives much of what the PAB folks choose to do. That's part of the problem, I guess, that I see with this structure.

I'll try one more time. When decisions are being made about communications, public relations, consultation strategies, do the folks who come from PAB take their direction from the deputy or whoever the deputy appoints to provide those directions, or do they take their directions from somebody within PAB?

Hon. B. Penner: The member's question presupposes that there's a difference of opinion. As I indicated earlier, everybody who works for the provincial government works for the provincial government. As much as possible, we try not to balkanize matters.

We're all working for the taxpayers that are paying our bills. If the member is not satisfied with how the public affairs bureau is structured, that is something he's entirely free to take up with the minister who does have responsibility for the public affairs bureau. That's the Minister of Finance.

S. Simpson: I'm sure we'll have the opportunity to take it up with the Minister of Finance sometime in the next couple of weeks, and we will do that.

That's not the point here, though. The point here is that somebody provides direction to these folks. As much as the minister would like to tell us that the government is this big holistic operation, we know that provincial and federal governments, by their nature and size, tend to operate in silos. I know they work very hard with cross-ministerial committees to break those silos down and do the work. That's why there are deputy committees and other committees, and I know there's great effort being made there.

I also know that it's not something that's necessarily the challenge of any given government of any political stripe. It's the nature of these very large organizations that function. So it's a challenge that I have a lot of time for — for how difficult it is to deal with.

As part of that, it seems that ministries tend to function very much in those silos in many ways. We know that by the number of discussions we've had with different ministers who all, of course — and it's politically good — say: "That stuff doesn't come under my auspices. It doesn't come to me. It goes someplace else. Deal with it someplace else."

Fair enough. Fair comment. But it can't be that that's the case and then, on the other hand, that it's one large group hug. Somebody makes those decisions on what those people do who work for public affairs — the political spin doctors who work for this minister and this ministry, the political appointees who handle all the communications for this ministry.

Somebody directs these people. The direction either comes from within PAB, from within that political structure, or the direction comes from within the civil servants operating for the Ministry of Environment. It's one or the other. Who does it?

Hon. B. Penner: The member is clearly not satisfied with how the public affairs bureau operates, and he should take that matter up with the minister responsible.

S. Simpson: Actually, what I'm not satisfied with is the minister's unwillingness or inability to answer questions about his ministry. Clearly, this is a minister who would rather spin rhetoric than answer questions, and I'm sure we will hear much more of it in the coming days as we talk about the matters before us and we begin to read all of that stuff that PAB is writing for the minister. We'll see that all in soon enough. But we'll move on, because we're not going to get answers about communications.

Freedom of information. Could the minister tell us how the ministry tracks freedom-of-information requests?

Hon. B. Penner: The member is correct. There is a director that works in the corporate services division for handling freedom-of-information and privacy issues. That corporate services division provides support to the Minister of Environment, the environmental assessment office, the Ministry of Agriculture and Lands, and the integrated land management bureau.

S. Simpson: Could the minister tell us how many analysts are assigned there? I'm assuming they work across these ministries and agencies. How many analysts are there working for the director?

Hon. B. Penner: We didn't know that specific question was coming, so we don't have the precise number. We're ballparking that including the director, there may be up to ten FTEs working for the various agen-

cies — Ministry of Agriculture and Lands, the environmental assessment office, the integrated land management bureau and the entire Ministry of Environment.

They work under the director, but doing things that include matters as routine as filing. It sounds routine, but it's a big organization. There are people engaged, I'm told, in making sure that our filing practices are up to government standards so that when we need to retrieve information, we can actually find the document.

S. Simpson: Does the minister know: in the last year how many formal FOI requests did the ministry get?

S. Simpson: I believe it's a 30-day deadline to respond to FOI requests. Would the minister know — or could he find out if he doesn't know — currently how many FOI requests are over the 30 days?

Hon. B. Penner: We don't have those numbers with us, but we're endeavouring to track them down. Hopefully, they were filed appropriately.

S. Simpson: Well, I'll just throw my last question in there, in relation to FOIs, so that you can get the rest of the information. I would be interested in knowing what the total amount of fees levied by the ministry for FOI requests was in the past year. If we can add that to the other two questions for getting information back, that would be helpful.

This is an area where I'm not sure that the ministry has any direct involvement, but I'd be interested to know. Is the Ministry of Environment engaged in any way with Partnerships B.C.?

Hon. B. Penner: I'm sure the member knows that the B.C. government has enunciated a policy that for projects greater in value than $20 million requiring provincial contributions, we will require local communities, for example, to put such a project through a lens to see if it would make sense to proceed in a public-private partnership.

Partnerships B.C. is conducting that work on behalf of the government of British Columbia. The Ministry of Environment may play a supporting role in helping explain to either local governments or Partnerships B.C. what the regulatory process would be for a particular project.

The one, of course, that comes to mind is the CRD sewage initiative. I guess it was last July that I signed a letter requiring the capital regional district to move towards sewage treatment for the Greater Victoria area because of the cost of that initiative. It somewhat exceeds, I would expect, the $20 million threshold. So Partnerships B.C. will be taking a look at that project to see if it makes sense to proceed in some form of a public-private partnership.

My understanding is that the CRD staff have been meeting with Partnerships B.C. staff in relation to that, and there have been conversations with Ministry of Environment staff to help explain the regulatory process.

S. Simpson: Are there other projects that are being directed or led by the Ministry of Environment, in terms of government, that Partnerships B.C. is engaged in, in addition to the CRD?

Hon. B. Penner: I'm not aware of any others at the moment. One completed project, though, that did go through Partnerships B.C. and that the Ministry of Environment had a keen interest in was the Britannia mines remediation project. That's an award-winning project that, now that it's in operation, helps divert 450 kilograms per day of toxic copper sulphate which previously had been flowing unchecked into Howe Sound, causing untold environmental damage to those marine waters.

I'm very proud of the fact that our government has dealt with that issue. By pursuing a P3 approach, we were able to extract additional value, protect taxpayers from potential cost overruns and get that project built on time and on budget. And today, as I've said, 450 kilograms per day of toxic copper sulphate are no longer going into Howe Sound. That's a real win-win for everyone.

S. Simpson: Maybe the minister can explain this to me about Partnerships B.C., particularly the CRD project, because that's obviously a very, very large project, and it's the one that's in the forefront right now. In a project like the CRD project, how does Partnerships B.C. get paid? Is it through the ministry, or is it through some other source?

Hon. B. Penner: Just to make it clear, the specific proposal that the member refers to is actually coming from the local government — or will soon, I hope. They have a requirement to have a plan to me by the end of June, so they would be bringing forward a proposal.

In terms of just exactly how Partnerships B.C. operates and who they collect revenue from, that would be a question better directed to the minister responsible for Partnerships B.C., who I believe is the Minister of Finance. The Ministry of Environment is not the funding agency for the CRD sewage project. We are the regulator.

S. Simpson: I do believe it was the minister who made the announcement. Possibly, it's just that the minister made the announcement but isn't responsible to pay the bill. I understand that, but the minister has just told me about how government all works together and how everybody's on the same team.

The minister did announce, I believe, that the government had committed to a third — providing it was a plan that was acceptable to the government — of the cost of this, or up to a certain number. Who knows what that number will be?

It is the government that has required the CRD to use the Partnerships B.C. model or to bring them into

play in this to do an assessment, because of the value of this. When somebody has to pay Partnerships B.C. in the case of the CRD project, will the payment be made by the CRD or through the Ministry of Environment as the lead ministry for the government or by the Ministry of Finance?

At some point we must know who actually pays Partnerships B.C.'s fee for this. Does it come through the lead ministry? Or does it come through the CRD? Or is it up through the Ministry of Finance?

Hon. B. Penner: Again, just to confirm. We are not the funding ministry; we are the regulator. Questions pertaining to the operation of Partnerships B.C. would be better directed to the minister responsible for Partnerships B.C., the Minister of Finance.

S. Simpson: A couple more questions. We'll get to ask those questions of the minister somewhere down the road.

I'm curious as to whether, within the ministry's operations, there have been in the past year audits done of any of the ministry's programs or agencies or activities.

Hon. B. Penner: The only review that I'm somewhat familiar with, and there may have been others, pertains to the conservation corps program, which was a new initiative of this government launched in the spring of 2005. I made some comments about that in my opening remarks at the start of the estimates. Approximately 150 young people and recent graduates participate in planning and implementation of programs or initiatives related to the environment.

When that was announced in 2005, it was stated as a three-year commitment, $9 million over three years, which did beg the question — I certainly got it out in the field from students who are participating in the program: what happens after the three years? The answer is that government wanted to review that program to make sure it was performing as hoped and was delivering the kind of results we're looking for.

So a review was done — an internal review but outside of the division that was operating the program or had interaction with the program. The review was completed, and the advice back was that the program is, in fact, a success. It is accomplishing what we had hoped it would.

As a result of that, not only are we funding it for this year, but if you take a look in our service plan, you'll see that there's a notation or an allocation made in anticipation of funding in future years for that program.

S. Simpson: That said, I'll take a nod here. That's the only audit, of any nature, of that from government — of the programs or activities of the ministry — that has been done in the last year?

Hon. B. Penner: I understand from the discussion around me that there may have been others, but I'm not intimately familiar with those.

S. Simpson: I appreciate the minister doesn't have that information in front of him right at the moment. I would be interested in getting a list of any of those audits that have been performed within areas of the ministry. I'm particularly interested, of course, in what they were. I'm interested in what the reason for the audits were, if they were conducted, and then of course any recommendations that were recommended and whether those recommendations were fulfilled.

I'm interested in that information. Will the minister be able to make that available?

Hon. B. Penner: I am aware of one particular audit, which I've just been advised about, to do with water rentals and remissions — to make sure that that was being handled appropriately. Apparently, the conclusion was that it is. We will do some work within the ministry to gather up whatever information is out there related to the member's request around audits and put that through an FOI screen to make sure that it's appropriate to disclose.

S. Simpson: I'm going to ask a few questions around some capital issues, capital expenditures. Hopefully, that will take us close to the end of the day, and then we can have fun on climate change tomorrow.

In terms of capital expenditures for the ministry, when I go to the resource summary in the service plan, I notice it talks about, for example, in environmental stewardship, what was a pretty significant expenditure in '06-07 — something in excess of $43 million.

It then goes down to $29 million and drops again by about half to $14.5 million or so in environmental stewardship. Could the minister tell us what that spending was and what the expectations are around capital spending and environmental stewardship?

Hon. B. Penner: I'm advised that the majority of the reduction is attributable to reduced requirements for compensating for land tenures. We had those obligations last year as a result of the LRMP process for the mid-coast and north coast and the establishment of conservancies.

The other reason for the reduction in capital requirements is good news. It's that we're nearing completion of the Myra trestle replacement. You'll remember that those trestles were heavily damaged or destroyed, in some cases, as a result of the Okanagan wildfire in the summer of 2003. The good news, I'm told, is that work is just about complete. As a result, the spending there is ramping down.

S. Simpson: Just to be clear, then, I'm to understand that the larger numbers — particularly the '06-07 number — were primarily around the expenditures for the trestles — those two big numbers. And then am I to assume from that that when we end up back down around the $14.5 million range, in there somewhere, that that's pretty standard kind of spending for the

ministry in terms of overall capital related to ministry activities? That's a pretty standard par-for-the-course number, whereas the others had particular areas of interest?

S. Simpson: Just to give me a sense of what kind of things the environmental stewardship spends $14.5 million on as regular capital spending, what does the ministry spend that on, on an annual basis? What kinds of things fall into that category?

Hon. B. Penner: It's my pleasure and opportunity, now, to introduce yet another individual who's joining us here in the Legislature. I've been joined by my assistant deputy minister for environmental stewardship, Nancy Wilkin. She's seated to my left and to your right, of course.

The member asked a question which is an important one. Where does that money go for capital expenditures within the Ministry of Environment, particularly environmental stewardship? I'd have to confess that much of it is not particularly glamorous or sexy, perhaps not as intriguing to members of the public as the Myra trestles project, but nevertheless important.

This year, for example, we'll be funding upgrades to campgrounds; restoring water systems to make sure that they're safe; looking after sewage treatment, in some cases within provincial parks; fixing picnic tabletops; and replacing or repairing bathroom and shower facilities.

So this is work that's ongoing. It's never quite complete because, of course, things age over time or things get damaged. It is not necessarily the most glamorous money that government spends, but I think it's very important, and it's money well spent.

S. Simpson: So can I assume there, if I look into the budget and fiscal plan under the environmental leadership on page 34…? It then lists the areas where I believe the government's going to spend about $14 million to $15 million this year on park upgrades, air action, climate change, green vehicle fleet, etc.

It lists a number there of $4 million for park upgrades. Would that number be part of that environmental stewardship number?

Hon. B. Penner: Regrettably, we don't seem to have the publication that the member opposite has. So we're just surmising that what he may be referring to is actually a $4 million lift in the operating budget for B.C. Parks, as opposed to capital. Perhaps the Transportation critic can assist the member in determining the difference between operating and capital.

We're projecting at this point about a total of $14.9 million in capital expenditures related to parks, including land improvements. Those are improvements to the kinds of things I was talking about earlier: picnic tables, bathroom facilities, campgrounds, water, sewer, as well as land acquisition.

Every year the Ministry of Environment, and B.C. Parks in particular, looks for opportunities to acquire additional lands that may previously have been privately held, if they meet our criteria for adding to our B.C. Parks system.

S. Simpson: I'm not sure that the Transportation critic should be given the credit about operating and capital, but he's already discussed that with his minister.

When it talks about the park upgrades, it talks about…. At this point it's $15 million for park upgrades over three years. It says: "Including expansion of recreation opportunities in selected parks, updating water systems, campground trails and day use amenities in the most well-used parks in B.C." That's what it's talking about, and that's the $4 million there.

S. Simpson: Well, it talks about $15 million over three years; $4 million, $5 million and $6 million over the next three years. It's part of the $103 million of additional environmental initiatives that are identified in the fiscal plan. But I was just looking to determine whether, in fact, that would have fallen within that number of the $14-odd million dollars.

Just a couple of more questions in relation to the capital expenditures, and we'll talk about these park numbers at another time. In the compliance area, again, we see dramatic drops in capital expenditures. What are we spending on in the compliance area?

Hon. B. Penner: Just to go back…. At the risk of confusing things further, maybe both critics were correct.

The numbers that the member for Vancouver-Hastings was referring to talked about a $4 million lift in our operating budget for parks — a little bit more than that. A small portion of that is for paying for the increased amortization to cover the increased capital expenditures. As a result of capital expenditures in ongoing years, there's an increased amortization charge that comes against the operating budget, if I understand my accounting lesson here correctly.

Switching gears, then, to the member's most recent question. Last year the conservation officers went shopping for new replacement vehicles for performing their work, and that accounted for the increase in capital expenditures under the compliance division last year. I'm told that much of their vehicular equipment was updated, and hopefully it will serve for a number of years to come.

S. Simpson: I have one more question in relation to capital expenditures. We may actually get the first two questions in on climate change here before we hit the quitting time, but you never know.

In terms of, again, just a sense of what the expenditures for capital around executive and support services are — is that equipment and that? What are you spending there? Again, it's another area where there are pretty significant reductions anticipated over the next couple of years.

Maybe I'll relate the question to this as well. Is there any expectation that there will be, with the anticipated climate change action team plans that are coming — the new staff complement that was advertised in the newspaper this weekend…? Can we anticipate that we'll see some increase in capital costs to outfit this operation as well?

Hon. B. Penner: I'm told that a small portion of the decrease in capital requirements had to do with not as many requirements for new computer systems as the year previous. Hopefully, we've purchased some software and some computers that will work for a little while, and we won't have to constantly replace them.

As well, outside of the conservation officer service, the ministry was engaged in acquiring some additional vehicles last year. We're anticipating not as much requirement to do that this year. Again, hopefully, those vehicles will work for a while.

S. Simpson: I am going to ask a staffing-related question. It relates to climate change. That's where we will be going tomorrow for a good part of the day.

The positions that were listed in the advertisements in the newspaper over the weekend…. There was a whole series of positions referenced, from an executive director to a number of directors and others. Is there a list available of those positions and job descriptions and pay rates for those positions?

Hon. B. Penner: Just to go back to where we were a while ago — another opportunity for the member to point his web browser in another direction — I'm advised that the job descriptions and all the specific job openings are available on the B.C. Public Service Agency website. The information is available there.

I invite anybody who is tuning into this scintillating debate to peruse all the job opportunities that may be available within the B.C. public service. We think that working for the province of British Columbia is a great thing to do. There are great opportunities here in B.C., so click on your computer and go to the B.C. Public Service Agency website at postings.gov.bc.ca, and you'll see openings there in terms of our climate change initiative but also across government generally.

