Hansard — Thursday, April 26, 2007 a.m.

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

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY


CONTENTS

	Routine Proceedings
		Page


Committee of Supply		7179
	Estimates: Ministry of Environment and Minister Responsible for Water Stewardship and Sustainable Communities (continued)
	S. Simpson
	Hon. B. Penner
	B. Simpson

Tabling Documents		7188
	Office of the Auditor General, report No. 1, 2007-2008, Special Audit Report to the Speaker: The Financial Framework Supporting the Legislative Assembly

Proceedings in the Douglas Fir Room

Committee of Supply		7189
	Estimates: Ministry of Energy, Mines and Petroleum Resources (continued)
	J. Horgan
	Hon. R. Neufeld
	R. Austin
	C. Trevena

Hon. G. Abbott: In this chamber I call continuing estimates of the Ministry of Environment and in Committee A, continued estimates of the Ministry of Energy, Mines and Petroleum Resources.

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

S. Simpson: This morning and probably into this afternoon, I hope we're going to be having discussions related to climate change matters. Should we get through those questions, we would then move to questions related to the environmental assessment process.

We finished off yesterday. We just got the opportunity to ask the first questions. I'm going to get us back to the direction that we were starting down yesterday as we came to adjournment.

I wonder if the minister could elaborate a little bit. He speaks in his service plan about the Ministry of Environment being the lead ministry on the file of climate change. Could the minister elaborate on what it means to be the lead ministry, considering that there are these other processes in place, including the cabinet committee chaired by the Premier?

Hon. B. Penner: To pick up where we left off yesterday and to repeat what I said, the Ministry of Environment is the lead ministry for preparing legislation and possible regulations to put into effect our climate change objectives in terms of reducing greenhouse gas emissions by 33 percent by 2020 and any interim targets that will be established for 2012 and 2016.

We do, as the member knows, have a climate change section within the Ministry of Environment. The staff working there have been instrumental in developing the government's objectives to date. We recognize, however, that additional staff resources will be required to assist all ministries of government achieve our objectives through implementation of the plan that we're developing. That's why we're adding extra resources in this year's budget, which the member knows about — $4 million for four FTEs to provide additional resources to work with an implementation plan.

S. Simpson: The minister spoke about legislation — that the ministry, as the lead ministry, would have responsibility for the development of legislation and regulations related to this.

I could be corrected, but I do believe I've heard the minister…. I certainly know I've heard the Premier, shortly after the throne speech…. When he was questioned about the need for legislation, he suggested at that time that it was his belief that many of the goals of the throne speech could be accomplished without legislation but through other vehicles or avenues that were open to the government.

Could the minister tell us: is the minister contemplating legislation around the targets and achieving those targets?

Hon. B. Penner: There are a number of different instruments and things we can do to help achieve our objectives. As the member will know, the throne speech set out a number of specific items. I can refer to a few here.

For example, we're establishing, effective immediately with the throne speech, government policy around carbon capture and sequestration for any proposals related to coal-fired electricity generation. The environmental assessment office takes its direction from government policy, and they take into account government policy when they're considering proposals. That policy went into effect immediately upon the announcement in the throne speech. So that's in effect already, without legislation or regulation.

We did also make a specific commitment around working towards a 30-percent reduction in tailpipe emissions from motor vehicles by 2016. That, I would anticipate, would require some regulatory changes. We'll be working on that within the Ministry of Environment.

There are other objectives as well. Some may require legislation, some may be done through regulation, and some may be accomplished simply through government policy.

S. Simpson: Clearly, the most significant position enunciated and outlined in the throne speech was the 33-percent reduction by 2020. That's the reduction that most of the rest of this work is all built around. Could the minister tell us: does he anticipate requiring or putting legislation in place that will in fact make it law that we accomplish that reduction by 2020?

Hon. B. Penner: As I indicated earlier, there are a number of ways that government can reach its objectives, depending on the particular issue. We can utilize

government policy, we can look to regulation, or we can look to legislation. Effective already, that 33-percent reduction is government policy. That's a policy that we've already adopted.

We did say in the throne speech that we will be spending time this year to work with first nations, other governments, industries, environmental organizations and the scientific community to consult with them about their ideas on the best way to proceed. So the possibility of putting that government policy into legislation is one that we will be consulting on.

S. Simpson: Well, I appreciate the minister's answer, but the reality is this, hon. Chair: a throne speech isn't policy or law. A throne speech isn't the law. Speeches by the Premier aren't the law. Speeches by the minister aren't the law, and responses to questions in estimates aren't the law.

What is the law is what's brought in by legislation or what's attached to that through regulation. If the government is serious about a 33-percent reduction by 2020, my question is: how do the people of British Columbia have confidence in that number unless the government is prepared to entrench it in law and make it the standard that it will achieve, based on what the Premier committed to in the throne speech?

My question is: is the government going to put the 33-percent reduction into law through legislation?

Hon. B. Penner: The member has already had an answer from me to the very same question, but I just want to correct something that he said. He said that the throne speech does not represent policy. He's wrong. As I've already indicated, effective immediately with the throne speech, it became government policy to require carbon capture and sequestration for coal-fired electricity-generating projects.

He would only need to consult with the proponents to find out that, in fact, that affected them and their proposals immediately. They know now they can't move through the environmental assessment process without reconfiguring their projects because, effective with the throne speech announcement, that policy, which is world leading…. Nobody else has thought to do it. The NDP never thought to do it. Other governments in North America haven't done it. It is a proposal currently in the European Union, but they haven't yet adopted it.

We have adopted that policy here in British Columbia. It's a policy that has been suggested by leading people such as Dr. Mark Jaccard, Simon Fraser University, as a way forward, given the abundance of coal energy as a potential resource.

The concern around coal energy, of course, is what happens with the emissions. That's why we have put into place a policy that says that coal remains a legitimate potential energy source for British Columbians, but we want to make sure that if it's going to be utilized, the concerns that have been raised around its use are addressed.

Rather than adopting the NDP approach, which was, "Just don't use it at all," we've said: "You can use it, but only if you address the environmental concerns." That's a policy which was advocated by people such as Dr. Jaccard and others, and so we have adopted that policy — requiring carbon capture and sequestration.

S. Simpson: Well, I mean, I know that this is the minister of revisionist history. Let's be clear here, hon. Chair: this is the minister and this was the Premier who promoted conventional coal-fired power. This is the government that put the issue on the table by saying: "We're supporting those two plants in Princeton and Tumbler Ridge." This is the government and this is the minister who stood up in this House in question period and refused to condemn the idea of it until we had the revelation that led to the throne speech. Clearly, then, the government did a 180-degree turn on the question on coal and came up with this new response.

The minister can go back, look at comments that were made and find out that what the government has done was to adopt the NDP's position exactly. It was the opposition from this side of the House and from many people in the community that forced this government to back down on one of the most regressive policies that we've ever seen in this province — which was the promotion of conventional, coal-fired power.

Now the minister stands up and wraps himself in the cloak of climate change. I'm glad to see it — it's about time — but be clear. He's the guy, along with his government, who promoted this issue in the first place.

I'll get back to the question. I didn't ask about coal-fired power. I didn't ask about sequestration. We'll get a chance to talk about that soon enough. I asked whether the government is serious about the 33-percent reduction in emissions. I'm suggesting that if the government is at all serious about that number, then it should entrench that number in legislation. My question is: is the minister prepared to bring the legislation to entrench the 33-percent reduction?

Hon. B. Penner: As I've already answered, we will be taking time to consult with industry, stakeholders, academics, first nations and others over this year. That's something that we laid out in the throne speech. Normally we hear the opposition say that the government should take time to consult with people, and we're going to do that.

The government objective is clear. It's been established in policy — through the throne speech, which we can be held accountable to — that by 2020 we will be reducing greenhouse gas emissions by 33 percent over what we think current levels are today.

Another example — about how throne speech policy is policy — is our government commitment around requiring hybrid vehicles for the government fleet. That's something that's leading in terms of North America. I'm not aware of any other jurisdiction where a state or provincial government has said that, as of 2007, all passenger vehicles required for the government fleet, either through lease or purchase, will be hybrid vehicles.

That's something that this government's doing, and it's not something that the NDP ever thought of doing when they were in office.

S. Simpson: Well, the minister might say, "Throne speech policy is policy" — and fair enough — but throne speech policy isn't government law. Government law would be to legislate that 33-percent reduction by 2020.

The minister talks about consultation. I think consultation's great. I think the government should consult. I think they should talk to a whole array of people about how they deal with this climate change matter, but that should not stop them from being clear and committed to their 33-percent reduction. Believe me, they could legislate that reduction now at 33 percent by 2020 and then go out and begin that consultation on the steps and actions that need to be taken to accomplish it.

I'd be happy for them to be involved in that discussion, but quite frankly…. We've seen it post–throne speech. After there was little in the budget or in the energy plan, we're starting to now see opinion pieces and comments, from people who were very hopeful about the announcements in the throne speech, starting to become a little concerned about how serious the commitments are.

I think the government could deliver a very strong message by in fact legislating that 33-percent reduction today. That would deliver a very clear message about how serious the government is. Without that legislation, it's kind of a promise, but I'm not sure what it means.

I'll move on, though, to the next part of this. The ministry has responsibility for legislation or regulations. The ministry has, I believe, six people currently on staff dealing with climate change matters. What will the relationship be to the cabinet committee of the ministry?

Hon. B. Penner: First of all, I serve, obviously, on the cabinet committee on climate change. The ministry supports me in the work that I do and the advice that I provide to the cabinet committee and, as well, provides advice generally to the committee. In addition, of course, we take direction from any decisions or advice flowing from that group.

S. Simpson: When we talked about the climate action team…. I've had a chance now to at least have a preliminary look at the job descriptions and the material that the minister identified was on line.

I believe that the $4 million that was allocated in the budget is there to pay the costs of that operation. I thought I heard the minister just moments ago say that there were four FTEs involved in this. Could the minister confirm: how many FTEs will there be in that climate action team that is currently being advertised?

Hon. B. Penner: The member is correct. At the time that the budget was produced, we were anticipating four FTEs. Of course, our budget provides for an extra $4 million. Since that time, we've decided not to rely as much as we had anticipated on contract resources to assist us with developing our climate change plans, so there will be more in-house hiring than originally planned.

S. Simpson: I'll correct myself, because I am going to talk about the climate action team later, but I believe climate action secretariat is actually the terminology for this group. I will correct that for the record.

When I look at this, I see 11 positions here. When I go through the positions, they are all deemed to be full-time in terms of the postings. Is it the expectation of the minister that all of these will be full-time postings?