When it comes to the specific new postings pertaining to the climate change positions that the member was just asking about, you'll see from the description that we're asking people to please identify what their salary expectations are. We have not yet determined what the salary range will be. To some extent, we're testing the market to see what kind of response we get, what level of expertise and interest is expressed, and we'll be making that decision in due course.

S. Simpson: As my colleague said to me, it's kind of like eBay. You just auction down or up the value of these jobs. I guess that's how it works.

What's the expectation about when these positions will be filled and when this team will come into place?

Hon. B. Penner: According to the information available on the Public Service Agency website — and again, I encourage people to go take a look at that — it does say that there's a deadline. If you're watching this debate, please pay attention. There is a deadline. Please respond no later than May 7 of this year. So you have a little bit of time to brush up your resume, but don't take too long.

S. Simpson: I'm glad, and I hope there'll be all kinds of good applicants — maybe even a climatologist or two. You never know.

The question is: when is the expectation of government…? Maybe the first question is: will this team be in the Ministry of Environment, or will it be located somewhere else in government?

Hon. B. Penner: Our first priority at the moment is to attract talented and capable staff. We will be making a determination shortly about where the staff will be housed, technically speaking, but they will be serving all of government.

The member may wish to characterize that as a group hug if he wishes. I think that's a demeaning way to refer to it because, frankly, this is an overarching objective of government: to work across ministry lines to accomplish something that I think is very aggressive and certainly ambitious compared to what you see in other parts of North America.

We have this 33-percent target for the economy as a whole by 2020 in terms of greenhouse gas emission reductions, but for the provincial government, our objective is actually to be greenhouse gas–neutral or carbon-neutral by 2010. So that's early on, and that will take initiatives across government, irrespective of ministry lines.

S. Simpson: I'm just trying to determine here…. When I read the service plan, the service plan tells me that the Ministry of Environment will lead on this issue. They will be the lead ministry on this issue, and that seems to make some sense to me, that that would be a place to put this.

What's not clear to me, then, is that if the Ministry of Environment is the lead ministry, but we're not quite sure whether the staffing complement will be within the ministry…. It's a bit perplexing to say the least. So maybe I'll ask this question: could the minister tell us what being the lead ministry means in this case, if the staffing isn't going to be there, and ultimately, if you have a cabinet committee chaired by the Premier that's going to make the decisions?

As already stated on a number of occasions, accomplishing our ambitious greenhouse gas reduction targets will require a cross-government initiative and work and cooperation from all ministries. The Ministry of Environment will remain, and is, the lead ministry

for developing potential legislation and regulations for accomplishing those objectives. But we will also be having additional staff resources to support the cabinet committee on climate change to make sure the changes are implemented across government, irrespective of individual ministry lines.

I think it's a salutary thing, frankly, that the Premier of this province, the Premier of British Columbia, takes the climate change file so seriously as to actually chair the climate change committee of cabinet rather than delegating that responsibility to somebody else.

Around the cabinet table, of course, I remain an advocate for all things to do with the environment, but I certainly don't mind having a little bit of extra help in the form of the Premier sitting right next to me at the cabinet table.

Noting the hour, I would move that the committee report progress and seek leave to sit again.

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

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

J. Horgan: We had a bit of estimates interruptus earlier in the week. We had expected to be back yesterday so, no fault of anyone's, we lost track of where we were going a bit.

I had one of my colleagues — the record will show the member for Vancouver-Fairview — who was asking a series of questions on the offshore oil and gas file. I'd like to pick up from there.

I've been reading Terry Tamminen's book Lives Per Gallon: The True Cost of Our Oil Addiction. The minister will know Terry Tamminen. He is a special adviser to the Governor of California, and I believe he's also been advising the province of British Columbia with respect to establishing the climate change action team or action committee.

In the discussion yesterday with respect to offshore, the member for Vancouver-Fairview, who is just arriving and joining us now, made some reference to by-products of drilling, and the minister said that we've come some distance. The world is doing this better than they were in the past, but there are still some problems.

In his recent book Mr. Tamminen writes, on page 29 — I'll just quote it so that we're aware of where we're going: "Offshore oil drilling also contributes an extremely large amount of heavy metal toxins to ocean waters and the sea floor. A single exploratory well dumps approximately 25,000 pounds of toxic metals into the ocean from drilling 'muds' — thick lubricants used to pressure debris out of the well and to cool the path of the drill bit as it rotates."

That's from a U. S. Environmental Protection Agency reference. I'm wondering if we could just go back to the point that the member for Vancouver-Fairview was making — the question of sludges and by-product. Is that one of the issues of science that the offshore team is looking at, at this time?

Hon. R. Neufeld: Certainly the ministry staff, in their discussions with other jurisdictions in North America and around the world in regards to offshore activities, would have had some of those discussions at some point in time. I'm not party to those discussions. I'm sure, on the east coast, that we've met with those folks. They've had those discussions. What they actually are, I couldn't relate to the member right here.

G. Robertson: I'd just like to step back for a moment. We did canvass the issue of offshore oil and gas rather extensively yesterday in estimates, but what is not clear to the opposition is the total amount of revenue that at this point is allocated to offshore oil and gas development. Can the minister give us a total?

Hon. R. Neufeld: Yesterday when we began estimates, we talked about titles and offshore being amalgamated this year, so the staff tell me the estimate for operations in the ministry is about $2 million.

G. Robertson: That $2 million is internal operations in the ministry. I'm assuming that it doesn't include any of the allocations to do further research through B.C. post-secondary institutions.

Hon. R. Neufeld: You'll have to accept that these are round numbers; they're not absolutely exact. But as I said, it's about $2 million. The staff inform me that about $700,000 of that $2 million would go to groups and organizations. Some probably could go to some universities for some study.

The number that we talked about yesterday — the $1.8 million — was up to the end of last fiscal year. I'm not trying to be confusing.

G. Robertson: Does that $2 million include all expenses related to public consultation and to work that may or may not be taking place with communities and first nations to do with offshore oil and gas?

G. Robertson: In the estimates at this point we're seeing about $5.5 million that is in titles and offshore — titles, obviously, now being included. But when it was excluded, there was $4.2 million in last year's budget for offshore. I'm not clear what the difference is between the $2 million that the minister is referring to and what we would assume would be more like $4 million to $4½ million.

Hon. R. Neufeld: What we did from…. There were some reallocations in the whole ministry between different divisions for different reasons. Offshore and gas — we removed $2.277 million; to titles division to supplement general operating costs — $441,000; to the electricity and alternative energy division for additional staff — $200,000; energy plan implementation — $436,000; and to marketing, aboriginal and community relations — $1.2 million.

G. Robertson: Will the minister just clarify that those are the detail lines within the $5.5 million total budget for offshore?

G. Robertson: Well, we would hope to get some clarity here around what taxpayers are paying for. The minister's rapid-fire list of numbers and transfers to different divisions, perhaps…. It's not clear exactly. He started out with $2 million in the budget for offshore, but it says $5.5 million in the budget as published. He referred to a list of other items and now says those aren't actually part of the $5.5 million. Can the minister give us more detail on what is in the $5.5 million, please.

Hon. R. Neufeld: No. I'm going to qualify this again. We did move some money around within the ministry to different divisions. The numbers are clearly in the estimates binder. Titles and offshore, in total, which is amalgamated from last year, are $5.5 million — $3.5 million for titles, $2 million for offshore. I'll just read the numbers again, and I'll read them a little bit slower.

Hon. R. Neufeld: You're good with those numbers? I don't mean to fire them fast. I'll read them slower, if you want. But if you understand that, that's great.

J. Horgan: I thank the minister. Quite often we're using different documents. I have a spreadsheet that I prepared myself, which doesn't look like this. I think that where the challenge came…. I guess this speaks to the overall reduction on the offshore team, which we talked about yesterday with respect to FTEs. When I look at numbers from last year, '06-07, the overall budget in the blue book was $4.2 million.

We amalgamate titles into this vote, and it's $5.5 million. So if I'm clear, and I think the member from Fairview is clear, we've had a reduction in the offshore team from $4.2 million to $2.7 million — no?

G. Robertson: Just to get the detail on that crystal-clear. In terms of the $700,000 that the minister indicated as going to groups, various organizations and perhaps to institutions conducting research, can the minister verify that some of that $700,000 is labelled for research projects at post-secondary institutions to support offshore oil and gas development?

Hon. R. Neufeld: No, I can't confirm that. The fiscal year has just started, so we'll go through the year. They anticipate using about $700,000 of that money for what I explained, and as we go through the year, the ministry will make those decisions.

G. Robertson: Thank you to the minister for the detail there. I'll just return to a point raised yesterday, clarifying concerns on Canada's east coast as to the economic benefits or the lack of economic benefits. The minister, I think, was not addressing the concerns that exist on this coast, much as they have for many years in the Maritimes on the east coast, around economic benefits to the communities and potential impacts to the other industries, the other sectors that make a living on that coast.

The minister presumed, I think, that my concern and my criticism about the lack of benefits to coastal communities had something to do with a lack of support for oil and gas development in the northeast, which is not true. My comments were specifically around oil and gas development offshore in the northwest of B.C., and my concerns tie directly to what has transpired on Canada's east coast, where coalitions of fishermen, first nations, scientists, concerned citizens all fought the establishment of an inshore oil and gas development in order to protect their livelihoods.

Although there was massive opposition voiced on the east coast over seismic testing, in the inshore waters of Cape Breton, Corridor Resources Inc. was allowed to

proceed there. The moratorium on Georges Bank off the coast of Nova Scotia was extended for ten years, due in part to these concerns raised about the impacts of seismic testing on commercial fishing there. As well, research by the Bedford Institute of Oceanography in Dartmouth, Nova Scotia, found that even the drilling wastes that are characterized as slightly toxic to non-toxic can significantly affect the health, reproductive success and survival of shellfish there — in particular, adult scallops which are a very important part of the local economy.

I think it's accurate to say that residents of economically depressed coastal communities on the east coast are not seeing, and have not seen, the economic boom that they were promised. They have not seen unemployment rates go down significantly. They remain among the highest in the country.

So I'll just repeat that concern to the minister as he continues to invest taxpayer money in offshore oil and gas development on the B.C. coast without the support of the communities and first nations and with the clear example of communities, first nations and industry on Canada's east coast voicing their concerns, raising their concerns, fighting to prevent seismic testing on their coast — and potentially ruin their fisheries resources.

It is absolutely critical that before millions and millions more dollars are invested and public relations campaigns conducted by this government upon the communities and first nations of this coast, the reality is met. The reality is that these benefits have not materialized on Canada's east coast for many of the communities there.

I'm curious if the minister…. Yesterday he claimed to have little knowledge of what has transpired there and deflected the concerns that I've raised about the lack of economic benefits and real concerns about environmental impacts. Is the minister investing any of that $2 million into understanding the benefits, challenges and impacts that have affected Canada's east coast?

Hon. R. Neufeld: I do remember the member's statement that the northeast had really not benefited much from the oil and gas industry. I answered that question quite fully yesterday, and I don't intend to do it again.

I did say to the member that I'm the Minister of Energy, Mines and Petroleum Resources in British Columbia, and that I would see if I could get some information about the east coast and the benefits. So staff were nice enough to go out and find some information. One is from Dr. Wade Locke, Memorial University of Newfoundland and a number of things. Oil is the largest revenue to Newfoundland in dollars and cents — $16 billion to provincial treasury on a go-forward basis from three existing fields.

Those are not my numbers. That's from a university prof in Newfoundland, also from the petroleum research from Atlantic Canada. It's relatively lengthy, so I won't read it all. But I'd be quite willing to send a copy over when estimates are over so you can actually have a look at it too.

This says: "St. John's, Newfoundland and Labrador, November 30, 2005. The oil and gas industry is not simply creating economic growth for the province. It is transforming the economy of Newfoundland and Labrador."

The study also notes that the sectors not related to oil and gas have experienced substantial spinoff growth. For instance, between '02 and '04 personal incomes grew by over $450 million as a result of the industry. This was over 50 percent of the total growth in personal income. This research was carried out by Jacques Whitford, interestingly enough — a company that's well known in British Columbia.

According to the study's author, Jacques Whitford, the oil and gas industry has changed how people conduct business in the province. Companies are now more ambitious, more competitive, more confident. The industry has also encouraged the adoption of international standards and business practice in such areas as health, safety, quality management and document control. The list goes on and on about the benefits of what took place in Newfoundland.

Indirect impacts. The member talked about indirect. "Accounting for these indirect linkages resulted in average total annual direct and indirect real GDP impacts of approximately $1.8 billion and an annual average direct and indirect employment impact of about 8,300 person-years over the 1999-to-2004 period."

I understand where the member is coming from. I've listened to him talk in every estimates I've had. I know he doesn't want anything to happen on the west coast. I appreciate that. That's your opinion. You're quite welcome to have it. What we've said with offshore: environmentally sound and scientifically safe. We've said that from day one, and we'll continue to work toward that.

Unfortunately, you and I have different opinions on offshore and a whole bunch of other things. That's good for us to be able to have that dialogue in this room and talk back and forth so I can better understand what you're meaning and where you are coming from but so you can also better understand where the government of British Columbia is coming from.

J. Horgan: Just before we move on to another area, I want to bring the minister back to a discussion we had about the NAPE trip in February. I'm looking at the document, and I'm wondering. There was very little severing when the freedom-of-information request went in, and I'm particularly interested….

It's a two-part question. Maybe it'll lead to more parts, but I have two off the top of my head, and we'll see how we go from there. On page 1 of the document — and I don't know if you need it — it makes reference to the meeting with Kinder Morgan and particularly with Rich Kinder and to a discussion about the Trans Mountain pipeline, which I want to talk about in terms

of our ability to reduce the cost of gasoline in the lower mainland and across the province. I'm assuming that pipeline capacity improvement would be a start in that direction, but we can touch on that in a minute.

The question for the moment is…. There is a heading "Vancouver Terminals," and it has been severed. Of course, following the minister's trip to Texas, Kinder Morgan took over Vancouver Wharves from B.C. Rail. As I don't have any information about the discussions the minister would have had at that time, based on this freedom-of-information request, I'm wondering if the minister could enlighten me on the discussion with Mr. Kinder, particularly around Vancouver Wharves.

Hon. R. Neufeld: That part was severed simply because the decision and the announcement had not been made. It would not be right to actually release the whole document that way. I can release the whole document to the…. I probably could. I can't remember the document in total, but that's the reason why.

J. Horgan: I see it's section 13, section 16 and section 21 of the act. So I made that assumption. In terms of the timing of the receiving of the report and the actual announcement of the purchase, I can see there would have been an overlap there.

I'd like to go back to the essence of the discussion with Mr. Kinder. This is a significant asset that was a part of the B.C. Rail package of assets, and as the minister will know and those that are watching at home will know, there is some concern about the disposition of those assets, whether they be rail assets or the gateway to the Port of Vancouver.

Would the minister be able to enlighten us today on the substance of those discussions? Was it to close the deal? Was it an update? Was it a briefing? What in fact was the minister's task in that meeting on that subject?

Hon. R. Neufeld: No, the visit wasn't to tie up any loose ends or to sign a deal. That wasn't in my purview. That was actually through a different ministry. The only discussion that probably would have been around that that I can remember was that they were part of the process, they didn't know and it was moving forward.

Actually, what I went to talk to them about was the Trans Mountain pipeline connection and the things that we had to do in British Columbia to facilitate that.

Then I can conclude that the minister and the Ministry of Energy, Mines were not involved in the negotiations for the disposition of that asset. I know it's not part of your portfolio, although the Minister for Mining would certainly have an interest in how the ports and the wharves conduct their business in terms of getting our products to markets.

Again, because the portions are severed…. I realize that the minister will take a look again, or his staff will take a look, to see if we can get the substance of the notes. It does raise questions when you see blanks where there are no blanks anywhere else and then, so closely after receiving the document, learning of the disposition of the assets.

I know we'll have the Minister for Mining later on, but maybe the minister could comment on what his view is on the value of moving this formerly public asset, which I believe was probably one of the more profitable portions of B.C. Rail. At least, it was when I was paying attention more closely. Why would we benefit from transferring this public asset to private hands, particularly to a corporation that had just recently taken over our distribution infrastructure for natural gas?

Hon. R. Neufeld: The timing was so close, when the request for the freedom of information…. That's the only reason, actually, it was severed. Had it been a little bit later, it probably wouldn't have been severed.

The Ministry of Transportation is responsible for the process that took place there. I'm sure you will have some questions for the Minister of Transportation on that. That's my involvement.

J. Horgan: As always when we have these overlapping jurisdictions, the Minister of Transportation has come and gone. I had a delightful time with him, but I wasn't able to ask him these questions.

As we have staff that have overlapping responsibilities, we can maybe canvass how this will impact the mining sector when we have the Minister for Mining here. That might be a better way to go. That will also give us some time to reflect on that. If it is, in fact, as the minister says — and I understand the rules and procedures here on estimates — the Minister of Transportation's responsibility, we'll pass on that for the moment.