Hon. B. Penner: I would expect that the positions would be full-time work. They may not be permanent. I think the posting documentation that the member will have retrieved from the Public Service Agency website, at least in the case of a number of the positions, does specifically say that the terms may be time-limited.

S. Simpson: I did see that it does make reference that they could be a temporary or a permanent basis. Could the minister give us some idea: of these 11 positions, which ones are expected to be of a term shorter than full-time and which ones the minister anticipates will be of a more permanent nature?

Hon. B. Penner: Just to correct the member, they are all going to be full-time. I don't expect this to be part-time work. But some of them may be term-limited.

Hon. B. Penner: I believe there are three postings where it indicates on the Public Service Agency website that proposals for time-limited or temporary positions will be considered.

S. Simpson: Could the minister identify…? The documents I have don't tell me that quickly.

If the minister is aware of which those are, possibly he could inform the House which of those three positions are of a time-limited nature.

Hon. B. Penner: Just quoting from the Public Service Agency website. This can be found, for people viewing this debate…. Point your browser to postings.gov.bc.ca.

There are three, which I identified earlier, where we may contemplate term-limited positions. We'll take proposals from people on that, and to some extent we are testing the market here to see what kinds of skill sets are available and what kinds of people respond.

We've got the special adviser, personal conservation; the special adviser, cross-government outreach, to do the kind of work that I have referred to previously about needing to work cross-ministry to accomplish our government's objectives; and the executive coordinator for the climate action secretariat.

For the benefit of those who are following the debate, I will just read a description into the record of that

S. Simpson: I thank the minister for reading that into the record. Hopefully, there are many qualified people rushing to their computers as we speak.

We spoke a little bit about this yesterday but not very much — the climate action secretariat, these 11 positions. Now, I'm assuming, eight of them are permanent full-time positions, and three of them are term full-time positions. I believe that's what the minister said.

The climate action secretariat, if I read here on the head climate action secretariat person…. It says: "The head of the climate action secretariat will lead a dedicated team of public servants who will coordinate climate action activities across government, manage key cross-government projects and offer policy support to all ministries as they apply their…mandates to…meet the internal and external climate change targets."

Am I to assume from that that these staff will in fact not be working directly for the Ministry of Environment but will be working for somebody else within the structure? If I'm wrong, can the minister tell me that?

Hon. B. Penner: I want to clarify what the member said. Some of the positions may be term-limited. That hasn't yet been determined once and for all. In fact, we need to keep in mind that this is an evolving file. This is new for a lot of agencies to grapple with, so as we learn more, we may have to add resources or move resources and remain flexible in how we approach this.

Certainly, at the moment the member is correct. He's seen the postings. Our expectation is that eight positions will be on a full-time basis and another three full-time and perhaps term-limited. We're testing the market to see what kind of interest people have and what kind of commitments they can make, and we'll assess the best way forward from there.

In terms of the organizational structure or reporting structure, our first priority is to try to find out what kind of personnel are available to us and to make sure we can attract them in a timely fashion. In terms of the organizational or reporting structure, we'll determine that relatively soon.

S. Simpson: I asked that question because clearly — and maybe we'll have this discussion a little bit now — there appear to be two and possibly three streams of activity that will drive this issue for the government.

First of all, we have, obviously, the efforts of the Ministry of Environment itself. As it says in the service plan, it will lead. The minister has said that legislation and regulations — whatever — will be coming through his ministry. We have a cabinet committee chaired by the Premier that will do some work.

Then we have — I believe the minister and the Premier have both referenced it; certainly, the minister has — what will be the climate action team, which will be some third body. That has been talked about. It's the climate action team that I believe was referenced, as well, in the throne speech. That's a third body, and we'll get to talking about that in a minute.

For now, I'm getting a better sense of what the ministry is and isn't doing in this process. Could the minister, just to enlighten me about the differences between what the ministry does around legislation and regulation…? What's the role of the cabinet committee in terms of its work, if it's not to drive legislation and regulation?

Hon. B. Penner: Again, this was something that we did canvass yesterday towards the close of the debate, before 6:30. The role of the ministry is and remains to provide advice to cabinet and its committees as well as to take direction from cabinet.

The fact of the matter is that we make tremendous efforts to make sure that government doesn't work in a balkanized or siloed fashion. We try to accomplish cross-government objectives. Ultimately, we all are working for taxpayers. I don't think that at the end of the day taxpayers get too fussed about which particular ministry is implementing something, as long as it's getting done. Taxpayers want to see that their dollars are going to Victoria for a good purpose and that something is resulting.

That's one of the reasons, I think, it makes so much sense for the Premier to chair the climate action committee of cabinet — to again ensure that there's a cross-government response and that things get implemented. All ministries

of government, including the Ministry of Environment, take our direction from government decisions, and that comes from the cabinet table.

S. Simpson: I don't disagree with the minister that the people of British Columbia want to know that things are getting done. I do believe that the people also want to know where the decisions are being made. They want to know whether those decisions are made at the ministry level or at the cabinet level, whether it's this minister who should be held accountable for those decisions or somebody else — in this case, the Premier and the cabinet committee. They want to know who they should be ultimately talking to and expecting and holding accountable for this. I think that's important.

I do get the sense and I understand now that this is being driven from the Premier's office. It's very clear. It is being driven through a cabinet committee that the Premier chairs. We've seen information about that recently in the media and concerns raised by some — certainly not by the minister — about whether that's the most appropriate place for this work to be done. We'll get a chance to talk about that maybe a little bit, and we'll hopefully get a chance to talk about it with the Premier in his estimates.

The question I have, though, is about that third stream of leadership or activity that's anticipated here, which I believe was referenced in the throne speech. There's been talk about that, the climate action team, which is to be another entity involved in this and engaged in this. Could the minister give us some idea about who the climate action team is, if it's not the cabinet committee?

Hon. B. Penner: The member asked some questions around accountability and how do members of the public know who to hold accountable for our ambitious greenhouse gas reduction targets as laid out in the throne speech.

The answer is pretty simple. In a parliamentary system the public holds the government accountable. All members of government that are elected are going to be held accountable for this objective. It is a cross-government initiative.

The member may think it's appropriate for governments to operate in silos, and that certainly may have been the way things operated in the past in British Columbia. Under our government and under the leadership of our Premier, we go to great lengths to make sure that we're thinking about government as a whole — and, more importantly, the province as a whole — when we're trying to reach our objectives, whether it's stimulating the economy and reducing taxes, getting rid of red tape that's not serving any necessary or beneficial purpose, or meeting our greenhouse gas reduction initiatives.

It's something that we all have to take responsibility for. It's not something that somebody else can do, and I don't have to do. It's something that all members of cabinet are responsible for, and frankly, across British Columbia all citizens are going to have a role to play in helping us meet these emission reduction targets.

The answer is that in a parliamentary system, the government is held accountable for the commitments that it makes.

In terms of the climate action team, as the member will know, in the throne speech we talked about working with first nations, other governments, industries, environmental organizations and the scientific community to help determine the most credible, aggressive and economically viable sector targets possible for 2012 and 2016. As well, the climate action team will be asked to identify practical options and actions for making the government of British Columbia carbon-neutral by 2010, which isn't that far away.

I would expect that we'll have more to say about the composition of the climate action team by the summer.

S. Simpson: I appreciate that this all came together very quickly. In the days before the throne speech this got cobbled together, and I understand that. There wasn't much time to actually put a lot of thought into what was going to occur here, and I understand that.

The minister may believe that his government works cross-ministry well and is a holistic and integrated government. That's a place where I beg to differ with the minister. This is a government that is solidly entrenched in its silos as far as I can see, from observing the government over the last number of years, but that's a debate for another time and place.

The question I have around the climate action team is not the individuals who will comprise it. I understand there's work to be done to make that happen. I'm trying to understand what the climate action team will do and what its purpose will be.

You have the ministry, and you have a cabinet committee. Clearly, all the real decisions will be made in the Premier's office, driven through this cabinet committee. The question I have is: what is the climate action team's purpose going to be, and what authority is it going to have to do anything in this process?

Hon. B. Penner: As I've already indicated, and as the throne speech announced, the climate action team will be working with first nations, other organizations, industries, environmental organizations and the scientific community as we work to establish the most credible, aggressive and economically viable sector targets possible for 2012 and 2016. As well, we're working towards our objective of making government as a whole carbon-neutral by 2010.

Obviously, this will help us gather input and help us do the very consultation that the member says he would support. We obviously want to talk to people who have the ideas and get the input, particularly from the sectors that will be affected. We want to make sure that we reach the targets that we're setting for ourselves and elicit the best information we can to make sure that happens.

I do take some umbrage with the member's characterization that somehow this plan was, as I think he put it, cobbled together or something. In fact, what independent commentators have said about what we've committed to and put together is this. Prof. Andrew Weaver, University of Victoria, who is a climatologist, said in the Times Colonist on February 14: "It is the most progressive plan that I've seen anywhere in North America for a start, and one of the best in the world. This is the way to go. This is great leadership. It really is super."

Dr. David Keith, a professor at the University of Calgary, a Canada Research Chair in energy and the environment, said: "It's doable, and it's significant." So in fact, the member is incorrect if he's suggesting that somehow the government's initiatives here are not well-founded.

S. Simpson: I'm hopeful that over the next few days we'll get an opportunity to explore how well-founded the government's intentions and work have been here.

Getting back to the question of the climate action team. I accept and respect the comment of the minister that the throne speech talks about the climate action team working with a whole range of stakeholders — first nations, environmental groups and others. That's a good thing.

What I'm trying to determine is not the individuals, but what the makeup of this team will be. Will there be first nations, environmentalists and business people on the climate action team? Will it be government officials? Will it be deputies and others? I'm going to want to know what this committee will do other than talk to people and where the information it gets will go and what kind of support it will have.

I really would like to start with: who might this committee be? What kinds of people will make up the climate action team? Not specific individuals — I respect that that hasn't been determined, and that's fine. But what kinds of people and what kinds of interests will make up the climate action team?

Hon. B. Penner: I think the member has kind of answered his own question. He has just mentioned a list of different kinds of people that could well comprise the climate action team. As I've said, we'll have more to say about that, I would expect, by the summer.

I do want to correct the record, though. I misspoke a moment ago. I said that it was professor David Keith who had said our climate change targets are…. I think I said: "It's doable and significant. " In fact, it was Prof. Andrew Weaver who said that on The Bill Good Show on February 20, 2007. Dr. David Keith, the professor from the University of Calgary, actually said, "I think it's right on," in reference to our climate change initiatives announced in the throne speech, and he said that on CBC radio on February 17, 2007.

S. Simpson: Just based on the last answer, I believe the minister was saying that a number of those groups or interests may have representation on this climate action team, that that's what the thinking of government is, that they will draw people from outside of government to be participants in this.

Maybe the minister could confirm whether I'm correct in my interpretation of his comments, and if so, maybe he could tell us a little bit about what the thinking is on how the government is going to solicit that representation.

Hon. B. Penner: The climate action team will be established…. I would expect we'll have decisions around the structure and process by the summer, as I've already indicated. It will be assisting government as we work to identify the most practical solutions for reaching our targets.

One thing I neglected to say earlier is that it's not just to help us become carbon-neutral as a government by 2010 in terms of government operations and the sector targets for 2012 and 2016, but it's also to help us set that longer-term objective of 2050. I know that a number of jurisdictions have been working towards those numbers. That's something that we will also be doing — setting a longer-term emissions reduction target for 2050, which we have not yet done.

S. Simpson: Initially, in response to the previous question, when I talked about…. The minister talked about all of the groups that were identified in the throne speech as being groups the climate action team would be engaged with.

I think I had made some reference to that, and the minister, I believe, had inferred that those groups may very well have people with…. The climate action team would be comprised, at least partially, of representatives from those groups. In this recent answer I'm not sure I heard the minister confirm that.

Can the minister confirm that the climate action team will in fact have representatives from a range of groups, including first nations, environment, business presumably and hopefully local government — that it will have representatives from a range of groups on its membership of that climate action team? Can the minister confirm that or not?

Hon. B. Penner: The member is correct. The climate action team very well may…. But the precise structure and process for the climate action team — I expect we'll have more to say about that by the summer.

S. Simpson: Could the minister tell us: will it be the cabinet committee that will make those decisions about the structure of the climate action team?

Hon. B. Penner: The climate action committee of cabinet will be looking at this issue. I would expect the climate action committee would make recommendations to the cabinet as a whole. Cabinet's decision — again, this being a cross-government initiative — will be informed by the advice that it receives from the climate action committee of cabinet.

S. Simpson: Can I assume that there have been no decisions made about what the mandate of the climate action team will be; what the composition of the climate action team will be; what authorities, if any, the climate action team will have; what kinds of support or budget it might have to do its work — or the reporting of the climate action team in terms of who it will report to? Is it a fair assumption that none of those decisions have been made at this point?

Hon. B. Penner: As I've indicated, the climate action team structure and process will be established shortly. I would expect that we'll be in a position to announce that by the summer. Obviously, the information or the advice coming forward from the climate action team will inform all of government because this is a cross-government initiative, as I've said several times.

In order to accomplish our objectives, all ministries and all branches of the government will need to be working on this. That's why the Premier is chairing the climate action committee of cabinet — to help make sure that this is seen as a governmentwide initiative. Clearly, the Ministry of Environment plays a leading role in this, but it is not just about the Ministry of Environment. It's about all branches of government.

S. Simpson: Those areas that I raised the issues around, though, because it is the minister who said that the preparatory work is ongoing…. I accept and would expect that this minister, as the Minister of Environment, has a pretty key role in the question of climate change along with the Premier, who is clearly taking the lead on this.

I understand that the decisions have not been made about this climate action team in a whole raft of areas. The reason I ask this question is because we know that the cabinet committee is just that — a cabinet committee. It is confidential. It has been excluded from FOI. The ability to get information about the deliberations of that committee does not exist. The ability to do that does not exist.

That is where the decisions are going to be driven from, as the minister has acknowledged, saying that this is a cross-government initiative. It's not simply a Ministry of Environment initiative. Clearly, it will be driven by a committee that is not open to public scrutiny.

The climate action team might have some openness to public scrutiny. That's not totally clear at this point, but I'm assuming it will. I'm just trying to determine here whether any of the significant decisions about that committee or that process of the climate action team and what its mandate will be have actually been determined yet, or whether all of that is still to come sometime in the future.

Hon. B. Penner: The climate action team structure and process will be announced relatively shortly. I would expect that by the summer, we'll have more to say.

S. Simpson: I just want to go back a little bit to the secretariat. I have had the opportunity, while the minister was contemplating answers to a couple of those questions, to read a little further in the material that's on the website that the minister has spoken about — where the postings are.

I'm just looking for clarification. The minister told us that three of the positions would be term. I believe he said that all of the positions would be full-time and three of them, at this point, would be term and that that may change at some point in the future, but that's the intention right now. Yet when I read through the postings, I notice that seven of the postings, when you get to the end, say: "Proposals for temporary or part-time positions will be considered." That's specifically enunciated on seven of the proposals; four of them don't make that offer. They clearly don't provide that, and those are the more senior positions, as I can tell.

Could the minister clarify whether, in fact, some of these may not be full-time positions? They may be temporary or contract consultant kinds of positions available rather than the full-time positions originally spoken about.

The member notices that at the start of the posting for each of the positions, it says "full-time," and then, as you work your way to the bottom, it says: "Proposals will be considered."

I suspect that what I said earlier remains the case. We are testing the market to see what kind of skill set or expertise we're able to attract. What this indicates is that if someone is not capable or available on a full-time basis and we are interested in obtaining that skill set nevertheless, the ministry or the government is prepared to consider proposals for part-time positions.

That's not that that will necessarily be the case. If there's somebody else with an equivalent expertise or skill set that we're able to obtain on a full-time basis, I would think that would be the first option, but we will consider, in the alternative, proposals for temporary or part-time positions for a number of the postings.

S. Simpson: That being the case — and I take from that that the minister is saying that there is going to be a fair amount of flexibility here in terms of the government wanting to put together the team or the expertise it's looking for to fulfil these positions — would the minister anticipate contracting consultants who may not be employees at all but who would do this work as a consultancy rather than as employees either of a full-time or part-time nature? Is that something that the ministry would contemplate as well?

Hon. B. Penner: Our preference at the moment is to try to hire staff to work within government, but the member is correct. If for whatever reason we're not able to get the kind of response we're seeking with these postings that are available on the public service website for everyone to go look at, then we would

probably have to consider whether or not we want to try to contract for those resources.

S. Simpson: I believe it was on the third of April, at the time that the story came out in the Vancouver Sun about the cabinet committee….

We read about the cabinet committee, and most particularly, we read about order-in-council 157. That was the order-in-council that changed the Freedom of Information and Protection of Privacy Act to include the cabinet's committee for climate action as one of those committees of executive council that is excluded from FOI.

My question is: the climate action secretariat that's being put in place and that we've just spoken about…. Is it the expectation of the minister that the climate action secretariat will be excluded from FOI, or will it be available under FOI?

Hon. B. Penner: I just want to caution the member about relying on the newspaper for a source of primary research. There was no change to the Freedom of Information and Privacy Act. In fact, the act remains the same. There was a regulation passed making it clear that a new cabinet committee had been established. When the FOI Act was initially introduced by the previous NDP government, there was a blanket provision that cabinet and all cabinet committees were automatically provided with the benefit of section 12 of the act.

What we did — I think in 2001, 2002 or thereabouts — was make it clear that in order for cabinet committees to have access to section 12 of the FOI Act, a regulation had to be passed. The reason for that was so that everybody can see that a new cabinet committee has been established and that section 12 of the FOI Act applies. So this is in an effort towards greater transparency.

Under the previous government, the NDP government, they had cabinet committees that had the same provisions of section 12 applying to them, but they didn't have to go to the bother of letting the public know through passing a regulation that in fact section 12 of the FOI Act was applying.

I can also point out that information that's been used to present background explanations or analysis to the executive council or its committees for consideration in making a decision is, I believe, subject to FOI requests once governments have made decisions and announced policies.

S. Simpson: To be clear, the change that did happen here, I do believe, through the OIC is that in fact a new committee — and that's fine; that's the prerogative of government — was added to the list of executive council committees. That means that that committee is not available for FOI.

Just to be clear here, what is the expectation for this secretariat? Is it the expectation that the work of the secretariat will be excluded from freedom of information or that it will not and the work of the secretariat will be available under FOI? Does the minister have an answer for that? The minister may not have an answer. It may be a decision to be made in the Premier's office, and the minister may not be aware of the answer to that question, and I accept that. But does the minister know whether the secretariat will be excluded from FOI in much the same way as the committee of executive council is?

Hon. B. Penner: As I said just a moment ago, there was no change to the legislation or the act. What was passed was a regulation under the act to formally recognize the establishment of a new cabinet committee. That's made publicly available so everybody can see that there's a new cabinet committee and who is on the committee.

You'll see me; the Minister of Finance; the Minister of Forests and Housing; the Minister of Community Services; the Minister of Energy, Mines and Petroleum Resources; the Minister of Transportation; and the Minister of Small Business and Revenue. As well, of course, the Premier is chairing that committee that has been established.

That's a public record. Because we've passed this regulation, that's apparent for all to see. So that's pertaining to the cabinet committee on climate change. The cabinet committee on climate change is not the secretariat that the member refers to.

S. Simpson: I understand that, and I understand there's a cabinet committee, and that has happened. There is also a secretariat. There's a secretariat that increasingly, it looks like, is going to be working for that cabinet committee, since it appears that the secretariat makes no reference in any of these postings to the minister's own ministry. It talks about cross-government. It talks in much broader terms than that of exclusively the Ministry of Environment.

I understand that, and it makes perfect sense to me that if climate change is going to be driven out of the Premier's office and a cabinet committee is going to be the decision-making body, then I'm not surprised that the secretariat might end up working for the cabinet committee rather than working for the Ministry of Environment. I understand that process.

What I'm trying to determine is…. We now have seen, as the minister has quite rightly said, a cabinet committee — and there's been an additional committee added to the list of committees of executive council — that has been excluded under an order-in-council. Fair enough.

My question is around the climate action secretariat that is being put in place and presumably will provide support to all kinds of people in government. I'm looking to know whether the climate action secretariat that's being posted up right now is going to be excluded from freedom of information.

Hon. B. Penner: I'm not an expert on the Freedom of Information and Privacy Act, but my expectation would be that that law applies across government. It is in effect, and there's been no exemption granted to a

I was remiss, and I apologize for this. I missed one minister in the list of the composition of the climate action team. In addition, there's the Minister of Labour and Citizens' Services. So that rounds out the climate action committee of cabinet.

S. Simpson: Just so I'm clear here…. I appreciate very much the minister's answer. Is it the position of the minister that, much like most of government that's outside of executive council, the climate action secretariat's work will in fact continue — will be set up to be available under freedom of information? That is the position or the belief of the minister at this time?