I sent a note over to the minister, and I was chastised by the Chair — not this one but the last one. I wanted to then move not to an offshore series of questions but to the rising cost of gasoline products for consumers in British Columbia. The minister will know that I've been beating this drum for some time.

As recently as yesterday our neighbouring jurisdiction of Washington State announced, through three separate state departments — the Attorney General's office; the Governor's office; and the Department of Community, Trade and Economic Development — that they are going to establish a team to do a comprehensive review of gas prices in Washington State. Now, I know full well that in our interactions, even though we've been separated by time and space when we've been on radio, the minister doesn't share my view that the state or the government of B.C. has a role or function to play in trying to protect consumers from increasing costs.

The question that keeps coming back…. I've heard and I've read the minister's comments carefully on this. The question that keeps arising — he had it put to him squarely by Jon McComb from CKNW last week or the week before — is the disconnect for the public in the

lower mainland. This comes back, I'm hopeful, to the question around Kinder Morgan and the pipeline. Why is it that consumers in the lower mainland are paying on average ten to 12 cents more a litre, minus transit tax, for gas than their counterparts in Toronto?

It's an issue that won't go away. It keeps coming up. Certainly, CKNW and Jon McComb are doing a good job of the consumer advocacy role on that issue, and the minister knows that I've made some comments on it as well. But now to have the state of Washington involve themselves in this debate in such an aggressive way — three departments, including the Governor's office — I think sends a message to people here in British Columbia that if other governments are going to take a good hard look at this, why won't their own?

Again, I know that the minister makes reference to previous studies that were done, the Jaccard report in the '90s, and Jack Weisgerber and Ed Conroy did a review as well. I'll say to the minister — before he starts his answer so that he knows where I'm going to come from — that the industry at that time was quite different from the industry today. The concentration of ownership and the absence of any significant infrastructure improvements…. Maybe we'll get to that on the pipeline. There has been no movement to improve the lives of consumers on this question, and at the same time gas prices have doubled.

When Jaccard did his review, I believe the average price was somewhere between 40 and 50 cents a litre. When the Weisgerber-Conroy crew was on the road, I don't think it was higher than 70 cents a litre. Now we're in the neighbourhood of $1.25. If you use premium gasoline, you are into $1.30. Consumers are concerned about that.

The minister knew I'd be asking these questions, so we're underway, and I wish him well.

Hon. R. Neufeld: What I will do is get some briefings to myself in regards to the Kinder Morgan deal with the port, and we can maybe canvass those later on too. I'd rather get a little briefing first. I wasn't trying to shuffle you off: "The Minister of Transportation is done, and sorry, you can't find anything out." I'm not trying to do that. What I will do is find out what I can, maybe get a briefing, and then you and I can have a discussion about that — okay?

In regards to gasoline pricing, yes, the member and I have spoken on the radio and to different people at different times about this issue. I want the member to know that I take seriously — as he does, I know — the price of gasoline that people have to pay in British Columbia. Usually it's quite a bit higher where I live. That's always been a discussion that I've experienced or that people in the northeast have talked about: our prices compared to the lower mainland.

The issue around whether we should do an investigation certainly remains. I won't close that door, and I haven't closed that door ever, I don't think. What I have said is that regulating the industry…. The two reports that the member spoke about, which were both done during the NDP government, plainly said that regulation does not lower prices. In fact, you can go to some of the provinces where they have regulation, and sometimes they are higher than ours, and sometimes they are lower. So it doesn't control the price.

What the member says about actually doing a study to find out what's transpired is something that's always open to the government. I've noticed that Washington has done it. You're correct. I read that in the newspaper. That was dealing with prices within Washington, not comparing Washington to Washington, D.C.

What I hear is people comparing Vancouver to Toronto — two totally different markets, to me. I don't know what the market is in Toronto, and I'm not exactly sure what the market is here, but they are two different markets. They are almost 3,000 miles apart, so obviously they are different. Some of their supply is different. It comes from different places.

I'm not aware that the refining part of the industry has amalgamated that much since the last report was done in '99 or even the one previous to that in '96. There may be some retailers that have gone out of existence, but to my knowledge I think Chevron is still here; Husky in Prince George; I think PetroCan, Esso, Shell.

In Edmonton, where we get much of our supply, the same refiners were there back in those days as they are today — the same as they've been for an awfully long time. So I don't get the part about it being all slimmed down to maybe one or two. There are a number of refiners out there.

It's difficult to get the industry to talk about refineries, simply because of the cost of building them and the environmental issues around it. I know I've talked to the integrated industries a number of times about thinking about another refinery in British Columbia.

If we were to actually be fortunate enough to get some oil offshore or onshore so that we could feed that refinery, that would probably help us a little bit. But the critic will know…. He's listened to his colleague talk about how opposed some people are to getting oil in the province. It's pretty hard to convince somebody to build a refinery if you have to move the oil a long distance to get it to the refinery, especially with the facilities that are in place now.

I hope that answers the member's question. I don't think I ever said that we wouldn't at some point in time maybe review what's going on, but I've said clearly that this government is not going to regulation. Actually, that was similar to the government of the 1990s that said exactly the same thing.

J. Horgan: I've never said that regulation would reduce the cost. I've said that regulation would reduce the fluctuations, and that is what it has done in the Maritimes. That's what I would hope we could explore.

We'll have another opportunity, as the session wears on, to deal specifically with my proposals that might help consumers — in terms of at least being able to manage as you go into your long weekend, planning to go visit granny with the kids. You know that if you

don't buy the gas on Wednesday, you're going to be in deep trouble come Friday because the price always goes up.

The problem that consumers have when they see this…. I've used language like "collusion" and "gouging" and "getting hosed at the pumps." That's the vernacular of Langford. That's where I come from. I know the minister comes from a community of similar vernacular, but….

The challenge for me as a legislator and for the minister, being responsible for oil and gas in British Columbia, is when these consumers, our constituents, say, "What gives?" and they look at the responses from Chevron…. I've got files full, and the minister has them, and the staff see them and respond to them. You get your boilerplate responses from the PR branches in Calgary of the various retailers blaming governments. It's all government's fault; taxes are too high.

Of course, they take the opportunity to post on their pumps how much tax is going to the various levels of government, and that's fair enough. I think if we talk, over the course of the next number of days, about how government and particularly this ministry is going to respond to climate change…. It's important that consumers understand that some of that taxation or some of the room that may be created by a reduction in costs could go to alternatives, and we'll talk about alternative energies later on this afternoon.

When you read the bumf that comes from Shell and Esso, it's the government's fault, and the market will determine what the price is. You take that at face value. You see the truck come, and the truck fills the tanks at the PetroCan, then it goes down the street — the same truck — and fills up the Esso, and then it goes down the street to the Shell and fills it up.

International crude prices go down. The same gas that was purchased by the retailer, one assumes, on a Tuesday should be worth the same amount the next Friday, because it's the same gas. They're buying in bulk.

The minister has personal experiences outside of this place in this sector. Maybe he can enlighten me and those watching, because it befuddles me how gas that you buy on a Tuesday in bulk for your retail outlet can fluctuate, before the tank is empty, to the extent that it does.

The perception that the public has is that the retailer is hedging and saying: "Well, it's a long weekend. If I can put a couple of cents on, I may be able to shield consumers" — and this might be the case — "later on when the crude prices go up and my next shipment is a couple of dollars more expensive." That may well be, but that doesn't appear to be the case.

In Victoria, where I live, prices go up the same amount at the same time, and they come down the same amount at the same time. It looks like collusion, sounds like collusion, smells like collusion, but it's not because the test is so high at the federal level. I don't want the minister to — unless he wants to, and I invite him to — take a shot at the federal government on this issue.

The public doesn't feel that they are being protected by those that they send to these legislatures to do the people's business. They look at ExxonMobil's profits. They look at ConocoPhillips and at Chevron, and say: "Wait a minute. Why is it that they can fire a guy that was the CEO, give him half a billion dollars, still post a $39.5 billion profit, and gas prices are going up?" It's not their fault. It's government and the marketplace.

Hon. R. Neufeld: Certainly, I fully understand why the public would wonder a little bit about how the price of gas can increase fairly quickly at a service station.

The member used an example, I think, of gasoline coming Tuesday and by Friday the price goes up. I don't know whether all that gasoline was sold in that period of time or not. I don't know that, and usually the general public doesn't know that.

That's all up to the operator of that particular service station, whether it would be a…. It might be a company-operated one, and those people that are working there could be employees. It might be a privately operated one. There are different kinds of service stations or retail outlets across British Columbia.

Oil companies, when the gasoline comes from a refiner, all have different times when their prices change because of their crude acquisition. Some of them may acquire an awful lot of crude, thinking that the price is going to go up, and it actually goes down. That plays a whole bunch of ways in what happens to that crude when it goes through the refinery. It's a huge industry that is larger than probably you and I could ever stand here and try to talk about. I don't know all the ins and outs about it.

I just know that when I look at the regulated provinces across Canada, prices are sometimes higher than ours and sometimes lower. It does vary. The member says that everybody's price goes up at the same time here, where he lives. I appreciate that.

I think that comes from the comments that if they are different, if they are three or four cents different — not in relationship to the Fraser Valley or anything but, let's say, here — people will say: "Why in the world can't that person sell it for four cents cheaper than that other person?" There are obviously a whole bunch of those things that go on.

I want to make it abundantly clear that we are not contemplating any type of regulation of gasoline prices at the pumps. That does not exclude the opportunity for the government to put together a group like was done twice in the 1990s: Dr. Mark Jaccard, and Jack Weisgerber and Ed Conroy.

In fact, the one in 1996 by Mark Jaccard said, and I'll read part of his recommendation: "Direct government intervention in the market is generally the least desirable approach and should only be pursued as a final recourse."

In November of 1999 — with Ed Conroy as the chair; Erda Walsh, a member of the government at that point in time; and Jack Weisgerber, an opposition member at the time — their final recommendation was: "The committee believes that robust competition in the marketplace is preferable to direct government intervention in setting prices or enacting other regulatory controls."

I don't think we're any different than what took place in the 1990s. If the NDP thought it was an important thing to do now, I would think that their thought process would be the same in the 1990s.

They didn't just put together two committees to go out there and study gasoline prices for the fun of it. There were actually some things happening in the marketplace, and I would almost believe that there were some phone calls and letters coming in because the price of gasoline was too high and we had to do something. That was the response of the government of the day.

It does not preclude government from actually setting a committee to go out and maybe try to dig a little bit deeper into some…. They're legitimate questions that the critic has.

J. Horgan: Just on the thought processes. Mine alone frighten me. I know that it frightens the Chair as well, who I've known for some considerable period of time. My views change all the time.

I'm hopeful and, in fact, I'm fairly confident that over time the minister also …. He came to this place in 1991 carrying a particular banner, and his views moderated, modified over time. I think that's good for public policy, and it's good for intellectual vigour that you look at things anew over time.

It has been nearly a decade since the MLA committee did its work. I can't speak for the previous government, much as the minister and some of his colleagues quite often like to either credit me or condemn me for my association with the previous government. I was a simple country doctor in those days. Now I have a different role, and I'm exercising that role. I know that the minister encourages me in that, and I thank him for it.

We'll set aside regulation because partly that's an ideological issue. I'm not branding myself or the minister. Partly, government intervention in the marketplace is something that many people are uncomfortable with.

Here on Vancouver Island there was a company called Pay Less. Mr. Vandekerkhove, a philanthropist now and an outstanding senior British Columbian, injected genuine competition into the marketplace here on south Vancouver Island. Since his operation was taken over by Shell, that competition has more or less disappeared.

What we're left with are the majors, who appear to be on the same page when it comes to setting their prices at certain times of the week, at certain times of the holiday calendar — whether it be a school holiday or any other kind of holiday. That's where consumers get their teeth on edge. They know that if they miss their window of opportunity before they go on a big trip, it's going to add a few bucks to their adventure, and people are grumpy about that.

On the question of regulation today. As we look at 2010 and at the carbon-constrained environment that we talked about or will talk about — and certainly the Premier is concerned about — the notion of state involvement or regulation of this dwindling resource might be something that we'd want to consider, not so much to control prices but also to control supply.

If it is dwindling and if we are in a peak oil environment — which many people have argued — and we're not able to access offshore resources that the minister and his team are working on, then maybe it's not a bad idea for government to involve itself in the marketplace to ensure that the public….

These are public resources, after all. The tenures were purchased by private companies, but ultimately these are public resources. Maybe it's about time we started contemplating how best to nurture a new environment and a new day for the oil and gas sector.

These are more theoretical and hypothetical questions that we could discuss, perhaps, over coffee rather than over estimates. But the notion of the state protecting its citizens and nurturing this finite resource as we go into a climate change environment and peak oil and all these other issues that the public is concerned about and trying to grapple with….

The minister has been in his job for six, seven years now. He knows his files very well. He's got capable staff around him, and many of them are here today. He comes from the community, Peace River North, that is the heartbeat of the oil and gas sector in British Columbia. He knows the area very, very well, and he just said on the record that he has trouble trying to comprehend the size of this industry.

You can well imagine how I feel about that, absent the resources the minister has and absent the personal experience in the sector as a private citizen and also representing that area.

If he can't get his head around it and I can't get my head around it, what do the lunchbucket folk in my community and right across B.C. think when they go to buy these products? They get grumpy, they get angry, and they turn to us for answers.

When the minister says that it's hard to get your head around this, he's being honest. I really appreciate that, because it is hard to get your head around it. If he can't do it as the minister, with all the experience that he has from the area that he comes from, then what happens to the poor consumer back at home?

Perhaps we can talk a little bit more about the notion of maybe sending some folks out on the road. If he is looking for a volunteer, the summer is coming and I wouldn't mind going on a road trip with a government member — if you let me pick the government member. We could probably do a review similar to that which was done by MLAs Walsh, Weisgerber and Conroy.

If you wanted to go another route and contact…. I'm sure that Dr. Jaccard might want to reprise his role as commissioner and we could have a good, hard look

at this. When the public listens to what the minister and what I have to say and what others have to say on this issue, they end up becoming confused, and they don't know who to believe.

Do they believe that guy from Malahat–Juan de Fuca who is spouting off all the time about state involvement — which is only part of my repertoire on the question — or do they listen to the minister, who has this vast experience? Who do you believe? Who do you trust? At the end of the day, it all comes down to not trusting either one of us and sticking that nozzle into your car and spending too much for gasoline.

J. Horgan: "Trust the minister," says another minister. Well, that may well be the way the people want to go, but I'm sure after he has been in his position for a considerable period of time…. Trust is a delicate thing. Perhaps the minister could give us a sense of what the benefit will be to consumers of the Trans Mountain pipeline. Will that facilitate getting more resources to the lower mainland? How will that help consumers bring prices down?

Hon. R. Neufeld: When I spoke earlier, I talked about — and the member reminded me about — the size of the industry. We spoke about gasoline and it being refined. It is huge, and it's huge worldwide, not just in British Columbia. It's absolutely unbelievable how much it touches our lives. It's complex, as you can imagine.

I think that yesterday we spoke a little bit about how much each one of us depends on oil and natural gas — not gasoline, but oil and natural gas — in the whole developed world. It's the engine that keeps the economy going, that powers it worldwide. Regardless of whether you are flying in an airplane or buying a nylon jacket in downtown Victoria, it has touched your life in some way. That's what I was referring to as being huge and complex.

Bringing in regulation and referring to regulation and peak oil and those kinds of things — that's a little bit more regulation than I thought the member had been talking about. Maybe I have been misunderstanding the member. Maybe he is talking about regulating how much crude can move around.

Hon. R. Neufeld: The member corrects me, and I appreciate that. All I want to say to that is that I don't think regulation will help us in anything to do with peak supply and those people that talk about peak supply. What it does…. I don't disagree with the member. There is a certain amount of time that the prices will stay stable.

Guess what. When the prices are higher here and they're stable here, and they're lower in Toronto and they're stable there, you and I will be getting the same kind of letters. "What are you doing? Why isn't this happening?"

I appreciate it from the public. It's about what it costs them to fuel their vehicle up. I can understand that. I mean, I have to do that all the time too, as does the member. So I don't think regulation for that part will complete it.

I just will read into the record a little bit about Fuel Focus, which is a Natural Resources Canada agency. It says that current analysis by Fuel Focus, an agency that provides information and conducts research on petroleum products, states: "Provincial price regulations are generally introduced to provide more stable prices." That's exactly what we've been talking about: stable prices.

That's not an oil company. That's actually an arm of Natural Resources Canada that monitors it on a constant basis. It's on the website, and I'm sure the member has accessed it. I can't imagine he wouldn't have on a regular basis; I do much the same.

Regulation of the industry — no. Actually having a review at some point in time when government decides that that should happen is always a possibility. We've never closed that door.