Hon. B. Penner: The Freedom of Information and Privacy Act is in effect, and that applies across government.

B. Simpson: I'd like to spend a little bit of time on mountain-pine-beetle-related issues. Depending on the time, I have a few questions about the ministry's relationship to the Private Managed Forest Land Council.

With respect to mountain pine beetle, if the minister could tell me…. In the mountain pine beetle action plan, there's a reference to the Ministry of Environment as playing a role in that action plan. Could the minister inform us what that role is? Are there bodies assigned to it? Is there a budget assigned to it? What's the nature of the relationship that the Ministry of Environment has with the mountain pine beetle emergency task team and action plan?

Hon. B. Penner: The Ministry of Environment priorities for mountain pine beetle management, in cooperation with the Ministry of Forests and Range and other stakeholders, are to reduce the pine beetle spread as much as possible; mitigate fuel and wildfire hazards in parks; mitigate impacts on fish and wildlife habitat, species at risk, riparian areas and park ecosystems; and work towards restoring watersheds and maintaining water quality.

The member will be aware of the federal commitment around $100 million in mountain pine beetle funding and work that the Ministry of the Environment has done — about $4.3 million in mitigation projects and plans. That's, I think, for fiscal 2007-2008, if I'm reading this note correctly.

Ministry of Environment staff have been working closely with the Ministry of Forests and Range on the mountain pine beetle multi-agency working group to define provincial priorities, management requirements and funding required to mitigate long-term provincial mountain pine beetle impacts over the next 15 years.

B. Simpson: I just want to be clear. The $100 million the minister is referencing is the previously transferred $100 million. It's not new money from the current government.

Hon. B. Penner: Yes, and the projects amounting to $4.3 million being spent on mitigation projects that I referred to come from that $100 million. We're planning to implement over $3.5 million on mountain pine beetle restoration or mitigation projects in fiscal '07-08.

B. Simpson: With respect to the multi-agency working group, is there a member of the Ministry of Environment that actually sits on that group? Is it two members? What's the nature of the membership on that group from the ministry?

Hon. B. Penner: Yes, we do have one full-time staff member, based out of our Prince George office, who's our manager for mountain pine beetle issues.

B. Simpson: With respect to the costs to the ministry, are all of the ministry's costs with respect to mountain pine beetle covered under the federal dollars, or does the ministry have other costs that they have to bear? If so, are those an explicit line item of what mountain pine beetle is costing the Ministry of Environment?

Hon. B. Penner: In the 2007-2008 estimates we anticipate recoveries within the consolidated revenue fund from the Ministry of Forests of $3.665 million for mountain pine beetle. As best we can, we attempt to recover our costs that we're incurring as a result of the mountain pine beetle from the funding sources that the member has been referring to.

There are additional staff across the ministry besides the one member that I mentioned who is participating in the interagency working group. We do have staff in various parts of the province who undoubtedly, during certain parts of their day or certain parts of their week, do spend some time on issues related to the mountain pine beetle and working on mitigation strategies — for B.C. Parks, for example. As best we can, we attempt to recover those costs.

B. Simpson: I just want to be clear. The recovery of those costs is predominantly from the federal transfer to the Ministry of Forests, from that funding allocation.

Hon. B. Penner: As I indicated, the line item recovery is against the Ministry of Forests. I understand that they have a Forests for Tomorrow program. I believe they're also getting assistance from the federal government pine beetle funding. Just exactly what breakdown of money that they then turned and transferred to us comes from federal sources or their own provincial sources may be a question you'd have to take up with the Minister of Forests, because I don't have those details in front of me.

B. Simpson: I appreciate that the minister won't have the details for another ministry, but his answer is helpful.

With respect to other forest pests or fire mitigation, in a general case, if we put the mountain pine beetle

situation aside, I believe the ministry does the work, for example, on OGMAs — old-growth management areas — that are set aside, or parks.

Under a normal situation, would the ministry incur those costs themselves and have to just deal with it themselves — say, for bark beetle eradication or fuel management? Independent of this mountain pine beetle emergency situation that we've got, would the ministry incur the costs themselves within their own budget?

Hon. B. Penner: I am advised that traditionally the Ministry of Environment did not obtain or seek recoveries from the Ministry of Forests to deal with forest health issues. We do have specific recoveries identified in our budget planning from the Ministry of Forests to deal with the mountain pine beetle issue.

I guess you could say that, traditionally, we had to deal with our own issues without recourse through funding from the Ministry of Forests. I suppose in the past they probably provided us some expertise, staff time, advice, that type of thing, but I'm not sure if that showed up as a specific dollar amount that was budgeted for or accounted for.

I'm also advised that beyond B.C. park boundaries the Ministry of Environment is involved in certain habitat restoration or enhancement activities on Crown land but outside of parks. For example, I know we are involved in, at times, controlled burns to try and open up additional ungulate grazing opportunities or habitat. That's the kind of work we can do.

That may or may not be related to forest health directly. I think there is an overlap. It gets a little bit less clear exactly how you draw that line, but the most specific imperative here is around the mountain pine beetle. That's now why we get this specific funding from the Ministry of Forests to help us.

B. Simpson: With respect, then, to logging activities in parks in order to address either fuel management issues or mountain pine beetle, particularly danger trees in recreation areas, etc., that are within parks, does the ministry have to go through the normative forest management practices — get a forest licence to cut, timber mark and pay stumpage?

When you're still operating on Crown land but in a park designation, does the ministry have to go through the Ministry of Forests to get the permission, get the timber mark, and do they transfer money to the Ministry of Forests by way of stumpage for any trees that they remove?

Hon. B. Penner: Stumpage is paid on timber removed from B.C. Parks if it is taking place. Again, it's our policy that that is done either for public safety or for forest health reasons, so it's very limited in terms of what takes place.

We do have a government policy — I think it was as of 2004 — that B.C. Parks be able to offset tree-removal costs through the recovery of stumpage derived from park tree removals. I think there's some netting-out that takes place.

Keep in mind that much of the timber, when it does get removed, is of fairly low value, so many of these operations are money-losers. They aren't necessarily profit-makers for B.C. Parks because of the value of the wood and the cost of getting the timber out.

B. Simpson: With respect to that, does the ministry have to go through normal consultation processes as a licensee, as other licensees have to go through? You have to go through the process to get the forestry licence to cut — that's what I understand it comes under — pay stumpage, etc. What are the requirements for consultation with the communities or individuals who are interested? What are the requirements to act under higher-level plans for the region? Does the ministry have to abide by those?

Hon. B. Penner: In short, there is a different process that applies because it is within a park, and the Park Act applies legally. It is our practice to consult with first nations and local governments. In some situations, first nations are actually contracted to do the work or receive the opportunity to do that work.

Just to put this in some perspective for the member, in fiscal 2006-2007 there were 12 tree-removal projects completed in parks, with $98,000 of stumpage funding utilized to offset the costs of these projects. That hopefully gives you some scope of the amount of that work.

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

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

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

Mr. Speaker: Hon. Members, I have the honour to present report 1 of the Auditor General, 2007-2008, Special Audit Report to the Speaker: The Financial Framework Supporting the Legislative Assembly.

J. Horgan: As we start this morning, I don't know if the minister had an opportunity to review the media summaries from yesterday, but our exchange on gas regulation or an inquiry into rising gas prices, of course, was picked up by CKNW.

Just so the minister is aware, as we start the morning, Jon McComb applauded your open-mindedness on the question of a review, and I'm urged to continue pressing — not so much this morning, because we other issues to discuss. But I just wanted to let the minister know that the public certainly would welcome a further rethink by the minister, his staff and the government of how they could address escalating costs of gasoline in the lower mainland and right across the province.

As we left off yesterday, we were discussing electricity policy, and I would like to pick up from where we left off yesterday. We were talking about IPPs. We were talking about recently signed confidentiality agreements with the two coal-fired IPPs, as a result of their current inability, I would think, to meet the new standard laid down by the energy plan of zero emissions of greenhouse gases. We did discuss the importance of working in British Columbia, and in fact around the world, on sequestration strategies and technologies so that we can make a significant contribution towards the reduction of greenhouse gases.

We don't burn coal here for energy generation, but in many parts of the world that's their singular fuel. So it's an important issue, and I know that government is working, and I look forward to any information that can be sent my way over the next number of months, as Hydro and the government work with the two proponents for the coal plants so that I can have a better understanding of how that discussion is proceeding.

We were also talking about water rentals and IPPs and what happens to the resource when the contracts expire. We were talking about right of first refusal to renew contracts or some language in the contracts or the energy purchase agreements that would allow the province to protect their interests into the future.

The minister rightly said that we don't have crystal balls, and I agree with that. But we can, with some certainty, predict that the cost of energy is going to be higher 30 years from now or 40 years from now than it is today, and the need in a climate change environment to have clean, green power will be even greater.

Puget Power and Light, I believe, is investigating purchasing power from British Columbia in the near future. There was a $14 million sum approved by the California regulator to investigate green energy produced in British Columbia, and I'm wondering if the minister or B.C. Hydro are involved in that discussion.

Hon. R. Neufeld: Certainly, they have set aside some money in the U.S. to look at the possibility of purchasing green energy from British Columbia. The entity is Pacific Gas, I believe — B.C. Hydro tells me. They have had discussions with them, but at the present time what we're saying to them is: "Look, we have a self-sufficiency problem in the province already. We need to actually meet that goal by 2016."

The member knows as well as I do that we'll have continual trade with the Pacific Northwest, whether it's California or any of the other states, ongoing through B.C. Hydro. But at the present time, we need to look seriously at how we look after our own needs.

Just to go back to some of the comments you made earlier about the sequestration and that. We would be happy to work with the critic on all the issues around sequestration in the province. It's important to everyone. We're actually working with the oil and gas industry on how we can sequester CO₂ — it's done in lots of places — and how that could be financially probable here in British Columbia, so we reduce our greenhouse gas emissions.

I don't have any problem, when we're working through that stuff, in keeping the critic informed, at least on what we're doing. That's all public knowledge, but if he has an interest in that, we certainly will do that.

I just wanted to add to the remarks. I know we stopped fairly quickly last night, and the member had made some remarks about Alcan. I just wanted to put on the record a couple of things about Alcan in response to the remarks that the member made. I'll read them into the record. This is around water rentals too, so the member may want to touch on it some more — or not; I don't know.

You end with: "We'll agree to disagree, and maybe we'll pick this up at a later time."

Just so that what's on the record is, at least, what I feel is correct and I believe what most people believe is correct, Alcan's proposed upgrade would increase its

aluminum production at Kitimat by 63 percent. It would require 20 percent more power and result in one of the three largest smelters in North America.

Obviously, it's going to hire fewer people — I think a thousand jobs, in comparison to the 1,500 that are presently there. All that the province tried to do was to actually buy some of the excess electricity so that we would have it generated in British Columbia, which could help us get to be self-sufficient in the province.

The member talked about that they should be paying a much higher water rental rate if they're selling electricity for other purposes than aluminum, and that is the case. That was the case many years ago; it is the case today. It was the case during the '90s — no different than it is today. If you're smelting aluminum, the water rental that you pay is reflected in the price of the aluminum. There's an equation that works that out. I understand that's been there since they started doing that. It wasn't changed.

If you're actually selling electricity for other purposes that would be for domestic use, they would pay the same water rental rate — or they do; not would, they do — that B.C. Hydro pays. I can't see what the matter is with that rationale, other than some people thinking that because it's a corporation it should pay an awful lot more for the water rental rate. Well, in turn, if in fact you use that as a rationale and if B.C. Hydro were to buy it, to actually provide electricity in the province, the ratepayers would pay a higher rate.

Why would it not make reasonable sense for a company that's generating electricity using water — they don't own the river; they're using the water — to actually pay the same rate as B.C. Hydro and to be able to take that electricity and sell it into the market, the same way B.C. Hydro does? The difference is that B.C. Hydro is owned by the people, I guess, and Alcan is owned by shareholders — two totally different things.

If we're saying that what B.C. Hydro should pay should be way lower than anybody else and that everybody else should pay more, I have some problems with that. I think the member would agree with me, actually. I hope he would agree with me in this room, because I think we have to take the rhetoric out of some of this. I appreciate that you've got a job and I've got a job, so I appreciate that those questions should come. They're legitimate questions, so I'm not saying they shouldn't come.

If you look at the agreement that the NDP signed in the mid-'90s, it was a 20-year agreement to sell electricity — not for smelting aluminum — that Alcan could sell anywhere. Interestingly enough, they chose to sell it in the United States of America at huge prices, because California was having some difficulty at that time. Interestingly enough, B.C. Hydro was doing exactly the same thing.

Interestingly enough, we're still trying to collect 300 million of those dollars of electricity that was sold into the province — all paying the same water rental rate. If you think of it in those terms, it would be fair to have a revisionist thought process today in 2007 that says: "Oh, but our government is in opposition today. What we should do is actually redo the water rental rates for Alcan, because they'd make too much money." But in 1995 it was okay to sign a 20-year agreement, which actually goes past 2007 for what was in the original agreement.

It went to court. The court decided — not the government, not me — that actually, Alcan's licence does allow it to do what it is doing. I believe the NDP had the same advice from the Attorney General at that time as we got. The only thing that didn't happen is that it didn't go to a court case. DOK took it to a court case.

I don't know where it's at after that, but the court clearly said that the 1950s agreement will allow them to do what they are doing. The huge difference here is that we want to keep that electricity in British Columbia for domestic use, for British Columbians, to help us with self-sufficiency.

Now, the difference between that and the 20-year agreement that was signed in the mid-'90s by the NDP was that they could export it to wherever they wanted. By the way, it was the largest export of electricity out of Alcan that ever happened in its history for not smelting aluminum — other than when they had some strikes.

I just wanted to make sure we got that on the record. I'm sure the member may have some comments about it. If he doesn't, I'm fine. I just want to put on the record that that's factually what's happening and what we want to do.

At the end of the day, the agreement that the BCUC turned down, for reasons they felt they needed to turn it down…. Okay. At least we used the BCUC. At least we used that second stage to actually okay the contract.

It wasn't okayed. They gave us some things that we had to do. We're reviewing what they've told us to actually look at, and we're in the process of doing that now. I just wanted to make sure that was on the record. The amount of electricity, at the end of the day, after Alcan…. I think everybody understands that you don't build a plant that size on a Friday afternoon. It takes a number of years.

There would be more electricity in the initial construction that would be used domestically. But once they get production up and running in one of the newest — and cleanest, by the way — smelters in North America…. The old smelter is terrible. There is a member sitting here who would have to agree with me that the environmental concerns around that plant are not good. They are not good for the workers. I think he would totally agree with me, and he does. I appreciate that.

So it would be a new smelter. Once they'd got all the bugs out of it and got it operating, I think the maximum amount that would have been available was up to 50 megawatts of clean electricity. That's not a ton of electricity. It helps us in our self-sufficiency, and it's electricity.

Then there was some intermittent, and that's understandable. They can't build a plant run on intermittent power. There are a whole bunch of arguments around this, and sometimes we need to get all the rhetoric out of it, both the government and the opposition, to actually get on the table some of the discussions that are going on.

J. Horgan: I'll just make a few comments. My colleague from Skeena is here. While we're on the Alcan subject, we might as well press on.

I guess you never think you're just spewing rhetoric when it's coming out of your mouth. I'd like to think that I'm not just a mountain of clichés and rhetoric. I know the member for West Vancouver–Garibaldi thinks differently.

I'm also a historian. I've got a couple degrees. I understand you can't take a slice of time out of a chronology and say that what happened in 1997 or 1950 has any relevance in 2007 without putting in a significant amount of context. We don't have time for that.

I know the minister and I might be able to sit down over a diet Coke or a cup of tea and have a protracted discussion about the historical place where Alcan fits in the history of British Columbia. But I just don't believe that it's fair for him or me, perhaps, to indulge in debates about what happened when and why and how, ten years past, when he was sitting in a particular spot and I was sitting in a particular spot.

I recognize his comments. I recognize that the Utilities Commission found that the deal that was struck was not in the best interests of ratepayers. We have acknowledged that. There are no appeals pending as far as I'm aware, and we'll see where we go from there.

On the court case, I don't recall a legal opinion just for that piece of the discussion that the minister has now opened up. I don't recall the Attorney General saying that the interpretation of the Industrial Development Act is as he said it was. I certainly was flabbergasted — and I've said this publicly — to read transcripts from the Attorney General agreeing with Alcan that they had a right to do whatever they wanted with their electricity.

That's not my interpretation of the act. That's not my recollection of the legal opinions that we were getting at the time. Some of those are outside opinions. George Copley, who represented the Crown at trial, is an outstanding lawyer and probably the best we've got. If George is looking at the transcripts…. I doubt he is. He takes his direction from his political masters. He went and discharged that responsibility.

I profoundly disagree with the arguments he made in court. But when you have two parties to a contract coming to a judge and saying, "We both agree that this is what the contract says," it was little surprise that the judge concluded that if both parties are comfortable with that interpretation, therefore that must be the interpretation.

I don't know what Kitimat is going to do. Perhaps the member for Skeena can advise us on that with respect to the legal proceeding. But it surprised me that the province would in fact concede to Alcan that they did have control of the river and could sell the power wherever they wanted to. With that comment, perhaps I could just cede the floor to the member for Skeena, and then the minister could take up the dialogue with him on these issues.

Hon. R. Neufeld: Just in response to that. The court made a decision. It can be appealed. It's interesting. I actually listened to the court. We're having some of those discussions in the House as we speak. A judge made a decision on a 1950s contract. I said that I'm sure the Attorney General of the day in the 1990s — in 1997 or in any term in that ten years — would have probably given the same advice to the previous government.

Otherwise, if not — if the previous government would have thought that they didn't have that right — then I can't imagine why the previous government would sign a 20-year contract allowing Alcan to sell their electricity wherever they wanted to and allow it to continue with water rental rates that are the same rates that B.C. Hydro pays.

I appreciate things are different today than they were in the mid- to late '90s. I understand that. But that's what took place, and I can only gather that the same advice was probably given. In fact, I've had some discussions with previous Ministers of Energy in the NDP government who would tend to agree, quietly, with me that they were faced with the same things that this government was faced with.

Now the DOK has taken it to the point where it went to court, and the court has decided…. I take the court's decision. There's an appeal. I don't know what the DOK is going to do in that instance. All I know is that Alcan is trying to work closely with the DOK, and I think they've made some great headway as far as I understand — at least what I can read in the newspapers.

They've met, which is something entirely different than what took place before. That doesn't mean they've come to an agreement, but at least they're sitting at the table talking about things that would be, I think, important to Kitimat and hugely important to the province of British Columbia.

R. Austin: The minister is correct in saying that the LTEPA that was signed in '97 did allow a block of electricity to be sold by Alcan. Of course, at the time that was supported entirely by the opposition, the now Premier of the day, and yourself, I believe.

It was set up not just to allow Alcan to sell some power temporarily. It was also, of course, to make Alcan whole, because there was a lawsuit pending at the time with the result of Kemano completion being closed down. I think it was an acknowledgment that Alcan could have potentially taken the government to court and received billions.

By allowing them to sell electricity for a 20-year period at a certain amount, it was a way of making Alcan whole for the loss of Kemano completion. And as I say, it was supported by yourself and the current Premier.

I would like to ask the minister, because he obviously feels that the court case was correct: if now that Alcan has the right to sell as much power as they want forever, in the future, once they have built this 400,000-tonne smelter, if energy prices continue to go up — and

I think we'll all agree in this room that energy prices around the world and in North America are only going to go up — and aluminum prices, say in ten or 15 years time, are low…? Bearing in mind Justice Brenner's decision and that it's a globalized company with production facilities all around the world — as this is the only jurisdiction in which they could have the choice of either smelting aluminum or selling electricity — what in the long-term future is there to stop Alcan in ten or 15 years time saying: "You know what? We're just going to stay in the power business because it's way more profitable, and we'll shut this smelter down"?

Hon. R. Neufeld: It's a relatively hypothetical question, I would say, trying to guess what aluminum and hydroelectricity prices will be 20 years from now or something, but let me put it this way. It's much similar in Quebec as it is here, not for all of their projects but for many of them. Alcan can actually sell that electricity. It's been proven that they can actually go out and sell it on the market if they wish to do that.

I'm not going to go out and try to hypothetically say what will happen to either one of those products in that period of time, but I would assume that the company called Alcan would not invest over $2 billion in a new aluminum smelter in Kitimat if in fact they just wanted to close it in a few years and start selling electricity because electricity happens to be high at the time.

I think what we see is that Alcan is an aluminum smelter. I want to correct a little bit…. I shouldn't say correct. We just differ, I guess. I want to put on the record that Alcan has always had that right to sell that electricity if they wanted to. It's a proven fact when you go back in history that they've been able to do that and have been selling to B.C. Hydro almost since the conception of the Alcan smelter.