I'm sorry. The question that you posed at the end about Trans Mountain Pipeline — I just about forgot about that. Actually, in increasing the size of the Trans Mountain pipeline that Kinder Morgan is doing…. I'm not sure what that will do for the price of gasoline. I can't tell you that off the top of my head.

I know that more oil will be moved from Alberta, which has most of the oil resources in Canada, in western Canada especially, through the lower mainland. Some of it will go into tankers to go other places. That happens now and has been going on for a long time.

I know also that there's a pipeline that provides refined products to the Chevron refinery in the lower mainland — gasoline, diesel fuel and those items. So hopefully it does, but I don't know whether that correlation will actually result in lower prices, because of the base that comes from refining costs, the cost of the crude in the first place and what it costs to retail it. That's what makes up the price of gasoline, plus all the provincial taxes.

J. Horgan: And federal taxes, which don't come back here in large enough quantities, in sufficient numbers, for people in my constituency. Is that a good thing or a…?

I've got the front page of an Ipsos-Reid poll that was done for CanWest Global News, "Profit-Gouging Behind Gas Prices, Not Explanation of Mishaps, Say Canadians" — 80 percent. You know, it's funny. It's like if you're selling tobacco or gas, you're not trusted. I'm not saying that the minister and I are in that camp. I'm saying that the companies have got a lot of work to do. Or maybe they don't, because we are a bit of a captured market.

Certainly, as long as we continue to be dependent on our single-occupancy vehicles to move ourselves and our families around, we're going to be going to their distribution network, and we're going to be filling up. The money that we put into the till there will go to shareholders around the world, and apparently there's not a lot we can do about that.

One of the other questions that were written was responded to this way: 61 percent of those polled said that company presidents should be called to testify and explain to an all-party parliamentary committee why it is that prices are so high. That's very appealing to me. Certainly, we wouldn't do that here in British Columbia, but I'd like to put a lot of responsibility for these issues onto the federal government.

The minister has heard me talk about windfall-profit taxes. That's certainly not something that we can undertake here in British Columbia, but if there is anyone in Ottawa listening to anything that we do here, I would suggest that they take a look at nudging those that are benefiting from our natural resources, and their shareholders, to contemplate maybe coming and justifying to the federal Parliament just what they're doing. That would put the minister and me in a better position to speak to our constituents about the true costs of this commodity and about why it is that it appears we're paying more than we should for it.

On the subject of profits, I don't know if the minister has seen his Fortune magazine yet. It has come in. I don't have a subscription, but someone passed this on to me: "ExxonMobil Profits Up 9.3 Percent on Revenue of $347 Billion." That speaks to the minister's comment.

This is enormous, touching every corner of the world and every one of our lives — everyone in this room in one way or another. Even if you walk to work with your nylon jacket, you're touched by this sector.

ExxonMobil, number 2, up 22 percent to $16.4 billion in profit on $200 million in revenue and ConocoPhillips, number 5, with revenue of $1.7 billion and a 15 percent increase to $15.5 billion in profit.

These are my scratchings at three in the morning, when I'm surfing the Web to find out what's going on in the sector. It's frightening for me and certainly for people at home, and for constituents in Peace River North, in Malahat–Juan de Fuca and in other jurisdictions in British Columbia it's frustrating.

The minister understands why I raise these issues, and we disagree on a couple of things. I think that the Utilities Commission as a watchdog agency is a reasonable approach. The minister will understand when we have another opportunity in the Legislature to discuss my suggestions or solutions to this. If we had the corporations having to justify themselves to an agency such as the Utilities Commission, then we may well at least be able to provide the public with some comfort that the province is listening to what they're saying.

Just a couple more points. The minister talked about refinery capacity, and we hear, whenever the hurricane season comes, that the Gulf refineries are going to be at risk. That's a price pressure for us even here, as the international market responds to that. The minister need not lecture me on it, but he can if he wants. Capital will go where it gets the greatest return, and what troubles me is that if we have a refinery capacity challenge, why wouldn't a responsible corporation try and meet that challenge by increasing refining capacity? If not here in British Columbia….

The minister did touch on the environmental challenges we would have in situating new refining capacity. It would be a significant challenge. I'm not oblivious to that. But there are communities that may well welcome that industrial activity. And has the minister contemplated, when he does his tours and meets with industry leaders, encouraging refinery capacity here in B.C.?

Hon. R. Neufeld: Yes, I'd be pleased to. Actually, the energy plan lists one of those things — working on furthering our petrochemical industry in the province and, also, a petroleum refinery. So that's part of what I…. When I do visit sometimes with the oil and gas companies, I talk to them about those proposals. We'll continue to work, not just through my ministry but with the Ministry of Economic Development, in trying to have that happen.

The second part of that challenge is what you and I spoke about earlier, which is actually having an oil supply. We have 11 million barrels of oil a year. That wouldn't even begin to fuel a refinery of the size you need today, because I'm told they have to be really large to be economic.

What happens now is that they don't build new ones. They just continue to add to the ones that are there. The north part of Edmonton is an absolutely huge oil and gas industrial area, with Petro-Canada and Shell and those people. They just continue to build where they're at — larger refineries rather than building smaller ones around.

For a while that was what made sense to them. To take the oil to the refinery and then send the refined product out — either by pipeline, like we get a lot of in the lower mainland, or by truck to different parts of the country — and get rid of the smaller, I guess you could probably say at the time, very inefficient…. I don't know whether they were or not, but they were old.

I know that the one that was in Taylor in British Columbia was a very old refinery that didn't meet the standards that are here today or at the time. In fact Husky, in Prince George, is constantly upgrading their refinery to meet the new standards that come into place that all of us as government actually tend to load onto the industry.

The member talked a little bit about the feds. Maybe it would be a better thing to have the federal government…. Maybe you ought to lobby the federal government to help us across Canada, rather than trying to do it in one jurisdiction. It might be a good idea, and I credit the member for saying it, that we should maybe talk to the federal government about doing one for across Canada.

I say that, but I understand that…. They've done a number of them — the federal government — not the present one but federal governments over time. They do get really complex, because it's across the whole country. Maybe that would give all of us, regardless of where you live — whether it's the Yukon or Toronto — a better idea of what all goes into making up these prices that we experience in different places.

J. Horgan: We could go on, on this for a long, long time, and I know we've got a lot to do and not a lot of time left.

Before we move on to the electricity and alternative energy division, to give a heads-up to those who have their binders ready to go, I'll close on the gas price question by thanking the minister for being receptive to the notion of a government-led investigation. I think that would go a great distance toward giving at least some comfort to those who have not heard anything from the government, other than: "The guy from Malahat–Juan de Fuca has got the wrong answer."

I don't have a problem at all with us disagreeing on my approach versus another approach. I've tried, and the minister will know that when I do enter into these discussions, not just with him but with other members of executive council, I'm trying at all times to not be destructive but constructive. If my ideas are wild and batty, by all means call them wild and batty. Say I'm dreaming in Technicolor; I'm okay with that. But let's have something back, a little bit back.

I have been trying to generate some discussion on this issue within the province. The minister and I have done that. Certainly Jon McComb and CKNW have been spearheading their campaign, which is being fed by consumers and not by any personality or desire to just hear themselves talk. It's been spearheaded by consumers who want some answers, so I am pleased.

I am hopeful that the Washington State decision to have an extremely large review of their internal markets will facilitate a similar movement here in British Columbia. With that I'll carry on and move into the next section that the minister and I have agreed to discuss, and that would be the electricity and alternative energy division.

My first question would be that, again, looking back on the throne speech, there was an expectation that this was going to be if not the year then the decade of the alternative energy division. Yet when we looked at the budget, we saw a 35-percent reduction in resources to that division. Could the minister explain to me why there was a cut this year?

Hon. R. Neufeld: The dollars obviously changed. It didn't take a cut in the division. In fact, I've answered these questions before to the media. In '06-07 the estimates budget was $3.691 million, and this year in the '07-08 budget it is $2.389 million. The difference comes from $1.5 million that we had received and put into that budget to do the energy plan, and $500 for the northwest transmission line study, which was $2 million — inclusive of the $3.691 million. That's why the change. We've actually had an increase, if you do that math.

J. Horgan: Last year over this year: the minister's explanation for the reduction is that a lot of resources were put into this division to facilitate the energy plan, part 2, and now we're back to our regularly scheduled program. Is that more or less what I just heard?

Hon. R. Neufeld: I inadvertently said $500. I mean $500,000. I'm sure the member understands that. So it was $3.691 million. You take $2 million off that and add the others, and we're at $2.389 million. The FTEs have gone up by five people in that division, even though it's a lower budget number, so that we can get some of the work done that we put out for ourselves to do in the energy plan.

J. Horgan: I must have an old org chart, because within that division I have the assistant deputy minister, a director, an acting director of electricity policy, a director of independent power producers policy, and an acting director of bioenergy strategy.

Can the minister confirm that we have four directors: alternative energy, electricity policy, independent power and bioenergy? And if that is the case, could he explain where those five new FTEs are reporting?

Hon. R. Neufeld: It's always nice to read this small…. My staff and I have an ongoing — so the member knows — discussion. When you're giving me notes, give me ones that I can actually read. The numbers are so small.

One reports to a director in the bioenergy strategy. There are five new ones, right? That would be Geoff Turner, okay? It's over on your very right-hand side on the graph, if you got the same one as I have.

There are three new ones that report to Dan Green, a director in the alternative energy policy, and there's one that reports to Shelley Murphy, a director in electricity policy. That gives the five. So we now have actually a total of 22 people in the alternative energy division. We had 17 last year.

J. Horgan: As we move into creating the climate change action team, would this division be the focus of the ministry's participation, or am I on the wrong column?

Hon. R. Neufeld: These people will be part of where we will get our information from. They won't be

the only. There are other ministries that will participate with their people that will actually give us information on the climate action plan. But also in the oil and gas branch, there will be people that will not be working steady but will be working on those programs.

So the member knows, the ICE fund, which we just introduced the legislation for, will be staffed by more people, not with these people. We'll get some more people to work on that. That doesn't mean that some of these people won't be doing some work on it, but to facilitate doing what we have to do with that fund, we will probably have a number of more employees to help us with that.

J. Horgan: I understand the secondments and transfers and many corners of a desk — it's amazing. I look over at some of the staff…. I know, it's amazing how much stuff you can put on corners. There are only four corners on a desk, but it seems five or ten or 20 corners are being fully occupied by other work beyond core operations. So I understand that, but you've opened a door for me. I have to go through it.

You're going to generate $25 million from a levy, and we'll be discussing that in more detail. The plan is to staff up to utilize that fund and feed the climate action team, or are there other activities that will be undertaken out of that fund?

Hon. R. Neufeld: I just wanted to lay out some information for the member on the ICE fund. I don't think it's proper for us to actually debate the legislation in this room, and we'll do that when we get on the floor of the Legislature. I was being kind in saying that there will be some more people to facilitate that.

J. Horgan: Well, I think we all knew we were getting a little bit off the estimates process, but I enjoyed it for the brief moment that we did it, and I'm sure we'll have a more fulsome discussion in the other place when the bill comes up for second reading. But it's nice to know, and I thank him for that.

As I think about where we're going with climate change…. Again, when I hear from non-governmental organizations, when I hear from energy advocates and others that are…. I look across at your current staff person helping out here. He has seen a lot of these people appear before him when had a different role.

Everyone's anxious to know where you're going. There's not just the energy industry, but there are those that make their living off the energy industry. That's by watching, observing, commenting and trying to direct. Those individuals — NGOs, those that are attending the Utilities Commission on occasion or all the time — are curious as to how the government is going to respond to the road map that was laid out in the throne speech. They looked at the budget. They saw the disconnect on funding for this particular branch. I think the minister's given me a sufficient explanation as to why that happened. But that still leads us to: where are we going from here?

With the little bit of help, I can see that the $25 million we'll see over the next 12 months will start to shape that. But let's assume, then, that we're not having that discussion, but I know it's taking place. We've got the alternative energy branch. We've got the oil and gas division. Is there any other process contemplated by the minister in terms of redeploying his team in staffing the climate change committee, or is that someone else's responsibility?

Hon. R. Neufeld: What we have done — to try and explain it from a 50,000-foot level — is, through the energy plan, long before the throne speech and before the energy plan, while we were developing the energy plan…. Environment will still have a climate action plan that they'll bring out sometime in the future, and I encourage the member…. Those estimates aren't over. In fact, I think they're ongoing right now.

What we've said is that we have some targets we want to reach, and those targets are to reduce greenhouse gas by 33 percent, just for one — 10 percent below 1990 levels. We want to actually have some targets for some different years — 2012, 2016 and then 2020 — to reach that 33 percent.

We've said that we want Hydro to get 50 percent of their new incremental supply through conservation. We've asked them to continue with a 50-percent minimum from clean green sources, which they've been able to meet by almost 100 percent. There are a whole bunch of actions that are taking place, as we speak, within different ministries.

But the cabinet committee on climate action is hearing from different individuals — academics, NGOs and environmental agencies and groups — and those people that better understand climate change so as to explain to all of us some of the hurdles we would have to meet. Industry is part of that; consumers will be part of that. We need to get some information from those folks that will actually help us figure out exactly how we can meet those different targets, how we can set targets for 2012 and 2016 and meet all of those targets as we move forward, so the public has some confidence in what we're doing.

It was not a surprise to me that there wasn't a lot of money in any budgets to actually facilitate that, because we set the target. It's going to take a while. I mean, this will be ongoing. Probably, you'll always be reviewing what you're doing or what you can do better. We'll actually have some of those targets set so that by next year those ministries responsible for actually carrying out many of these goals will be able to have some money to help meet those targets in different ways. From a fairly high level, that's what's envisioned to meet those targets and those goals.

J. Horgan: I don't have it with me, but I did see the order-in-council that appointed the minister and others to the climate change cabinet committee, which I think we're now calling it. Maybe you can help me with

some of these names. This is the climate action team? Is the constitution of that the cabinet committee?

J. Horgan: The cabinet committee on climate action — the minister is a member of that. I want to try and be clear on this. We know that there's going to be a new group of staff coming on to the ministry. We have 22 FTEs in the alternative energy branch. Again, those at home, when they think of climate change, are getting their heads around it. We're all getting our heads around it.

I will say that the previous government had a climate action plan in 1999-2000 to address Kyoto commitments. I recall attending a conference in Quebec City with the former Minister of Environment for the federal Liberal government, who used to be a guy who hung out in this city. He came in with an entourage that would have even embarrassed…. Well, it certainly was embarrassing to me to watch that many people coming with one minister when the Ministry of Energy, Mines and Petroleum Resources was represented by the minister and, I think, two staff — and doing most of the work, if I recall, at that conference. Then, here came the federal government with all of its benevolence and good wishes and little more.

Hon. Chair, if you're getting some sense that I have a grudge against the federal government, you'd be absolutely correct. But that's just me. I'm a Vancouver Islander. I can't help myself.

At that time, in 1999-2000, and I'm sure structures haven't changed that significantly…. In fact, since I see so many familiar faces, I'm fairly confident that the personnel with the capacity to carry forward the work of the cabinet committee are housed in the minister's branches and also with the Minister of Environment — and the Minister of Finance, who happens to be with us as well.

Is there a plan to create a secretariat of some kind or a team of public servants to service the committee? If there is, how many are being offered up from your ministry?

Hon. R. Neufeld: The member refers to the ads that were in the paper over this last week to have people apply. It's an open application. We want to get the best people we possibly can to staff the cabinet committee on climate action. That doesn't mean that people will be moving out of my ministry or out of any other ministry. What we're doing is looking for the best people we possibly can to actually staff that.

J. Horgan: In the course of staffing-up for this significant undertaking that the government has outlined in its throne speech — again, I appreciate that the minister's just a member of the committee; he's not the chair — would the committee be seconding some of the capable people in the alternative energy branch, or would they just be relying on their traditional off-the-corner-of-their-desk approach to getting the work done?

Hon. R. Neufeld: Again, it's an open competition to actually staff the committee with some of the best people we can. I am not aware of any secondments that will take place from different ministries, but we will certainly be providing a lot of information. We'll be working hand in hand with them.

We take this seriously, so it's not off the corner of our desks. We actually added five people to the alternative energy branch to help facilitate some of the other things we're doing across the province in clean energy generation and those kinds of things.

So we will actually be part of…. I mean, the people that work within the ministry and other ministries…. Even Transportation will be involved. There will be a whole bunch of ministries that are involved with climate action, because it actually crosses almost all of government.

J. Horgan: I wasn't suggesting that staff would be doing this casually. I know he didn't mean that, and I hope no one took any offence at that. My suggestion was that they're already overworked. Now they've got more work to do, and there are only four corners on the desk to get it all done.

I want to be clear on this, though, because again, my expectation as critic, when I saw and sat through the throne speech and have been observing events as they've been unfolding since then…. For example, today's front-page story in the Vancouver Sun says: "B.C. Joins Schwarzenegger's 'Carbon Credits' Trading Market."

I'm curious if the ministry has been participating in the formulation and creation of some of the ideas already, prior to the establishment of the secretariat, to assist government in making decisions such as what appears to have been made today.

Hon. R. Neufeld: In relation to the press release that came out, this government and our Premier have taken climate change seriously. We've always taken climate change seriously. In fact, when we first got into office, our first energy plan certainly directed us down that road.

We moved away from an energy process that was in place, which was going to use natural gas to generate electricity, to more alternative energy, more run of the river, more renewables in the province.

In fact, the goal under the previous government was to acquire 10 percent of the incremental supply from clean sources going forward. We increased that to 50 percent. As I said earlier, Hydro has been able to maintain almost 100 percent of that supply from clean sources, which is great for the province.

We've been working very hard on climate change. We know that this airshed is not just ours and that, regardless of where people run a border or think there should be a border, the airshed is the same.

What we want to do is work with folks that are south of us in the Pacific Northwest. We have an awful lot of interaction, not just in climate, but with energy trade — whether it's electricity or natural gas, north-south. We think we can work very well with those states south of the border in putting together some of our proposals on how we're going to deal with the reduction of greenhouse gas — not just in the province of British Columbia, but co-joining with those other states.

Now that the federal government conveniently released some of their climate action plans or greenhouse gas rebatement — it's interesting. We're hoping that the rest of the country will start joining hands with British Columbia and its leadership role in how we deal with greenhouse gases — not just north-south, but also east-west.

J. Horgan: There is some disconnect, again, on the creation of the first energy plan and the development of the second energy plan. This speaks to IPPs — I don't know if we should wait to have this discussion until our friends from B.C. Hydro join us — and the awarding of two contracts to burn coal with Compliance in Princeton and, also, the proposal in Tumbler Ridge. I was pleased to see the government respond as they did to those proposals. I'm curious if we've had any response from the companies.

There was a suggestion that biomass might be a solution in Princeton. Then that speaks to the notion of whether we need a carbon ledger or some other way to determine how much energy we expend bringing the biomass to Princeton to be burned in a plant that's sitting on a pile of coal. The whole motivation for the plant in Princeton was to burn coal that wasn't marketable for anything else, and it was right there beside the plant.

Siting is so important on these issues. Certainly, the minister knows that. I know I've had discussions with his colleague, the member for Peace River South, about the sequestration prospects in the Peace country.

You've got a whole bunch of holes already poked into the ground. If you were going to use carbon dioxide or other gases to push through and be more efficient in emptying out wells and then capping them with carbon — and he and I have had this discussion off line — I think it's a good idea.

We all know that if we can find clean ways to burn coal, the world is going to be a better place. The impact on British Columbia is infinitesimal compared to the impact on our neighbour, Alberta — and don't even start on Southeast Asia and the entire Asian continent, for that matter.

We all understand that B.C.'s contribution to reducing greenhouse gases…. In terms of the electricity sector today there's not a lot of room for us to find savings. But if we are creating greenhouse gases to find fibre to take to a place that only got a contract because it sat on a pile of coal, that seems to me to be inefficient. I'm wondering if the minister could tell me what the state of play is with the Compliance project in Princeton.

Hon. R. Neufeld: Two projects that bid in to the last call both have energy purchase agreements that are in place right now. There's a confidentiality agreement with both of those plants. The one in Princeton had been designed, as I remember, to burn 40-percent biomass in the first place and the rest coal. So they're reviewing what they can do to look at burning biomass. In fact, I'm told that within 100 to 150 kilometres of Princeton there's enough wood to feed a mill that size.

The member talks about: does it make sense to haul the wood that far because you will create…? And I don't disagree. We will create some greenhouse gases. We can't totally stop the economy. I'm sure the member understands that. What we need to do is continue to work on how we can have diesel engines that burn cleaner.

Transportation is about 40 percent of our total greenhouse gas emissions in the province — I think either 38 percent or 40 percent. We need to look at ways that we can reduce that. Earlier we spoke at length about cheap gasoline for people. If the gasoline is worth less, they're probably going to drive more. So we need to look at all kinds of ways that we can get a lot more efficient on those kinds of things.

The beetle wood that's out there, the slash and the garbage wood that's left on the forest floor at the present time, and the remains that are burnt in some beehive burners is actually going to get burnt anyhow. It's going to create greenhouse gases even if we let it rot on the forest floor.

We've got some huge problems with beetle wood and the possibility of fires that could take place — huge fires, forest fires — if in fact it's just left out there. We think it's a good way to look at generating electricity. It's greenhouse gas–neutral.

I'm told by the scientists, the trees, when they first grew, actually absorbed as much CO₂ as they're going to put out when they're burnt. The fact is that if they lie on the forest floor and die, they're going to release that CO₂ also.

I realize we're going to have to move it to a central site to burn it, along with the slash. But, in all fairness, I think that makes good sense for the province. We're not talking about moving it hundreds and hundreds of miles.

J. Horgan: Well, I haven't had an opportunity to take a hard look at the announcement that B.C. Hydro made today about those responses to the requests for expressions of interest, if I've got the right acronym. It's something of that nature. The minister knows what I'm talking about. I haven't had a chance to look at that. My colleague from Cariboo North may well be joining us soon, and he can canvass that with you.

I do know that there are some issues around tenure. It's a challenge. There are small mills all over B.C. that would desperately love to go into TFLs and take the stuff that's lying on the forest floor and put it to a higher use, remanufacturing it into something useful for British Columbians and for other markets. They're not able to do that at this point in time.

As we open up the discussion around bioenergy, I agree with the minister that it's better to put it to a

higher purpose than to leave it to emit its greenhouse gases on the forest floor. But the questions that arise from this, just on tenure alone, are problematic. Then there's the question of the carbon ledger and the volume of greenhouse gas emitted to take that product from where it is and burn it in some other location.

So I'm wondering: is the ministry, through this division, looking at the tenure questions, or is that currently with the Ministry of Forests?

J. Horgan: So we have the ministry that's fundamentally responsible for overseeing the Crown corporation that will be purchasing the independent power from those who are generating it through taking a product from another ministry, the Ministry of Forests. I'm already confused, and I've been paying attention.

For those who are trying to manage this issue in their minds — those NGOs that I spoke about earlier and those that will inevitably be appearing at the Utilities Commission when any of these energy purchase agreements come forward — how do we reconcile that inherent advantage that large tenure holders currently have? And does the minister have any thoughts on how we could manage that?

Hon. R. Neufeld: The member's right. I certainly don't want to lead anyone to believe that this is a simple process. We have known for quite a long time, and I've talked for quite a long time about what we could do in some of those communities that are going to experience some huge hardships in the future, if in fact we don't get some kind of industrial activity happening in those communities to sustain them.

If you want to talk about the interior a little bit, that's some of the reason why we have Geoscience B.C. actively looking at different areas across the province to see if we can't get some more mines going. There's great geology in some of those places. There's also the opportunity for oil, at least what we understand from the information we're given — oil and natural gas and, obviously, coalbed gas in some areas — to try and keep those communities whole.

In fact, the Ministry of Forests does not do it in isolation. My ministry and the Ministry of Forests are working very closely together. The Ministry of Aboriginal Relations and Reconciliation is working with us. So it's a cross-ministry process that we have in place.

If we were to go out and just design a call, some of the things that the member talks about would probably happen. I'm not saying they're not going to happen anyhow. But what we said was: let's have the Crown actually go out and ask for expressions of interest. And that's what they did. They got, I think, just over 80 responses to expressions of interest. They include independent power producers who have the expertise in building some of these plants that would be needed, and you have the forest industry. What we need to do is to get those two organizations and those two groups together.

I was pleased that we got over 80 expressions of interest in that short time period — from somewhere around the end of March until the end of April. It demonstrates to me that not only the forest industry but also the independent power producer industry and our Crown, B.C. Hydro, are all interested in trying to do the best we can and use the highest and best value for those logs and the waste that's on the forest floor out there, that's being burnt in burners as we speak — to try and facilitate together.

What we want those groups to do is actually work together to figure out if they can do it. If in fact they can't come to some agreement…. I can't imagine they won't come to some agreement. You have some pretty good entrepreneurs in both industries — the forest industry and the independent power producers. We have first nations that I think have a few proposals in there. That's great. They're actively involved, and they want to get involved.

I think there are some huge opportunities for some synergies here, as long as we let the process work through and don't try from Victoria to design something that might not work on the land base. Let's let those entrepreneurs work together to come up with some solutions for us, and I don't for a minute think it's going to be simple.

J. Horgan: I'm pleased the minister recognizes that there's a significant challenge here. Again, coming from what used to be a forest-dependent community and now is by and large a service-dependent community, when you see large tenure holders leaving marketable timber on the ground, it's tragic. Then when you also see, as we are seeing in some communities — and certainly my colleague from Cowichan-Ladysmith — that marketable timber not going to mills but driving right by the closed mills and going to the water to be shipped elsewhere, this causes some frustration. So it's not just the technical challenge that the minister has and his government has, but there's a political challenge as well.

Certainly, with the beetle-kill and the interior communities…. I'm colour blind, so every time I go into the interior, I can't tell if the trees are dead. My spouse and I went for a trip. She was telling me what percentage of the forest was dead because I couldn't physically see it. For her, it made her weep, and we're from the coast. I understand there is a crisis. It's not lost on me.

My colleague from Cariboo North has just joined me. He'll have some more detailed questions, but I'll talk so he can understand what he missed from the television to the room.

I appreciate that the minister recognizes that this is a significant challenge and that the expression of interest produced 80-odd responses from the forest sector,

from the IPP sector. Achieving those synergies is what's going to make this work. But, as I said, the large tenure holders have a leg up.

With that I might cede the floor to my friend from Cariboo North. I'm going to be going where the minister might want to go any minute now.

B. Simpson: When the energy plan was announced, the bioenergy strategy was an upcoming event. What is the status of the bioenergy, and when will we see it?

Hon. R. Neufeld: The bioenergy strategy is being worked on right now. There's a number of different ministries that are involved. Agriculture is involved in it. So is my ministry. So is Forests. There are a number of things that are happening. I don't have a definitive date for when that will be tabled, but there will be a press release along with it. Everybody will know when it hits the ground.

B. Simpson: Within the Ministry of Forests and Range, there's documentation to suggest that that strategy was tabled with the ministers in September. What's the nature of that documentation? It said that the minister had the strategy. I believe Janice Larson was named as a person who was doing the work. What is it that's stalling the strategy from being released? Initially, it was indicated that it would be released before the bioenergy plan, and then after the bioenergy plan. We're already out with our requests for expressions of interest without a strategy being tabled. What's stalling this strategy from coming out?

Hon. R. Neufeld: Nothing is stalling it. Yes, we've had a number of drafts. Yes, we've looked at it. From my ministry, Janice Larson in the alternative energy section is working hard on that. When we get the strategy finished and completed, we'll be releasing it — but not until then.

B. Simpson: Who ultimately will own that strategy once it is released? Who is the lead agency in the bioenergy field?

Hon. R. Neufeld: My ministry is heavily involved. I think the member is quite well aware that Agriculture would obviously be heavily involved. Cellulose, ethanol, biodiesel and those kinds of things are all part of it. We will all have a large responsibility in it. As I understand at the present time, my ministry will be in charge of it.

B. Simpson: With respect to the strategy, I'm not clear why we went to a request for expressions of interest prior to people knowing what the ground rules were for moving into bioenergy. Why didn't the strategy come out in advance of us going out and saying: "Who's interested in this?"

My understanding from everybody I've talked to is that they're all left scratching their heads, wondering what the lay of the land is, what the policy framework is, how we access the fibre, who's got rights to access the fibre, and is it viable to access the fibre? So what was the thinking behind going to a request for expressions of interest prior to actually giving people a sense of what the strategy and the policy framework might be?

Hon. R. Neufeld: For the member's information, the critic had asked much the same kind of question, so I'll attempt to explain it again. We've had discussions for quite a while within government, within the different ministries about what we can do with beetle wood across the province. We want to use as much as we can to the best use we possibly can, and I'm sure the member would agree with me that that would be a good strategy.

The member talks about: why didn't you figure it all out first before you made a call? In my experience, when Victoria sits down and decides that they're going to actually look at something as complex as this and comes up with documents that are probably thousands and thousands of pages, more people scratch their heads than the way that we've done it this time. The member says that lots of people are scratching their heads, and there will be lots of discussion. You know what? That's what we want out there. We actually want entrepreneurs to start thinking about how we can accomplish these kinds of things.

What we have asked for are expressions of interest, and there must have been quite a few people that thought it was a pretty good idea, because we got over 80 expressions of interest. We didn't want to say, "This is how you're going to do it," because that says that the Crown or Victoria is going to tell you exactly how you do it.

What we wanted to do was encourage the entrepreneurial spirit out there between the IPPs, first nations and the industry to come together, without any interference from government, and try to figure out how they can work together to make these kinds of things happen. I have great faith in entrepreneurship. Maybe I'm a bit different, but I don't think we need to actually predesign everything that we do. I think that we should be out there asking people to come forward with some ideas, to think out of the box. They live on the land base. The member comes from that part of the country, and he lives on the land base, so I think he understands what I'm trying to say here.

I was pleased about the expressions of interest, with over 80 proposals coming forward. Are they going to be difficult to deal with? You bet. There are all kinds of things that are going to make it difficult. The ministry and I — and the Minister of Forests, I think — don't want to make it any more difficult than it already is. So what will happen is that they've responded to B.C. Hydro's call that they put out in, I think, just over a month. It took five or six weeks or something for them to pull that information together.

The Crown will work with those groups or those people from all of those proposals, and we'll see what we can actually get that will work on the ground. There

is no cookie-cutter for this — nothing. There's no cookie-cutter for how you're going to deal with beetle wood. There's no cookie-cutter for how you're going to deal with it in burning it, some of it — the stuff that's not usable for other purposes in generating electricity. There is no cookie-cutter for that.

This is all brand-new. This is new to us. Beetle kill is new to us. How we actually generate this electricity is new to us, and what we need to do is get that input into the process rather than predesigning it up front and saying: "Okay, here it is. Now you go out and figure it out."

The member knows that this is not dissimilar to what we have done with encouraging run-of-the-river projects or independent power producers to come forward with different ideas about how to generate electricity in British Columbia. The Crown, B.C. Hydro and the government didn't go out and design that this is exactly how it's going to happen. No, they went and worked with the independent power producers. The Crown has huge knowledge in how you actually move that electricity around and where we should be buying it from.

So we drew on that entrepreneurial spirit. Once they make a call and find some flaws in it, which they probably always will — not because anybody would design those flaws into it, but it happens — they can get together, before the next call, and figure out how they can make that better so it works better for everybody.

I'm hopeful that that's the process we're looking at now. We can try to find all kinds of different ways that it won't happen, and I don't think the member is trying to say that. I think the member would agree with me that we should be working together to figure out how we make it happen so that communities, such as where the member lives, actually won't see such a dramatic downfall in the economy as we move forward over the years.

I think there are all kinds of industrial activity that we can get on the ground to provide employment, hopefully with the cooperation of communities, first nations and people in those areas.

B. Simpson: I never had an expectation that the minister would have figured it all out before he went out because it is complicated. However, I would challenge the minister's contention that it's not any different than things like run of river, etc., because people knew what the licensing arrangement would be.

The fundamental question here is that people don't understand what the licensing arrangement is going to be. Most of the available fibre is under forest management–based licences, not energy licences. That's the fundamental question that people have.

So what they want to understand is: "If I get a licence for bioenergy, do I have to absorb normative forest management responsibilities — roadbuilding, planning, forest stewardship activities?" The FERIC reports, the BIOCAP reports — all of the work that was done that was absorbed, supposedly, into the bioenergy strategy indicates that there's no business case to do that.

You actually have to discount. The FERIC report discounted normative forest management practices, did not include planning, did not include roadbuilding, did not include silviculture costs in order just to deal with roadside waste — waste that was already yarded, bundled and prepared for somebody to go in and pick it up and bring it out.

There are questions about the radius of which you can bring this waste to a central repository and use it for energy. Is there further sorting that can be done? What's the radius where you actually then end up losing your carbon-neutral status because of your fuel consumption for bringing it into that central repository — whether it's another sorting site or whether it's the energy site. What's that radius? Is it 100 miles or 150 miles? What is it?

Fundamentally, the questions are different here than any other IPP process that we've done because the licensing arrangement for wind, water or geothermal is a lot clearer than the licensing arrangement for an oversubscribed land base that has higher-level plans on it — hence, Agriculture and Lands has to be involved — or that has forest management criteria and tenures over it — hence, the Ministry of Forests and Range has to be involved.

That's the whole reason that people are saying that they wanted to see at least a draft of the strategy to get a sense of the framework and the government's thinking before they came to the expressions of interest.