That should give the member some comfort. If they're going to invest $2 billion — it could be even more than $2 billion in today's world — in one of the state-of-the-art, best three smelters in North America, I would think that's a message that says: "We want to smelt aluminum."

I would maybe say further to that that the NDP opposition has said — and the DOK; they agree on this: "Well, we need to have 1,500 jobs, the same as we had before." If that's the case, I guess you agree with me that they should make an investment. The difference is between 1,000 and 1,500 jobs.

If that gives the member some answer to his question…. I'm sure that he would have to agree with me. A $2 billion investment isn't made on a Friday afternoon to decide ten weeks hence that you're going to do something different with it

R. Austin: I would agree that a $2-billion-and-something investment is not made lightly, but having made a $2 billion investment, what's of interest to the shareholders and to the management of Alcan is to recoup that. If it is easier to recoup that investment through electricity sales rather than smelting aluminum, I would suggest to the minister that with the profit margins being radically different between the aluminum business and the power business, there is a very real possibility that in the future, if governments don't take some control and regulation, they would simply go into the power business.

I would point out to the minister that in 2001 there was a shortfall for approximately eight weeks — two months — in the reservoir due to a lack of the snowpack that year. As a result of that, Alcan made a decision — and they have to of course maintain that reservoir at certain levels for lots of reasons, not the least of which is the fish — to close down two lines temporarily.

Those two lines, once the reservoir came back to its normal capacity, were never resurrected to produce aluminum — the reason being that the profit margin from selling power was far greater than making aluminum. So I would put it to you that it is very troubling for the people in the northwest to be put in this position where a company is given the choice between making, say, a 30-percent return on its capital or a 1,000-percent return on its capital. That's the issue at stake.

I would also like to point out to the minister that I am not someone who is living in dreamland here. I understand totally about new technology, and I understand that even though we're increasing the capacity from 275,000 to 400,000 with a new smelter, there is going to be a reduction in jobs. That's what comes through cleaner and newer technology.

I'm not interested in the number of jobs. I'm simply interested in the volume of aluminum that will be manufactured because that does translate into jobs. I'm very concerned that with the ruling from Justice Brenner, which the minister has said he supports, what role can government play in ensuring that Alcan…?

It's not a hypothetical question. They've already done this — right? They did it in 2001. What's the role of government, and how can they ensure that even with this $2 billion investment, they won't ensure that they actually keep the smelter running?

As I pointed out in my earlier comments, Alcan is a global company. They can produce aluminum in lots of different plants all over the world, and if there is one jurisdiction that allows them the choice between electricity sales or aluminum production, then that's the one smelter around the world that they could easily say: "Hey, this is a way to shut down." There aren't many businesses where when you shut down your production you can actually make more money.

Further to that, I would just like to comment…. There is a similar situation — and the minister would know this, of course — with regards to Teck Cominco. Teck Cominco had a strike last year and stopped production because of the strike. The company then found that of course they could make way more money selling power from the Waneta Dam than actually smelting. So we're still in that situation. I don't think the minister has clearly addressed that, and I would like to hear his comments on it.

Hon. R. Neufeld: First off, I'm glad the member put on the record that the loss of the 500 jobs in Kitimat is

not a concern. I understand that now. And he understands that new technology would require less jobs. I'm glad that we're on the same wavelength because I think that happens in all industries.

It's unfortunate. I mean, none of us would like to see that happen. I don't think the member would like to see it happen, and I don't like to see it happen. I would rather see…. The more jobs, the better. That's what this government is all about. That's why we have around a 4-percent unemployment rate — from the 1990s with an average of 12 percent.

We actually want to have jobs in the province, so that's our drive, and that's one thing that we've been very successful at. In fact, British Columbia has created more jobs than any other jurisdiction across Canada in the last five, six years. I think that's remarkable.

I think we want to continue down that path, and getting Alcan to invest $2 billion in a new plant in Kitimat is great. I think it's great for the people in Kitimat, for the tax base in Kitimat and for the people that work in that plant.

The member does agree with me. The environment in that old smelter is not good. We need to update it and get a new process in there so that the men and women that work there have less hazards to work in than they do now — understanding it's an industrial setting.

As I understand, going back to what the member said, it's the only place in the world — I think he said the world; he might have said North America — where Alcan can choose to sell electricity or aluminum. I'll have some staff…. I'm sure they're watching. They will check it out for me, and I'll correct the record if in fact I'm saying something wrong. I believe that in Quebec there are some of the same experiences that we're having here.

Here we have a giant company that came in and invested a huge amount of money and created an awful lot of jobs in the northwest part of British Columbia in the 1950s. Today it's 2007, and they want to invest a huge amount of money again to continue that legacy and create jobs in northwestern British Columbia. Are we going to, after a court…? When I say I agree with the court, actually, I do. When the court tells me to do something, I generally say: "Well, I guess that's the law, and I ought to do it."

What I'm saying is that we agree with the law. Now, that can be appealed — who knows? — and that can be changed. But at the present time a judge has made a decision that I believe, in their heart of hearts, the NDP in the 1990s knew as well as we did, because many of the same staff are in the Attorney General's ministry today that were there when the NDP were there…. The 1950s agreement allows Alcan to do with that electricity what they want.

I know there were some changes with the cancellation that was done by the NDP of the Kemano completion, a $500 million project. There were some things that were done to mitigate those kinds of things — and I appreciate that — and they needed to be done because there was a huge exposure to everyone in the province.

What I meant by that 20-year agreement was that the previous government must have agreed that Alcan could do either because they allowed them to export that electricity to the United States — not even consume it in British Columbia. We can beat around this forever, but this government is not going to go in and tell Alcan how many potlines they have to run. I'm sorry. Neither did the last government — the one in the 1990s. They didn't go in and say: "Alcan, you have to run this many potlines." That's not our job — at least, what I think.

Alcan is here investing that kind of money and creating those kinds of jobs, and if at the end of the day they can sell some electricity, they will sell some electricity. That's the decision that that company makes.

Your hypothetical. I'm not going to even answer that because I don't know hypothetically what's going to happen 20 years from now. I mean, it's all hypothetical. It's trying to figure out how many angels can dance on the head of a pin. We could stand here and debate that forever, and I don't think we'd get anywhere.

You and I both know what the court has said so far. I might be different, but the court said that. I agree with it. I mean, what else can you do when you're in government? The court tells you to do something, and you actually do it — at least, you should. That's generally the way it works.

Hypothetically, and all the things that you're talking about — whether they can sell a whole bunch of electricity and change their direction…. I'll go back to you and say that they're not making a $2 billion investment in Kitimat — a place they've been in since the 1950s — to shut it down, I wouldn't think. Now I don't sit in that boardroom. Maybe the member has an opportunity to or to influence that. I'm not sure. But they will make that decision — not a government — about what they want to do. Really, $2 billion is a lot of money. I wouldn't think they would invest that just willy-nilly.

R. Austin: I appreciate the minister's reply, but it isn't really hypothetical in the sense that the scenario that I am alluding to has already taken place in Kitimat, and that's what worries the citizens of Kitimat. They have long loved Alcan. I realize this has been a fight that's come up about criticizing the best employer that we have in northwest B.C. But really, their fight should have been with the government of the day deciding that Alcan simply could use much more of that power.

I understand that there was a 20-year agreement, but it was a set-aside from the original contract. As the minister would agree, when in opposition, he supported it. It was to make Alcan whole for the exposure that we had after KCP. By the way, the current Premier, of course, also agreed that KCP should not have gone ahead.

I just want to make a comment in terms of the minister saying that I don't care about the job loss. What I'm saying here is that I understand that there will be fewer jobs. Of course I care about the number of jobs, but as the MLA it's not my job to just simply look at Alcan or the government policy and try and relate it to jobs. I'm more interested in the power because, after all, it's the

water resource that the government has the responsibility to be the custodian of.

With regards to the recent decision, I would like to ask the minister this. Last year when this smelter agreement was made public, the Premier said: "This is a good thing for British Columbia because it is a smelter-first agreement." It is a guarantee that Alcan has to use the large portion of the power to smelt, and they can sell a part to essentially subsidize this smelter. And that's what it is.

Let's be honest. It's a giant subsidy, except instead of coming from the Crown, it's coming from the Hydro ratepayers. Alcan has said very clearly that without that ability to sell power — i.e., to make extra profits, windfall profits beyond aluminum — then the deal doesn't work. So it's a subsidy.

I would ask the minister this. The original agreement that was put before the BCUC was a smelter-first agreement. In light of the fact that we now have the Justice Brenner decision that states very clearly that that is Alcan's power to do with whatever they wish, how will the next agreement that you are currently negotiating guarantee that it's a smelter-first agreement?

R. Austin: Could I ask this, then? You've applauded the fact that the district of Kitimat is speaking and working with Alcan. Do you not think that it would be useful for the district of Kitimat to also be a part of negotiations with regards to a new deal between Hydro and Alcan? They are the legitimate, locally elected government. Do you think that they should be a part of those negotiations?

Hon. R. Neufeld: Those negotiations are ongoing. They are done in confidentiality, and I would assume that's a normal way to do things like this. The Alcan meeting with the DOK…. I don't know what discussions they had with them. I was not there — the district of Kitimat, I should say — but I'm sure that they had some discussions about what's going on.

I would say that they wouldn't have had discussions about what the new discussions are in relationship to what's happening between B.C. Hydro and Alcan. Certainly, I'm encouraged, and I'm happy. I'm quite pleased, to be perfectly frank, that the people in Kitimat — the mayor and the administrator — are seeing their way clear to work with…. Likely, it's a pretty difficult situation. I mean, one can only imagine how difficult that would be, after taking someone to court, to then be able to sit down with them and start to talk about the issues that are specific to Kitimat but also specific to the province.

It's not just a benefit to your constituency to have Alcan there. It's a benefit to me where I live in northeastern British Columbia, it's a benefit to the people that live down here, and it's a benefit to the people that live in all the rest of the province, just as oil and gas development is as much a benefit to everybody else as it is where I live. It's not just my decision in northeastern British Columbia that because I live there, and most of the natural gas comes from there and 35 percent of all the electricity generated in British Columbia comes from my constituency, I should have the say of what happens in negotiations.

No, I'm happy and I'm pleased that they're having discussions and that they're meeting, and I'm sure that those meetings are going very well.

R. Austin: I just have one other question. As you negotiate the new agreement, as the last one was turned down by the BCUC as not being in the public interest, do you think there is any way to structure an agreement that would recognize that as Alcan is going to have the right to sell a large block of power…? I would like to comment for one second about the terms of Alcan selling power.