Now, the minister is correct. We got 80 expressions of interest. My question is: in those 80 expressions of interest…. Are we going to see those? Will they be in the public domain? Are we going to get a sense of what those expressions look like, what people are thinking about, and who's at the table?

Hon. R. Neufeld: I want to clarify something that maybe the member misunderstood when I talked about independent power producers — run of river and wind and all that. I don't think I…. If I did, I said it by mistake — about it being similar to actually using wood.

What I was trying to get to the member was that Hydro and the government didn't just design everything when we went out for those calls for green energy across the province that incorporated from the whole province all kinds of projects about run of the river and biomass and all those kinds of things.

What they did was work with that industry to figure out how they could make it happen. They actually talked to them first. They had workshops with those people first to draw on their expertise.

That's exactly what I'm saying to the member now, and that's exactly what they're doing in expressions of interest. They went out, and they got over 80 responses. What will happen from here on is that Hydro will work with those people that put those responses forward, those expressions of interest. I'm sure there's going to be an awful lot of discussion about how you're going to make it work — what will work, what won't work.

When you get everybody together in the same room and you have some stakeholder negotiations and discussions, then out of that process you will be able to design how a call should be made. Will it be perfect for everybody? No, it won't. But a call will be designed to actually facilitate people to bid into a process so that they know what they're bidding into.

First off, this is brand-new — almost brand-new, not completely brand-new. We have burned biomass — and we do in the Cariboo, as we speak — from mill sites. There's a whole bunch of things that will go into this. Before we decide or think that all those things are out there and you can't make it happen, let's first let the entrepreneurs get together — the companies that hold the tenure today, all those kind of things — and figure out how they can make it happen.

I kind of look from the positive side of the whole equation to think: this is a huge disaster. How do we deal with it? How do we actually try to have an industry? We need the electricity. It's green energy. How can we facilitate that in the most economical way we can, using the beetle wood and the wood that's left on the forest floor now to the best advantage that we possibly can for the people of British Columbia? I think that's an admirable way to actually go about this process and to try to figure out how we can do it and to involve those people that would hopefully be doing it for us in a positive way by coming forward with a call for biomass generation of electricity.

The member says: how far do you haul it before you have to figure out how much diesel fuel you're going to burn, and all those kind of things? I appreciate that, but we need to actually look at what we're going to do for the economy and how we're going to generate electricity. That will be part of it.

I think that we'll have some pretty good ideas. The forest industry itself is very interested. Before we think that they won't be able to do it, we should allow them to at least have an opportunity. I think the independent power producers are keen, but there are forest industries that I think are just as keen about doing it on their own. I don't know. Maybe there are some independent power producers and some first nations that have some projects they want to go forward with.

I think we should allow the time for the Crown and those groups that actually put forward the expressions of interest to actually figure out what they've got and to work through it, to see what will work best before we start laying this all out someplace for everybody to pick apart. I think those people actually put those expressions of interest in not haphazardly. I think they were pretty serious about it when they put those forward. We should let the process continue to make sure it happens.

B. Simpson: I just want to be crystal-clear. We need to move in this direction. There's no question. It has to be done. One of the major concerns expressed through my office — and I'm sure it's the same up in the Prince George area, etc. — is the amount of waste that's being left on the ground as we go and do these whole-scale salvage operations in the mountain pine beetle zones.

However, the conversation that I'm having with significant players in the industry is that yes, they've come to the table. They're not excited; they're nervous. They're very nervous about the direction the government is going to take to move in this direction, because they can take it in a direction that actually punishes the industry for the waste that's out on the ground by forcing them to bring it into a central repository.

The pellet industry is very nervous, because if it's not done properly, they don't get an opportunity to get in the game — if you go straight through to the power grid with this waste material. There are a lot of secondary manufacturers. For example, I was talking to somebody the other day that wants to get into a roundwood program, where we can avoid the softwood lumber agreement if we go into fence posts and various other things.

We have large tracts of juvenile stands that are dead. They're not big enough to merchandise for the normal dimension lumber, but they're great fence posts and rails and various other things. But he's not sure. If we put that into an energy tenure — if that's what the conversation is going on about — then we may miss an opportunity to get another by-product out of the forest. That's where the concern is that has been raised to me.

We do not disagree that this is a direction that we have to go in. The question is: how are we going to get there?

I want to clarify something that the minister said, because it was a question I was going to ask. Did the minister indicate that between the request for expressions of interest and the request for actual proposals, the strategy will be released? Did I hear that correctly?

Hon. R. Neufeld: I think you're referring to the bioenergy strategy. Is that correct? I think I left that very clear with the member. I don't have a date, and I won't say a date in here for when we will release that bioenergy strategy. We'll release it, and the member will know full well when we release that bioenergy strategy. We'll do it as quickly as we possibly can.

What's transpiring right now is the forest industry, the IPP industry and first nations are all working together in a process, after these expressions of interest, to see what we can do.

The member is more aware of — and I'm sure he is — the size of the beetle-wood kill out there. It's huge. I mean, I've heard it's about the size of Vancouver Island. So we're not trying to design something where we're going to go down and cut every tree off of in that land base and actually run it through an electrical generation facility.

I don't know how many facilities actually will make economic sense at the end of the day for the Crown, for the people of the province, but we must start somewhere. We can't continue to try to design something that says we're going to consume all these trees: how do we design it, and how do we get it into place right away?

We need to start with some projects that we can actually get off the ground — if, in fact, they make eco-

nomic sense at the end of the day. I'm hopeful that it does, and I think it will.

We also have to remember that it's not economic sense, probably, in the sense of what we can…. It isn't what we can generate from our old hydro generation facilities. This electricity is going to be relatively expensive, but also just leaving it standing there is relatively expensive too for British Columbia.

All of those things have to be taken into account. What I'm trying to say to the member is: let's see what we can get out of this. I don't know how many projects we'll get out of this. I doubt we'll get 80. I don't think for a minute we will. I think, actually, everybody's going to want to walk a little bit tentatively here — including the forest industry and the IPP industry and the first nations — to figure out how we can actually get something that works well and that we can model from there to move forward.

B. Simpson: Is there any contemplation of subsidies to start this industry off? Any contemplation of significant policy changes to allow people to access this resource for energy as opposed to forest products?

Hon. R. Neufeld: I think Forests estimates are still on. I'm sure the member has probably talked to the Minister of Forests about this. If he hasn't, I'm going to paraphrase what I heard him say when we made the announcement. He believes — and he's had lots of discussions with companies — that they want to make it work. He said clearly and publicly: "If I have to change something or change some policy to make it work, I'm willing to do that."

What that entails? Let's wait and see what it entails — if, in fact, it entails anything.

B. Simpson: That's interesting, because the ADM for this stated explicitly, at the forum for information on the request for expressions of interest, that there would be no policy changes. He was asked the question explicitly. He said: "No policy changes. The policy framework exists in order to do this." There's a different message there — and, hence, some of the uncertainty there.

I don't see how you can go to a request for proposals without the framework being presented to people, but I guess that's just me. I like to know the lay of the land.

Hon. R. Neufeld: You know, you're asking me some questions that you should actually be asking in Ministry of Forests. This is Ministry of Energy, Mines. I'm responsible for B.C. Hydro. We're talking about how we can actually facilitate pine beetle and waste wood on the forest floor — to burn it, instead of just letting it rot — to generate electricity. I think it's a remarkable way to look at some of these disastrous things that have happened on the land base.

I'm not here to pre-plan everything in this room or to pre-plan everything in another room on exactly how it's going to take place, because it's guaranteed that if you do that without the input from the people, it's going to fail. I'm not here to make it fail.

We have a different viewpoint. We want to use the entrepreneurship of the people out there, in the forest companies, in the IPP industry and the first nations to actually come together and figure out how we can do this in a reasonable fashion. I think the member would agree with me that that should be the way to go.

The member may wish…. I know that we think differently on a number of things. He may, if he was in my place, want to totally design this whole process. I think that would be a recipe for — I wouldn't say failure — some really different ideas to come forward, and for people saying: "Oh, that won't work; this won't work. I'm not going to do this; I'm not going to do that."

I've said clearly to the critic that I don't think this is a simple process. I never have said it's going to be a simple process. I never have said it's going to be easy, but by golly, we ought to be able to go out there and have faith in the people that work on the land base to actually come forward with some good ideas about how we can make it work. There's a disaster out there. We need to react to it. We need electricity. Let's see how we can do it in the best fashion possible.

B. Simpson: The minister overstates my case, as he is wont to do, and that's his right. What I'm trying to do is all that entrepreneurs generally want. They want to know the lay of the land. They want to know the regulatory framework. They're going to want to know the game that they're playing in before they invest their dollars — right? That's good business practice so that you don't get into a game that then shifts on you, and you get regulations that you cannot live with. Any entrepreneur worth his or her salt would want to know the lay of the land before they invest, and that's all I'm asking about.

I live in the heart of the mountain pine beetle. My community's one of the most threatened. My community's the one that's going to have to start running magic wood here very shortly, so I want to see solutions for it. What we're talking about is making sure we don't move in a direction that then takes us down a path we don't want to go to.

The Forest Practices Board has already expressed concern that we cannot issue tenures that go from trees to energy. That's a recipe for disaster, because over time you can shift away from productive work. You can shift away from getting employment from that land base, because all you're now going to do is to look at short-rotation farms to feed energy plants that have very few jobs relative to what you can get from a standing forest with all kinds of values. We're talking about the lay of the land and the regulatory framework, not an argument over entrepreneurship or the need to resolve this issue.

As a case in point, the minister mentioned that he had the lead; hence, I asked the question about policy changes in tenure. As a case in point, the Ministry of Forests and Range has already issued four tenures for pellets. We're not going to get four pellet plants because the tenure was wrong. It doesn't work. You cannot go from standing timber to pellets.

The industry told the minister this at the time. The industry said that this is not doable. Both the pellet industry and the solid-wood industry said it at the time. Yet we did it, and now we have four volume-based tenures out on the land base in which the trees are not available to other entrepreneurs who could do other things with them while we wait for this one company to see if they can make it work.

If you ask that company, they say: "We didn't want the tenures in the first place. Another tenure did not exist in this province for us to go to the bank and say that we had the fibre necessary to invest our money. We did it in the absence of something else existing." So the minister overstates my case on what I'm trying to get here.

A final question, and then I have to go, on first nations consultation. Will that be done in advance of the request for proposals, or will it be done on a case-by-case basis?

Hon. R. Neufeld: The request for proposals already went out, and they're back. Hydro received…. Not requests for proposals, expressions of interest; I'm sorry.

When they get down to actually having an energy call go out, there will be the normal first nations consultation process that takes place regardless of what happens on the land base. We're required to do it, and we'll do it.

J. Horgan: I want to move now with the minister into a bit of discussion around independent power. The minister will know that the Canadian Centre for Policy Alternatives released a report yesterday called Sticker Shock. He's probably aware…. In fact, I'm certain he'd be aware that Brian Wallace of Bull, Housser and Tupper, who will be familiar to the minister as counsel for large industrial users — and other talents, of course — has issued a report called Energy Plan II: Implications for Customers.

I wanted to engage in a bit of discussion with the minister. He knows that we have a fundamental disagreement on the balance of public versus private power in the mix. I disagreed with the government in 2002, and I disagree with them now. I certainly agree and believe that independent power has a role in the mix, but by constraining Hydro's opportunity to find new sources of supply and focusing only on one portion of the marketplace, it strikes me that…. I know that the minister and his associates don't like to interfere in the marketplace. We talked about that earlier on with respect to gas prices.

Brian Wallace — not a member of the New Democratic Party, I'm fairly confident — says, in his view: "By requiring B.C. Hydro to acquire more resources and simultaneously limiting the available source of energy, energy plan II may reduce competition and drive up costs." That would be costs to consumers. I'm wondering if the minister could comment on Mr. Wallace's assertion.

Hon. R. Neufeld: The member asked questions about someone's opinion, Mr. Wallace, who wrote a report on what will happen to energy prices. I think it's pretty clear that when you build new energy projects, obviously, the cost and the energy that come from that are going to be higher-priced than what we're accustomed to in British Columbia, because we've lived on plants that were built, some of them, up to 40 years ago. The cost that B.C. Hydro will pay and, in turn, charge to the ratepayers will be reflective of what it costs to build new projects.

We know that across Canada other jurisdictions are actually going out and getting some of the same kind of generation. Some jurisdictions that are actually doing it with their Crowns are paying the same price and, in some cases, more than what we are.

We want to actually maintain a good independent power producer industry in British Columbia. Competition will certainly help us in that respect with prices. We've also instructed B.C. Hydro to acquire 50 percent of their new incremental supply from conservation, and that's a high target. That's not building anything. That's not having to build one more megawatt on the land. They will accomplish that, and that's great for consumers in British Columbia.

The competition part of it, the 50-percent part of it and the part that Hydro is actually…. Well, they are going to start second-stage processes with Site C. We need to build some bigger, larger firm generation in the province. I don't know whether that will come to pass. Government has said that we're not sure.

What we need to do is to do the homework to first find that out and then make that decision some time in the future. They also have rebuilt some of their generation facilities, which they are encouraged to do right now, to modernize them so that they can generate more electricity. They are looking at Revelstoke right now. They're in the process of adding another generator, another 500 megawatts to that plant.

I think it's all relatively well-thought-out — how we'll provide electricity for people well into the future. I know there are those out there that don't like the private sector. Boom — it doesn't matter. It wouldn't matter what the private sector was doing. They just don't like it, because they think government can do everything better.

We tend to think a little bit differently. Hydro does a wonderful, great job. We're lucky we have a corporation like Hydro that keeps these lights on in British Columbia, that makes sure we have enough energy, that makes sure we don't have brownouts, that runs huge facilities and meets all of those requirements which have to be met to run those facilities. To go out

and build a five-megawatt run-of-the-river plant is not probably one of the things that they would say they have a lot of expertise in. But there are those out there that do.

I know the member and I do differ a little bit on independent power producers. It's kind of a change from the NDP of the 1990s. I've got pages of quotes. In fact, your House Leader right now talked eloquently, when he was in government, about how independent power producers were going to be everything that we need in the province, and we're going to continue to use them. In fact the NDP did sign contracts with independent power producers — quite a number of them.

I think it's surprising that that whole mindset has changed. I'm not sure it's really changed. I think maybe it's a little bit more about the political part of it than it is about the actual process of what we're doing, because I'm sure if we traded places — and I'm sure the member would like to do that, but there is always that opportunity at the next election — I can't imagine that the direction would probably be very much different.

We can talk a lot about whether we should have independent power producers or not, but I've got a lot of information. In fact, the critic was an adviser to my predecessor Dan Miller, when he was Premier of the province and Minister of Energy and Mines. In talking about independent power producers, I think he'd say the same thing today. We need them, and we should use them. We should have them provide some of the energy in the province for us.

J. Horgan: Firstly, I wouldn't put Brian Wallace in the camp of being opposed to the private sector, and I know the minister was making a blanket statement about those who are opposed to IPPs for the sake of opposition. I think there are some fairly valid arguments in the marketplace today about these issues.

I guess I am afflicted. The minister is right. Having spent some time in government, I understand the constraints and practicalities of making decisions, so I'm not one to bash away at the minister as others might.

One thing that frustrated me when I was in government and frustrates me now as an elected representative is that you can't speak your mind — the minister does, and I try to as well — without it being thrown back at you in some way to garnish a point or two here or there. That's why I quite enjoy having discussions with the minister. He doesn't see any value in that, and I'm grateful, because then we can have a discussion.

I gave the minister and the energy plan a B on the energy conservation component specifically. Some of my allies — not colleagues, but allies — in the political marketplace were incensed that I would speak what everyone would have to agree would be a fairly reasonable mark for a fairly ambitious target.

Because the minister doesn't beat me over the head with that, we are able to have a reasonable discussion. I appreciate that, and it's in that spirit that I raise these issues over the next hour or so when we talk about IPPs. As you said, I was involved with a government who signed contracts with independent power producers, and I do believe they have a role in the marketplace.

What does concern me are some of the issues that I've spoken about in the House before — the issue of self-sufficiency in an integrated…. We're changing hats here. I'm saying: don't interfere in the marketplace when it comes to electricity. The minister says to me: "Don't interfere in the marketplace when it comes to petroleum products." So it all depends on what hat you're wearing and where you're standing, I suppose.

In the electricity marketplace we are in an integrated market. B.C. Hydro has historically had comparative advantage and, in fact, market power on the west coast because of its abundance of resources and because of our ability to store power. The minister knows all that. His staff know all of that, and they know I know all of that.

The challenge for me is: why would we set a target of 2016 to be self-sufficient based on low-water years when certainly the snowpack being what it is this year, we're going to have at least a moderate- or high-water year? Brian Wallace's argument I accept, and I think if the minister stops for a minute to think about it, he would accept it as well. We're going into the marketplace to buy high-priced power. The cost of new energy supply is what it is. But we're buying more power than we need on the assumption that every water year is going to be a low-water year. That's his argument. I think it's a reasonable one.

On the issue of self-sufficiency, on the issue of buying almost exclusively new energy supply from independent power producers, does the minister agree with me and Mr. Wallace that you're artificially elevating the price, restricting the market by allowing only independent power producers within our borders to bid on these requests for proposals, and in fact putting a burden on consumers that may well be unnecessary?

Based on the Utilities Commission ruling on the Alcan deal…. I don't want the minister to bash me over the head about the commission. He can; I'll give him two minutes on bashing me on that. Otherwise, let's get back to: why push up the price unnecessarily and why the self-sufficiency with no real reason?

Hon. R. Neufeld: We differ on this, and I can understand that. I appreciate the member bringing forward these arguments. It's something similar to the gasoline price issue. We differ on this. We believe on this side of the House that we should be self-sufficient in the province of British Columbia within our own borders. We were self-sufficient from probably the mid-'60s forward, just other than for a few times in later years. But over the last, I think, five or six years we've been net importers.

We depended on the United States of America. We depended on Alberta for electricity. I can't imagine how we can make an argument that we need to actually have electricity generated in British Columbia for use by British Columbians but we wouldn't want to be self-sufficient.

We're not artificially driving up the price. When we look at prices across Canada — what other jurisdictions are buying energy for or what it's costing them to develop new energy; I'll use Hydro-Québec, for instance, in their wind energy programs — it's no different than what our prices are. They're doing it through their Crown corporation.

We're not artificially driving up the prices. What we are actually doing is creating an industry so that we can be competitive. I talked about that earlier. If you only have two or three bids going in, guess what. You're not competitive. If you've got 40 or 50 going in, you're probably going to be a little bit more competitive. There is a competitive nature out there in most things, and people want to be competitive.

Our prices are comparable — what Hydro has paid for in the last energy purchase agreements across British Columbia, as they compare to other jurisdictions. We want to actually keep that competitive nature here in the province. We want the entrepreneurship that comes with the IPPs.

Most of all…. You know what? I don't receive any letters. I don't think I've received one letter. Now that I've said it publicly, I'm sure there will be some people that are of a different political opinion than me who will write me a letter, and I don't really encourage that, but it happens. I haven't received any letters saying we shouldn't be self-sufficient. Nobody has told me: "Don't be self-sufficient." Nobody has said that. But I'll tell you what they have said in the letters that I've got: "I'm happy that we're going to be self-sufficient. I wasn't aware we were dependent on someone else for our electricity."

As I understand what happens — and I think the member will agree with me here — if in fact the United States, south of us, doesn't have the energy to send us, and we're dependent on them, whose lights are going out? Washington's or ours? I've got a pretty good answer for that. I think it's ours — if, hypothetically, that could ever happen.

For all those years…. Your party has actually talked very glowingly about W.A.C. Bennett and his vision for the province in building the dams. Did it cause some problems? The member and I will agree that yes, it did. But by golly, we were pretty lucky that someone actually went out there and thought about doing that — totally flooded the market with electricity at that period of time — and had to pre-sell it all into the U.S. to be able to facilitate the dams that were built even to help them with flood control and to generate electricity.

We think it's important to be energy self-sufficient. When you think about climate change…. The member and I have had a pretty long discussion about climate change. Although this year we're going to see a lot more water than we normally do where I live, the W.A.C. Bennett Dam is there. It's the largest one in the system. This year we've got lots of snow, lots of water. In fact, we'll probably have too much, just like everybody else does.

But by golly, that wasn't the case over the last number of years. We went through some pretty severe droughts. We didn't have lots of water all the time. We went through some pretty severe droughts in the Columbia system. This year I think we'll have lots of water in the Columbia system too. I'm not exactly sure how much it will be, but when we do the B.C. Hydro estimates, I'm sure that they'll have those numbers.

Droughts can come as quickly as the snow did this last year and as the precipitation that we received. We think it's prudent. We looked at all…. Whether you use critical water, normal water or excess water, we said: "Let's err on the side of caution, and let's actually use critical water as the base. By 2016 we ought to generate enough electricity in the province to keep our lights on, to keep our industries going and to keep our people warm in British Columbia, if in fact something goes wrong someplace else, and we shouldn't be dependent on them."

Are we interconnected? You're darn right we are. It's to our advantage to be interconnected. We've been interconnected from the start, and that's a huge advantage to the province too. If in fact we have some electricity, what's wrong with selling it? You know, selling it across the border is exactly what took place when the last government was here during the '90s, and it's what takes place now in trade.

J. Horgan: I know the minister shouldn't be overly concerned about mail as a result of our interactions. I think we're up against Oprah right now, and then a hockey game. Other than my wife and your wife and those that are forced to be here by employment or duty, I don't think anybody's watching. Nonetheless, I enjoyed this discussion, and this is in fact what I've been looking forward to most of all since I was appointed critic.

Electricity's my thing. I like it. I get excited about it. It's pretty dry stuff, I know. The person behind your right shoulder knows more about it than both of us put together. So I'm not going to pretend to get anything past you while he's sitting there.

However, it's apple pie to say we need to be self-sufficient. Who could argue with that? That's the challenge about reframing debates and discussions like this for public policy purposes: "I think we should be self-sufficient." Well, of course we should be. However, have you factored in the cost of being self-sufficient? Have you factored in the need for excess supply? If you do have excess supply, then is it just for export?

That, then, brings up the argument that Dr. Calvert has raised with respect to IPPs and an overdependence on IPPs at this stage in the development of our system. If you overdevelop them, then that inevitably will become export power. If it's export power, then you've overbuilt in those high-water years, unnecessarily burdened customers — which your able ADM would probably be able to argue quite capably at the commission — and, therefore, would reject some of these contracts when they come forward.

I note from Mr. Wallace's presentation that B.C. Hydro's purchases from IPPs in the 2003 call suffered

severe attrition. In the 2003 call B.C. Hydro entered into 16 contracts for 1,800 gigawatts. To date, two projects for 40 gigawatts have delivered electricity to B.C. Hydro.

I'm not slagging IPPs here, but that's not a great rate, and the call in 2006 for 7,200 gigawatts could lead to a similar attrition rate. Therefore, our effort to become self-sufficient won't be realized, but we will have been signing long-term contracts with independent power producers to purchase power that we may not ever use if we've got a high-water year.

The argument that we've had some drought…. I can't argue with the weather. The data are there. You have the staff providing you that on a daily basis. I'm hopeful. At least, they used to do it on an almost daily basis, at this time of year particularly, so that the Minister of Finance can make her projections for what revenues are going to be, based on our ability to trade and so on. But my understanding is that even in the low-water years that we've had to this point in time, we've been able to meet our domestic load at peak times with domestic supply. So I'm wondering if you could explain to me….

Again, I'm paying attention. There are those — your spouse and my spouse — who are watching and probably don't care, but there may be people who do read the transcripts when we're concluded here. Could you explain to me: when was the point that we became net importers? How do you disaggregate our extensive trading process, which gives us the market power that I talked about earlier and provides enormous revenues to the Minister of Finance, from the notion of being a net importer?

Hon. R. Neufeld: We've just asked the B.C. Hydro person, Bev Van Ruyven, to come forward and help us a little bit with the numbers that you requested. Just give us a minute to get those import numbers.

They were net import for domestic use, I think. If I remember correctly, it's the last five years. Prior to that the province also had a few years where it was a net importer. You know what? Hydro runs this marvellous, huge system; I don't. There are people that actually know how to run that system very well and how to do it to the best advantage. I'm sure the member is fully aware of that from his previous experience with B.C. Hydro. When they tell me that we have been net importers for domestic use, I don't try to go and figure out every number that they came up with. I assume — and I think the member would assume and agree — that those numbers are the numbers that the Crown has put forward as being net importers.

We've got a ways to go. The member talked about attrition. That is a problem. I mean, attrition was a problem when the NDP was making calls. In fact, I know where they had, I think, 40-some responses to one call and got about two out. That's no offence to the member or to the government of the day. It's in fact real. It's in fact true. It happens.

What we tried to do in the last call is we changed it a bit. Hydro worked very much with the independent power producers to see what they could do to try and alleviate this process or to fix it up.

I know that in this call there is a significant upfront payment, depending on the size of it — that a company that wants to generate electricity and get an electricity purchase agreement has to put up front — which says, "Yes, here are a number of millions of dollars I'll put up front to guarantee that I will be able to build this project," understanding that they have to go through all the environmental processes. That actually — how should I say it? — cuts out the real ones from some that might not be able to get there, because people do put an awful lot of money on the line. Some of those are public companies, and I'm sure that their shareholders are going to want them to actually perform.

They've given me the numbers. In 1996 net imports were 1,452 gigawatt hours; in 2001, 1,993. This stuff I can also give to you; there is no problem there. In 2002, 5,238; in 2003, 1,754; in 2004, 5,118; in 2005, 7,381; in 2006, 4,352. There is a forecast for 2007, but because we've got lots of water, who knows what that forecast is going to be.

J. Horgan: I am pleased that B.C. Hydro is here. I was kind of resisting having discussions about Resource Smart and Site C and other supply issues. I know we're going to be going at that in a bit more detail. I don't know if you want to do that now…. I mean, I can carry on, on the IPPs and some of the issues that Mr. Wallace raises and then have a more dedicated discussion with Hydro tomorrow along that line.

I didn't realize the 7,000 gigawatts in 2005. The data that I was looking at was 2004, so that's a significant number. Perhaps then, while you have the aid of B.C. Hydro, could you explain to me if that import of 7,000 gigawatts was done at any particular time during the day? Was it to meet peak load, or was it at other times during the day?

Hon. R. Neufeld: We don't have that information, when all that trading was actually done. I think the member is well aware, as Hydro just pointed out to me, that they trade electricity on an hourly basis, 24 hours a day, seven days a week, 365 days a year. To provide enough electricity for British Columbia's domestic use, that was the net difference more that they had to import than what they sold. That's how they gather that number of being net importers.

J. Horgan: I thank the minister. I guess that's why, because of my understanding of how Powerex operates and how the system worked when I was paying careful attention…. I'm not casual now, but I was being paid

With Powerex's ability to trade at certain times, to store and move power when it's most advantageous economically to do so, I guess because I was predisposed to think of Powerex as a positive net benefit to the province — a net benefit, certainly, to B.C. Hydro in terms of its ability to manage the system — when the discussion started about, "We are net importers; this is a terrible thing; we must immediately become self-sufficient or self-sufficient in an eight-year period," I had my doubts.

As a skeptic, that's why I'm raising these questions. I'm concerned that the public is being left with the impression that if we don't build power right away, the lights are going to go out. I'm not entirely convinced that that's true. I'm open to being convinced though.

I guess in the form of a question, for Alex Trebek, what is the 2016 date? Why did you select that date? Based on no new energy supply, do projections concern the minister and B.C. Hydro to the extent that the minister feels that the self-sufficiency policy must be instituted so we don't turn the lights off in 2017?

Hon. R. Neufeld: Let me say that I think the member would agree with me, when he spoke earlier about the number of projects that weren't built through attrition in calls that were made under this administration and also the administration previous to us in the ten years that they were there.

What we need to do is make sure…. The lead time required to actually get a project built is unbelievable, and it gets longer. I'm sure the member would agree with me. Just think about trying to get transmission lines over to Vancouver Island or get electricity onto Vancouver Island in some way to make sure that we have enough electricity for Vancouver Island.

I don't believe that in October…. I shouldn't say I don't believe. The engineers say by October of 2008 is when the cables that are there now — and I'm using this as an example over to Vancouver Island — will actually reach the end of their absolute life. Does that mean that the 31st day of October the lights would go out? No. But you have to have a target, and you have to have a time frame to work to.

That's the same with generation. When you need to build new transmission to actually bring that new generation to where the people live in the lower mainland, when you think about beefing up the interior lower mainland transmission lines, that takes a long lead time, as does building generations.

What we're saying is we're giving ourselves ten years — we're giving Hydro not quite, but almost, ten years — to actually get to a position of being self-sufficient. We need to do that by actually acquiring new IPPs and building some new processes — lots of conservation; 50 percent conservation.

When you look at the IEP, the integrated electricity plan, that Hydro did that says by the year 2024…. Is that 25 years from now? No. It's 25 to 45 percent more. That equates to, if I remember correctly, 30,000 gigawatt hours. So if they acquire 50 percent of that through conservation, that still means another 15,000 gigawatt hours that have to be built to actually make sure that we can keep our lights on.

The member raises another interesting point. Would we be able to…? If in fact, let's hypothetically say — Washington, California — nobody down there can sell us any, and nobody in Alberta can sell us any, would we be able to actually keep our lights on? Yeah, we would draw our reservoirs down. I'm sure the member has been told, as I have, that we can draw the reservoirs down an awful lot and generate electricity. But that has some huge repercussions for quite a few years out.

What Hydro has to do, even though there might be lots of water, is make sure they manage that water well into the future — not just on a six-month basis, an eight-month basis or a 12-month basis. They try to guess what the weather is going to be in the future as best they possibly can through a whole host of processes.

If we absolutely had to, could we draw down that big reservoir up there in the Williston reservoir? Yes, we could. But it would have some repercussions later on, somehow. You can't run that forever that way. So it's managing all of those — and it's the same with the Columbia system — in the best interests of British Columbia so that we make sure we have that energy there, and we can call on it when we need it.

They are having trouble meeting peak load. In fact, the highest peak I think they had was last year. That should bother anybody that deals with electricity. When you can't meet your peak load, to make sure that you've got all of that energy there all the time…. You and I will certainly hear about it — me more than you, if the lights go out.

We are not trying to go out there to build things that we don't need. That's ridiculous. I live in the northeast, and I say it quite often. I live there. Why would I say: "We should build a dam for the fun of it. We don't really need it. Let's just build it."

That's not the way this government operates, and that's not the way the Crown corporation operates. We need to make sure that we are self-sufficient in the province so that we can actually look after our own needs. If, in fact, we have an opportunity to sell some extra hydro…. It worked for 40 years. It was really beneficial for British Columbia for all those years, so why wouldn't it be beneficial in the future?

J. Horgan: I do agree with much of what the minister said. But the challenge with the policy decision that's been made to become self-sufficient by a set date…. In any marketplace, if you go…. There have been positive responses to the call in 2006, and I'm sure that there will be a similar positive response in 2007.

We've already talked to canvass the bioenergy issue. The marketplace appears to be prepared to respond to the call for energy. However, when you set a constraint, an end date, to achieve that result, I think you are giving those that are bidding a bit of a leg up. Perhaps a few more dollars per megawatt hour might fit the bill for the bid and may well unnecessarily line the pockets of those investors.

That's the point that Brian Wallace has been making. If you are basing the self-sufficiency need on low-water years, and you are building in a cushion to that as well — I believe a 3,000 gigawatt cushion — then, with respect to this issue, he concludes…. I'll just read it for the record:

That sort of argument is exactly what Brian Wallace and his clients will want to take to the Utilities Commission as these purchase agreements come forward. We can anticipate the arguments coming from the industry sector. We can anticipate what citizens groups are going to say, and we can anticipate what others are going to say at the commission. Not to prejudge what the result will be, but based on a pre-emptive strike eight years beforehand from the pre-eminent lawyer for industrial customers, it strikes me that we should start to reflect that perhaps the policy might need to be tweaked a little bit.

I'm wondering — in the form of a question — if the minister would agree with Mr. Wallace that providing a cushion and basing your self-sufficiency on critical water years might be misjudging the market and artificially inflating the costs that we'll have to pay.

Hon. R. Neufeld: No, I don't agree with that. Mr. Wallace is perfectly welcome to make that decision, to say that and to come before the commission and make those arguments.

That's the other thing that is wonderful in British Columbia. We re-empowered the B.C. Utilities Commission to actually look after B.C. Hydro and other entities here in the province. They not only have to meet the goals that the Crown has in place, that the energy plan puts out, but they'll have to actually clear a hurdle at the B.C. Utilities Commission which reviews all of this in full length.

I know the member has been there a few times. In fact, when I talked to our previous commissioner, he informed me that once in a while it can get pretty dry. There are lots of numbers and lots of discussion going on.

So 2016 is the date that we said we want to be self-sufficient. We didn't say we needed that extra 3,000 gigawatt hours by 2016 but some time a little bit later on. But what we need to do is be self-sufficient by 2016.

There will be people that will argue on one side; there will be people that will argue on the other side. John Calvert came out with a report, and we all know where that comes from. I mean, he's still on the B.C. Citizens for Public Power and now with the Canadian Centre for Policy Alternatives: the sky is falling and everything's gone wrong.

That one I discount more than anything, but Mr. Wallace brings forward some good points, and I'm sure that he will make those points known when he needs to do it. We think that it's the right thing to do to become energy self-sufficient in British Columbia, and we will continue to strive to get to that goal because we want to keep our lights on in B.C.