I will agree wholeheartedly with the minister's contention that Alcan has always sold power, in the sense that in order to balance the reservoir, small amounts of power have always been sold since 1950. I want to differentiate between power that was used for the purpose to regulate the level of the reservoir and what I would call commercial blocks of power. When I say "the amounts of power," I would differentiate between power that was, say, 1 percent to 5 percent of the generating capacity of Kemano compared to the 140 megawatts that was allowed under the '97 agreement — just to differentiate there.

My question to the minister is: do you think there would be any place in the new agreement for some form of regional development, economic development fund, similar to what was used in the Columbia Basin Trust, in the sense that if Alcan is an economic dynamo of northwest B.C…?

In fairness to the minister's comments about B.C. being the best place to find jobs, I'm sure the minister would recognize that in northwest B.C., we do not have a booming economy. In fact, we have an economy with more than double the level of unemployment of the provincial average. That's after close to 20 percent of the population left the area to go to Alberta or the lower mainland to find work. Actually, we have still a very difficult economic situation in the northwest.

If Alcan is the economic driver, certainly on an industrial scale…. Fishing, as the minister would know, is not doing well. Tourism is still hard to generate. It's a beautiful place, but it's far from Vancouver. If Alcan is the economic generator, does the minister not think there could be some way to set aside some dollars coming out of those electricity sales to go across all of the communities across Highway 16, to help do some kind of economic regeneration in that part of British Columbia?

Hon. R. Neufeld: Well, Alcan pays some taxes to the district of Kitimat — in fact, not some but a sizeable amount. I don't know what the dollar is, but it's a relatively large amount. I think Alcan is their largest tax base. Alcan is centred in the district of Kitimat.

Other communities in the northwest actually benefit from a lot of other things that happen at Alcan — people moving around, goods and services. I know that all the communities — actually not all of them but a lot — got together and said: "This would affect us a whole bunch if Alcan were to totally shut down and pull out. We actually want them to have an agreement with B.C. Hydro and to build the $2 billion plant because it'll help communities all across the province through normal trade corridors."

Alcan is not dissimilar to the pulp mills that are situated in the city boundaries of Prince George. Prince George benefits from that. It isn't spread over all of the northwest. Prince George is the main benefactor, I should say, but the spinoff activity happens all over the northwest.

Those kinds of things have been with us forever and probably will continue to be as long as we have boundaries that are drawn by districts, regional districts and communities around industrial taxation.

R. Austin: I'd just like to get an answer on something that I've previously asked. Can the minister please tell me why, in his view, the subsidy — in order to get the $1.8 billion investment — should be on the backs of Hydro ratepayers rather than the Crown?

Alcan has stated very clearly that they can't make this investment without that subsidy that comes from selling the power. So I'd like to ask the minister: if this is industrial development and it's a subsidy to create a huge industrial development, why is this not the responsibility of the Crown rather than B.C. Hydro ratepayers?

Hon. R. Neufeld: I guess I differ in the member's…. I know he used it before. I didn't say anything, but I will now. We don't think that's a subsidy, and the BCUC in their wisdom turned down the first deal. We said it had to be commercial, and it had to pass the test of the B.C. Utilities Commission. Well, it didn't pass the test of the B.C. Utilities Commission. It sent us back to the table — Hydro, Alcan and the government of British Columbia — to see what we can do to get past the B.C. Utilities Commission and what they'll accept.

We're working on that now. I'm hopeful that, for the benefit of all British Columbians and especially those people that live in Kitimat, we can get something done to make that happen. I think those negotiations are well on their way, and hopefully, the next proposal that goes to the commission will be accepted.

J. Horgan: A few more questions on the Alcan file, if I might. I think Alcan posted profits for last year of $561 million. So we're not having a tag day for Alcan any time soon.

As the minister said and the member from the area agreed, there has been a symbiotic relationship between the people of B.C., Alcan and the people of the northwest, and everyone has benefited from that over time. All of us want to see that continue.

I've travelled to the northwest. I know the minister has as well. The economy there is not as robust as it is in the northeast, where the minister comes from, or in southern Vancouver Island where I have the good fortune of residing. So we want to try and spread that around. The minister and the executive council spend every minute of every day trying to do that, I am sure.

On the next deal, Alcan part 2…. I guess that's not even fair. It should be Alcan part 10 or 11 or 12 maybe. Certainly, I know some of the staff that are with the minister have been working on this file for a long, long time.

As I reviewed materials leading up to the Utilities Commission hearing last December, it appeared to me that the negotiation was being driven out of the Premier's office. I'm wondering if the minister can confirm that in this recent or next most current iteration of the discussion between the people of B.C. and Alcan that is still the case, or is another ministry leading the negotiation?

Hon. R. Neufeld: There are a number of ministries that are involved across government. B.C. Hydro is actually leading the file.

J. Horgan: The minister mentioned a number of ministries. Could he articulate which ministries?

Hon. R. Neufeld: The Ministry of Finance would obviously be involved, the Ministry of Economic Development and our ministry. B.C. Hydro is leading the file.

J. Horgan: I note that the minister didn't reference the Premier's office. As I looked at the materials — leading up, as I said, to December — it was clear that one of the deputies to the Premier was coordinating or facilitating the negotiation team. Is the Premier's office still involved?

Hon. R. Neufeld: I apologize. I omitted one. Obviously, a Crown agency secretariat is involved in the negotiation also.

J. Horgan: Again, I'm going to come back…. The Premier's office is no longer involved. Dana Hayden, in particular, is no longer discharged with managing this file?

Hon. R. Neufeld: Dana Hayden is obviously involved because she is involved with the Crown agencies secretariat and would actually be part of the discussions that are led by B.C. Hydro.

J. Horgan: My understanding is that Ms. Hayden is Deputy Minister to the Premier and not reporting to the Minister of Finance, who is responsible for the Crown agency secretariat.

Maybe I'll just kind of shift this. Again, reviewing materials leading up to the B.C. Utilities Commission

hearing, it appeared to me that the Transmission Corporation, obviously, was involved. You have to move the power out. B.C. Hydro was involved. Economic Development was responsible for the act. The Ministry of Energy was clearly responsible for energy policy and trying to manage all of this discussion.

As I looked at the material, it appeared to me — and this is through FOI releases and so on — that Ms. Hayden was a linchpin. She travelled to Montreal and met with senior officials from Alcan. Numerous meetings in her agenda demonstrate that she was clearly discharged with keeping the Premier apprised of what was going on. Is that still the case?

Hon. R. Neufeld: The member is right in listing BCTC. I should have listed BCTC as being part of it. Obviously, a $2 billion investment in the province is pretty huge.

In the first negotiations Dana Hayden was involved. In these negotiations Dana Hayden will also be involved as a specific resource person that we need to help us make these kinds of agreements and make sure that they happen to the best interests of all British Columbians.

I don't know if the member has something wrong with Dana Hayden being involved. There might be some other attachment the member is trying to make. We're trying to actually get a deal here — the best deal we possibly can.

J. Horgan: For the record, I have absolutely no problem with Dana Hayden. She is a public servant, always has been, and I have no quarrel with her. In fact, I said to her on the street the other day that I felt a little bit…. It felt a bit unseemly going through her agenda, but that's my job. She said that that was quite all right. The fact remains that the Premier's office is participating in this negotiation. It was abundantly clear that the Premier's office was overseeing it on round 1.

We have a negotiating team. I understand how these things come together. You bring in expertise from across government so that you can ensure that the public of British Columbia gets the best deal possible. But at least in my experience, you don't always have the Premier's office calling meetings, holding meetings and discussing negotiations with the other side of the table — in this case Alcan.

Hon. R. Neufeld: Again, I'll put it on the record. Hydro leads the file. So everybody understands — Hydro leads the negotiation file. Obviously, they will be kept in the loop of what's going on. Dana Hayden…. If you check her records again after through FOI, you will find the same thing — that she is actually being kept in the loop of what's going on.

I don't know. I would suggest to the member that by golly, if I went to FOI and asked for all the records of deals that were made when the NDP was in power, I would probably find some people from the Premier's office involved in some of the larger files.

I would almost bet that the mid-'90s agreement that was…. In fact, I can probably get that pulled pretty quick. The mid-'90s agreement that was made by the NDP with Alcan — there was involvement from the Premier's office.

That's beside the point. It's happened, it's gone, and it's not an issue. We actually want to make sure that everybody knows what's going on so that we can get the best deal for the province of British Columbia and the best deal for the people in Kitimat too, so we can get a plant built in Kitimat.

J. Horgan: I don't want to belabour this point. I know that the member for Skeena is very interested in this file. He is working with the district of Kitimat and with Alcan to ensure that we can assist to every extent possible on this side of the House.

We do periodically have to raise flags. I raise the issue of Ms. Hayden's participation only because the ball fell to Hydro to carry, as I looked at — again, from not being at the table and having to review severed documents and piece together in a Sherlock Holmes–type way — what exactly happened.

The minister knows from his time in opposition that you think you have the fact pattern. Then there are half a dozen facts that you hadn't even contemplated, and it blows your thesis out of the water. So I am pursuing this only because Ms. Hayden is charged with economic activity from the minister in the Premier's office. She participates in the file. The Crown, it seemed to me in reviewing the documents, was given responsibilities on behalf of the province that it would not necessarily have taken had it been left to its own devices.

With access to a member of the executive of B.C. Hydro with you today, I'm wondering if you could explain to me why we signed an agreement that would have penalized B.C. Hydro to the tune of, I think, $1.5 million had they not gone to the commission to defend the deal. That was part of the documents that were released with the OIC confirming the deal.

Why would we have signed something that said B.C. Hydro had to go to the commission to support the deal?

Hon. R. Neufeld: The Crown went forward to the B.C. Utilities Commission because that's where they should go. We felt that this was a commercial deal. The Crown felt it was a commercial deal. They took a commercial deal to the B.C. Utilities Commission.

Does that cause some costs to be incurred by the Crown? Yes, it does. But we would rather go to the B.C. Utilities Commission to get the approval than just making that decision in a cabinet room and saying that this is what we're going to do.

I know that's maybe a bit different than what the member understands from what took place in the '90s

when many of those decisions that involved Hydro were made in the cabinet room and not taken to the Utilities Commission. We felt it was important to go to the commission.

We take the commission's decisions seriously. They told us to go and look at a number of things, and that's what Hydro did. They filed for appeal but dropped the appeal after they got the full report from the B.C. Utilities Commission that they could read to see what they actually had to do. That's what they're charged with doing.