J. Horgan: We talked about the cost of new energy supply superficially. I have some data. The heritage contract is in the range of $23 a megawatt hour. The IPP package that was just run through in 2006 averaged $86 a megawatt hour. There is an expectation that these prices for the independent power will rise further in the next call. But the spot markets….

Again, I understand that the minister doesn't want to rely on the spot market. He doesn't want to hedge the bets for electricity users in British Columbia, but it's been a fairly effective system for B.C. Hydro in terms of the average price in the first three quarters of 2007. I understand it was $41 a megawatt hour. So to buy short-term at $41 a megawatt hour rather than long-term, in some instances, interruptible power at $86 a megawatt hour, again, doesn't seem to make a lot of economic sense. For the party on the other side that prides itself on being sound fiscal managers, these issues cause me some concern.

I believe that we had the jewel of North America with B.C. Hydro in 2001 and 2002, leading into the first energy plan. It was a case of, "If it weren't broke, you shouldn't have fixed it," in terms of constricting Hydro's ability to build new supply. That's changing now, and going into phase 2 on Site C, I think, is a positive step. Obviously, we had the Resource Smart projects that were not constrained, I don't believe, by the energy plan — you can correct me if I'm wrong there — but I think that Hydro has always been able to look at Mica and Revelstoke and other assets to increase energy and capacity.

It seems to be a disconnect. I'd be happy to defend John Calvert. I find him to be another one of those brilliant people who work in this sector. He's a very, very smart guy. He spends a lot of time thinking about this. He comes from a certain perspective. I don't disagree with the minister in that regard, and I know the minister wasn't suggesting that he didn't know what he was talking about. He's just talking about it from a different idiom, if you will, and that's why we're here. I think his contribution has been extremely valuable.

Brian Wallace and others…. And I think I said after the Alcan hearings: "Mothers, don't let your babies grow up to be regulatory lawyers." That was not to slight the regulatory lawyers, but it's tough work, and it's not the work that the minister and I can do. I think we're better suited to this sort of thing, and that's why

we're doing it. But thank goodness they're there. The arguments that Brian Wallace makes are compelling and, I believe, will have an impact on how B.C. Hydro operates into the future.

It had a comparative advantage in the marketplace. By having to pay unnecessarily, potentially, to achieve a self-sufficiency policy in an integrated marketplace is wrong-headed, in my mind. I think we could have achieved what the minister wanted to achieve, or what the minister is trying to achieve in terms of reviving the marketplace and establishing the independent power community on solid footing in British Columbia — nothing wrong with that. I don't have a problem with that. I do have some issues around the contracts, the length of the contracts and what happens after that.

I'm going to shift ground, if I can, hon. Chair, back to a comment the minister made when we discussed compliance and the Tumbler Ridge project — that there were confidentiality agreements in place on those two projects. I'm assuming that they're looking at what legal actions they may well have to contemplate, having energy purchase agreements that are no longer, I believe, in force.

So why don't I just start by asking: what do you do when you are not allowed to burn coal and you have a contract to burn coal?

Hon. R. Neufeld: I just want to have a few comments on the part about self-sufficiency. Obviously, there is a huge difference in the member's thought process about whether British Columbia should be self-sufficient in electricity. I know that there are a number of things around that.

I don't think I want to be dependent on the United States or Alberta for our electricity. I know we're in an integrated system. We've been in an integrated system since the '70s. It's worked well for the province. It is a jewel. We want to continue to have it that way.

The member's party wishes to depend on the U.S. for electricity. I don't. That's a significant difference in opinion. This side of the House and the government thinks that we have all kinds of opportunities in the province to generate our own electricity — to cause some economic activity in the province to generate our own electricity and actually create jobs and all the things that go along with it and have that security well into the future.

I would much rather have that blanket around British Columbia — being energy self-sufficient — than what the member talks about: being dependent on the U.S.A. It's totally different — I guess, politically different.

It kind of surprises me that the member has the strong opinion that we should be dependent on those south of the border for our electricity, when you think about all the other things that have been talked about in the Legislature — about how we should be self-sufficient in British Columbia for other things and how we shouldn't export logs and those kinds of things.

The other thing that we are obviously very different on…. Then there are two things that come out of this discussion. One is that we believe in IPPs. We believe in the private sector actually being able to go out there and build small plants across the province to provide electricity.

The opposition thinks it should be B.C. Hydro. Now, there is nothing wrong with B.C. Hydro. They can actually do it at the end of the day if in fact somebody wanted to — if the opposition were elected again and wanted to come in and instruct B.C. Hydro to do that. That's not their track record.

Their track record is that they wanted to use IPPs. In fact, they signed some pretty huge contracts with some IPPs in the province. ICP up-Island is one. They signed a contract with a power producer in Fort St. John — those kinds of things. So they did at one time believe that we should use independent power producers.

But to be fair, I think that right now part of it is more politics than anything else. It's not about reality. It's about politics and that the government can build better.

Mr. Calvert certainly tends to say that in his report, in anything that I've heard him or the B.C. Citizens for Public Power say. In fact, some of the things they say…. He's a bright man. There is no doubt about it. I would never say he isn't. But it's amazing to me, some of the things he says, like, "You're selling your rivers," and: "You're selling this, and you're selling that." It's an interesting perspective to have.

So on that energy self-sufficiency…. I guess those are the two things that I would say we differ on. I think that the critic and I actually agree at the end of the day that we need to generate enough electricity to be able to be self-sufficient and keep our lights on. I'd be surprised if he doesn't. It's just that we think differently about how we go about it.

The question in regards to the two contracts — one that was going in Princeton and one in the northeast in regards to coal. As I said, there is a confidentiality agreement between both of those companies — between B.C. Hydro and, obviously, government and those companies — in researching what their options are. I think we talked briefly about that before. I think that part is not a secret. The one in Princeton was going to burn, I think, up to 40 percent wood in the first place, and I believe that they are seriously considering looking at what they can do to build a 100-percent biomass facility.

The other one…. I don't think there has been any comment from the company. I'm sure they're reviewing the policy that we now have — that you can burn coal if you want.

We're not saying: "Don't burn coal." You just have to sequester the CO₂. You either put it back in the earth, or you put it in a pipeline and use it someplace else for some other purpose. I'm sure they're looking at that, as they are in other parts of the U.S. There are a number of places that are seriously looking at sequestration in the production of electricity by burning coal. There's one in Saskatchewan that's happening. They're in that process right now.

It's not unreal. It's not pie in the sky. It actually could happen. We haven't eliminated coal. We've just

said that this is what you need to do with it. The ability to burn coal to generate electricity in British Columbia has always been there. In fact, a number of years ago Hydro was looking at burning coal at Hat Creek. It didn't come to fruition, but using coal to generate electricity has always been available out there, and it still is. It's just that the regulations are a little tougher.

J. Horgan: Firstly, just for the record, I'm not opposed to self-sufficiency. What I've been opposed to — and perhaps I should have been clearer — is setting a deadline. I think we always strive, in all of our endeavours — whether it be in this place, in industry or in our personal lives — to take care of ourselves. But we don't say: "Well, I'm going to pay off this mortgage next year, because then I don't have any more mortgage payments." It's not practical to do so.

My argument has been: we absolutely want to be self-sufficient. We want to ensure that we can take care of ourselves. But setting a date gives a benefit to those who are providing the service or the energy to us by saying: "They've tied their hands here, they've compelled themselves to a result, and that is a benefit to me, the supplier." That's my argument.

I don't disagree. Obviously, we don't want to be dependent on anyone. No one does. The minister is nodding, so I know he understands my point. My point has been that by setting a date, you've constrained Hydro's ability to manage the system as they believe and as they have done in the past. I think that that was wrong. There you go.

Brian Wallace agrees. There you go. We may not agree often, so I'm taking the advantage. If Brian reads the transcript — and I'm sure he will — then I agree with you, Brian. We're artificially entering into territory that we don't necessarily have to.

In terms of the confidentiality agreement that the minister referenced…. First of all, the question: when was it signed? Is it only with the two coal plants, or are all of the companies that have energy purchase agreements also in the same situation?

Hon. R. Neufeld: I'm informed that AES — that was Wapiti; that was the one up north in Tumbler — was signed just last week sometime, and Compliance signed one three months ago. They still both have energy purchase agreements with B.C. Hydro.

Chair, I wonder if we could just take about a five-minute break, if that's okay?

J. Horgan: We were just discussing the confidentiality agreements that were signed by AES and compliance with respect to how they work through their issues with B.C. Hydro — whether they're able to sequester or find some other alternatives.

I'd like to then move to some of the other IPPs that signed contracts or had contracts approved by the commission last September. Some of the discussion that I've had with Dr. Calvert and others is a concern that when these contracts expire…. I'm not going to pick any one in particular; we could just do it at a higher level. When these contracts expire, it's been argued by some that Hydro has first right of refusal to renew. I'm wondering if the minister can confirm that.

Hon. R. Neufeld: I'm informed that for instance, an average wind-powered tower — let's say tower and just use one — lasts about 20 years, regularly running, and then they need some major rehabilitation. The usual rehabilitation that takes place in, let's say, a run-of-the-river or a biomass facility could be up to 40 years, and it would be fair to say it requires a fair amount of rebuilding. The contracts, I believe, are written in 40-year terms. They expire at different times so that they don't all expire at once. I don't think Hydro, simply, would want to actually start all that process over with 40, 50 or 20 of them all at the same time. You'd want to stagger it around a little bit, so there are different lengths or different terms in years for them.

I know — and maybe I'm presuming what the next question will be — Mr. Calvert has talked about how all these facilities will just automatically sell into the U.S. The other argument he uses is that you can buy it a lot cheaper from the U.S. Those two don't meet for me — you know? What he says is that you can buy electricity way cheaper in the U.S. than you can build it here. That being the case, why would someone here want to take an expensive piece of equipment and export it into that cheap market?

I think the other thing is that — and I'm sure the member is aware of this, and in fact I know he is — selling electricity into the integrated system south of the border, buying and selling it, is highly complex. That's why Powerex actually was created to do that job. It's difficult to do, especially with congestion south of the border. There is an awful lot of congestion down there. To think that someone who has a small plant that's generating about ten megawatts of electricity is going to go to California and say: "Hey, by the way, I've got ten megs I can sell you. I don't know how I'm going to get it down there, but I can do that…." I don't think that would happen.

On the other hand, you could get a bunch of independent power producers together to actually export electricity, maybe through their own Powerex system south of the border.

I will go back to the '90s again. This isn't meant to be anything but fact. Glen Clark, Premier of the province under the NDP, made a statement that: "Yes, we've opened up our transmission lines. Yes, we're going to use independent power producers. Yes, if they want to generate electricity in the province, our lines are open. They can send it right down to the U.S., and

The idea that now — all of a sudden, when all those contracts come due — these companies would all actually opt to sell south of the border is to me a bit foreign. Right now what they're trying to do is get an energy purchase agreement with the Crown. That's the way they get their financing. They've got an energy purchase agreement for 20, 30 or 40 years. That's actually good capital to have so that they can go out and build that facility.

They don't have to worry about selling it. They don't have to worry about transmitting it. They don't have to worry about buying time on transmission lines someplace in Oregon or in California. They can actually sell it to the Crown. They know they're going to get their money. If the Crown isn't paying their bill, I think we're all in trouble. So I would suspect that most of them will have a very good relationship with B.C. Hydro and will actually want to re-evaluate those contracts and continue to be able to sell into the system in British Columbia.

J. Horgan: I didn't hear a specific answer to my question, but I'll pose the question, and then I'll skate a little bit more. You did assume my second question, so that's good. You've answered that. I won't have to ask it.

I wanted to know about the right of first refusal, not so much on wind power but particularly on the run-of-the-river. The issue that we're hearing…. The minister will know. He would have got some mail around Bill 30 last year, in the last session, with respect to independent power producers in the Squamish area and municipal concerns about planning — their ability to plan. That led to the bill, and we had some debate about that, and it has now come and gone.

But the notion that 20 or 30 years from now, as we go into a climate change environment, we have this abundance of run-of-the-river opportunity…. We have the opportunity to create small projects — ten, 20, 30 megs. Over time, if the value of that power…. This is Dr. Calvert's argument — that you can buy the power today more cheaply than you can buy it from the new…. That's the cost of a new energy supply. We've talked about that, the CONES and the spot market.

His argument is that 20 years from now the value of that water will be far greater than the cost of that water to the producer. In essence, if we don't address the water rental issue and tie it in some way as independent power flourishes…. And now when we have Alcan and potentially Cominco — large producers paying minimal water rentals and generating enormous revenue from the commodity — then that disconnect is, I think, where Dr. Calvert starts from. That certainly resonates with me on the large IPPs like Alcan and Cominco.

On these small plants that are being developed now and will be developed in the future, if there is a concentration of ownership or a consolidation of those small plants into one larger private entity — which is not unusual in these situations; the minister can contemplate that as a possibility in the future — then when you are putting your electricity into the grid, your ten megs here and your 20 megs there, it all of the sudden becomes 300 or 400 or 500 megs owned by one company, potentially. It could well be going straight to Orange County rather than to achieve the self-sufficiency issues that we talked about earlier.

The argument that I make and Dr. Calvert and others make is that we need to be forward-looking. The minister has talked about wanting to be forward-looking on self-sufficiency and on other issues. If we assume that this power can be sold elsewhere…. That is just getting it into the grid where it's distributed, and we'll have to address transmission challenges south of the border if we are going to continue to export — and internally. We'll talk about that when BCTC is here.

If we can contemplate a world where we have a proliferation of IPPs, their contracts expire and the product is extremely valuable in a climate change environment — and there would be no requirement for carbon credits or carbon taxes — I would think that that is a premium product. The ability for Hydro to purchase that may be lost unless those contracts contain a right of first refusal today. I'm wondering if they do. These are on the water projects alone.

Again, I'm not trying to use Mr. Calvert, but let me go back a little bit here. The member talked about water rental rates, and those kinds of things. Most of the run-of-the-river are in the 40-year term. They are smaller plants. I guess you can think about all kinds of things that could happen: gee whiz, this would be terrible if we just put all this together, and that's what is going to happen. I appreciate that he's looking into the crystal ball out there 40 years. I'm not exactly sure what's going to happen in 40 years, to be perfectly honest, but I might still be here answering questions. You never know.

The 40-year term, the water licences, interestingly enough, are right close to that. Not only do they have to rebuild their plant, usually, because 40 years is — Hydro tells me, and I believe them — the general life span of some of these small run-of-the-river projects, where they need not total rebuild but some major rebuild, the same as the Crown's assets do. They would also have to renegotiate a water licence. I mean, there is that that they have to do.

No, Hydro doesn't have first right of refusal to buy them. I think I explained before that because of the length of the contracts and what happens, they wear out and they have to rebuild them. The other thing is that if they did…. I'm informed that maybe if they have first right of refusal, a contractor or maybe all of them would say: "I'm not going to maintain this as well as I normally would." It might be a pile of junk that's returned back to the Crown, using that process.

Water licences are interesting to me. Actually, we'll touch on it a little bit, but that responsibility is with the

When you talk about Alcan and Cominco…. I'll refer to Alcan. The water rental rate that Alcan pays is the rental rate that was agreed to in the 1950 agreement, and it's tied to the price of aluminum. It wasn't changed during the 1990s. I don't know. All of a sudden, today, we should change it or think about it. Well, that part is interesting to me.

The other thing is that if Alcan…. The member probably knows this too. One of the largest sales of electricity out of Alcan happened in the 1990s under the ALTEPA agreement. They pay the same rate Hydro would for generating electricity if they're selling it for domestic or export purposes. So that's in place for them to actually do that.

The other interesting thing for me is that when we talk about independent power producers, and it just seems to be a dogma with the B.C. Liberals…. In fact, interestingly enough, I located an OIC that was signed in August of 2000 — we weren't in government at that time — that cut the water rental rates for IPPs by 57 percent. That wasn't our government. That was the previous government. That was a group that Mr. Calvert is very closely associated with.

Those things are interesting when they keep popping up. I know that we might have a difference of opinion about using independent power producers to actually generate a lot of our electricity in the province. But I think — and I'm almost thinking that a government in the 1990s thought the same way — that it's not a bad way to do it.

J. Horgan: Certainly, if Alcan was confined to the business of smelting aluminum, then tying the water rental to that activity would be reasonable. But now, after argument from the government across the way in court that they are free to sell their electricity wherever they want to, I think you might want to reassess that water rental.

I know this isn't the place to do that, but it's certainly a cause for concern. If you're smelting aluminum and creating jobs in the northwest in exchange for owning a river or virtually owning a river, that's one thing. But smelting half as much aluminum, hiring half as many people and exporting twice as much power…. I have a problem with that. We'll agree to disagree and maybe pick this up at another time.

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