J. Horgan: As the deal is dead and as a new deal will emerge from those ashes, I think we'll leave this line of questioning for perhaps another time. It's unfortunate that we have to do that. I say this only because this is the venue that for me as an opposition member is the most efficient to ask for information. I always get forthright answers from the minister.

The other place, when we're more adversarial, the rhetoric…. Even though the minister and I rarely engage in rhetoric or throw back comments that either one of us has made at different times in history, this is a good way to do the business of the people of British Columbia. It's unfortunate that we can't do estimates 24-7 and leave the rest of the time that we spend in there to Oprah and other things. I'll leave Alcan for now, if the member for Skeena is comfortable with that.

We'll go back to independent power, B.C. Hydro and B.C. Transmission Corp. I do have, as a Vancouver Island resident, some concern that the transmission lines are allegedly going to fail at any moment. I'm wondering if I could get a bit of an update. I understand the courts have ruled that the transmission company can proceed with its plan to get to Vancouver Island. I'm wondering if the minister could let me know what the time lines are on that and when they anticipate being able to hook up with the new system.

Hon. R. Neufeld: I'll just wait for the BCTC folks to come up here to help me with that response a bit.

To the member for Skeena, I appreciate those questions. I know that he is working hard on what's taking place in the constituency that he represents, and I just wanted to put that on the record. I hope — even though we have this discussion here — that at the end of the day what comes out is positive for all British Columbians, but especially for those people in Kitimat. I appreciate the questions that you asked around Alcan.

J. Horgan: Now that we're all settled in our places with bright shiny faces…. I've always wanted to say that, so now I've done it.

But with respect to the Transmission Corp, there are a couple of questions that I wanted to ask. As a resident of Vancouver Island, I know there has been concern that the cables coming from the mainland to the Island have been in need of upgrade and replacement for some time. Some residents of Tsawwassen and the lower mainland have been concerned about the route, existing and projected. I'm wondering if the minister could update me on the status of plans to get new cables laid and power established on Vancouver Island.

Hon. R. Neufeld: Construction has started on different segments of VITR, and the schedule is on time for October, I believe, of 2008. British Columbia Transmission Corp, BCTC, has in place some bridging plans — something to do with the cables that are there now — just in case it takes a little bit longer.

I don't think that on a certain day or on a Friday afternoon at the end of October in 2008, everything will quit. But that's what the engineers actually tell BCTC, and that's what I'm told. We have to try to make sure that we meet that date and not prejudge what they're trying to say. That's what they've told us, and I think everything's going along well. It's not without controversy; that's for sure. The member talked about that. I agree that there's lots of controversy around VITR in different areas, specifically in the lower mainland.

As we understand, it's all on time, and they'll have that supply on Vancouver Island by '08.

J. Horgan: So I can conclude that legal proceedings have ended, appeals have been exhausted, the company is set and ready to go and that no other hurdles are foreseen in the near future.

Hon. R. Neufeld: Actually, the TRAHVOL group that has appealed the decision has the ability to go to the Supreme Court of Canada, if they wish to do that. That's out there yet. That appeal could take place. I don't know, and I'm not aware that they're going to do it. That's a decision that I guess they'll make in the fullness of time.

We continue to work with everybody as best we possibly can to help them understand the difficulties we're having and understand the difficulties they're having at British Columbia Transmission Corporation in actually building some new lines to Vancouver Island over right-of-way that they've had since the 1950s.

J. Horgan: EMFs, electromagnetic fields, are a concern for many people in the corridor in the lower mainland. I know, through my own research — through the Centre for Disease Control and various other agencies that I've contacted on these issues — that the evidence is inconclusive as to whether or not transmission lines have a deleterious effect on health with sustained exposure.

I'm wondering if the commission has done any recent research or proposes to do any research in the near future to shed some more light on this phenomenon.

Hon. R. Neufeld: The commission is, if I heard the question…. Was it the commission or BCTC?

Hon. R. Neufeld: Okay, yeah, because the commission is with the Attorney General's ministry.

Actually, BCTC does. I know they've informed me that the World Health Organization, the Canadian Cancer Society…. They take all that information into account when they do these kinds of things to try and build transmission lines. So far I don't know whether they're doing any more study on EMFs, but they might be. I'm sure they do on a regular basis because of all the transmission lines that they're responsible for across the whole province.

J. Horgan: I appreciate that the BCTC…. I made a commitment to myself to try and not talk in acronyms, but it's impossible. We're in government. We have no choice. Sometimes you choose the wrong word.

The transmission company, BCTC, is not in the business of doing medical research. I understand that. I would assume and appreciate that they avail themselves of the most current data on the subject. Could the minister perhaps update me on the last time the World Health Organization took a look at this or how current the data is that the BCTC is relying upon?

Hon. R. Neufeld: BCTC has in the past accessed the information from, for instance, the World Health Organization or the Canadian Cancer Society. They don't know the exact date — the last time they would have updated anything from those organizations. But I would assume that with the work they're doing, they do regularly when they need to actually access whatever information is available at the time.

I'm told that the World Health Organization is coming out with a report on EMFs sometime in the near future. They don't know when, but it's not specific to VITR, Vancouver Island transmission reinforcement. It's specific to EMFs wherever you are.

J. Horgan: I look forward to that information when it becomes available. A suggestion might be to post some of this stuff on the website, if it's not already, so that the public, when they do hunt for information on this issue of EMFs and their effects….

As someone who is paid by the public to pay attention to this sort of thing, I find it difficult. I have 1¾ staff to help me with these issues. Perhaps just as a suggestion, if the company could post some of this information on their website, it might assist the public — if they don't do it already.

The other issues with respect to Vancouver Island. We have some wind farm proposals and some IPP proposals on the Island. I'm wondering what the status is of plans to link those proposals from particularly the north Island down south to the load centres.

Hon. R. Neufeld: There is no wind project on Vancouver Island. But any of the independent power producers that have contracts or energy purchase agreements on Vancouver Island are working with the British Columbia Transmission Corporation and also B.C. Hydro in making sure they're tied into the grid.

Just further to the last issue we were talking about, EMFs, BCTC does post the links to the website for the information they acquire, so that people can actually go to the website and get a link to where they get their information from. Rather than repost everything, they put the link in place.

J. Horgan: I thank the minister for that. But I thought there was a wind farm proposal for North Island that had an energy purchase agreement from the 2003 call. I'm assuming that in the 2007 call, based on the new criteria in the energy plan, if that project has fallen off the board, there will be another one coming forward to replace it.

I understand that the BCTC can't anticipate projects, but I was fairly certain there was one approved in 2003.

Hon. R. Neufeld: The member is correct. Holberg was in the 2003 call. That one didn't come to fruition. There was a cap at that time that Hydro had put on what they would pay for any type of electricity. It was a Holberg farm for a long time. They finally elected, at the end of the day, to use one of their options, and that was to pull back and look at the ability to bid into other calls that are coming forward.

As I'm told, none was bid into the last call either — the one made in 2006. Hopefully, in 2007. There are a number of projects. Two are in the Peace country — 325 megawatts of wind energy in total, I believe. Two of them are in the Peace country — the bigger ones. The other one is Mount Hays close to Prince Rupert.

J. Horgan: There are IPPs on the islands that have energy purchase agreements. What plans does the commission have? I know from my discussions with the IPP community and attending conferences that they have a very positive relationship with the transmission company. I'm not suggesting that the discussion and negotiations aren't at a high standard and in a timely way.

Again, with the expectation that communities in the north Island — and my colleague from North Island is here…. The regional district is curious. They are not, obviously, bidding in to proposal calls, but they are anxious to see (a) the economic development and (b) the security of power and some hope that the diesel power that they depend on now will be shut down in the near term.

Again, I appreciate that if people aren't bidding, then you can't force them to do so. I think Green Island is one in Gold River. How are those discussions going — any problems?

Hon. R. Neufeld: Green Island, for instance, is already tied in. There is a grid that was there before, so that one was easy to do. Without trying to pick out any others, because I don't remember them off the top of my head…. But if they acquired an energy purchase agreement with

B.C. Hydro, they would have had discussions with B.C. Transmission Corporation to incorporate that into what they thought the cost would be to actually get all of these projects hooked together and into the grid system. So as I know, all those discussions are ongoing and going very well.

J. Horgan: Still on the Island, there is a company called Seabreeze. The minister would be aware of that organization. They have a private proposal to bring transmission lines from the Olympic peninsula to Victoria, and also some suggestion of going up the Island.

Is the BCTC aware of that? Are they engaged in any joint venture discussions, or are they in competition?

Hon. R. Neufeld: The corporation is aware and has had some contact with Seabreeze. It's the Juan de Fuca connection. They've talked to B.C. Transmission Corporation about what the interconnection fees would be, and they've been given that information.

J. Horgan: I'm smirking because my colleague from Vancouver-Kingsway has joined me. I was reading other information, and I didn't…. So I'm wondering if I could indulge the minister to repeat his answer.

Hon. R. Neufeld: It's the Juan de Fuca connection that Seabreeze is talking about. They have been in contact with BCTC in regards to what the interconnection costs would be. BCTC has given them those costs. And no, BCTC is not a partner with them.

J. Horgan: With respect to Highway 37…. I'd like to spend some time on that, if I could. There have been allegations by some, which have BCTC and B.C. Hydro electrifying Highway 37 for the exclusive purpose of powering mines. I know I'll be having a more detailed discussion with the minister of state later on this afternoon on that subject. But could the minister inform this committee and the House of the status of the electrification of Highway 37?

Hon. R. Neufeld: The northwest transmission line is a large project that BCTC, B.C. Hydro and the government of British Columbia are looking at. There are negotiations with the companies that are proposing to build mines in the northwest, and they're ongoing. I would love to tell the member what's going on, but I can't until those negotiations are complete.

As we move that forward, I know they've been ongoing for quite a long time, not by design by us but by a sequence of events that are taking place. There are a lot of things to do with first nations negotiations, with the Tahltan. They're not holding it up, but that's part of the process.

There were also, to be fair, a lot of discussions about who was actually going to own some of those mines at the end of the day. Last year some companies were trying to buy out other companies, and so we have to be very careful about what we talk about and how much we talk about the northwest transmission line until such a time as it could be a reality. So those negotiations are seriously ongoing.

I can say that the employment that would come out of building that kind of transmission line into an area that does not enjoy electricity — most of their electricity, not all of it, is generated by diesel fuel — would be a benefit to the communities along Highway 37. I live in an area in northeastern British Columbia that does not have the Alaska Highway, for instance, tied into the grid, and it certainly has some negative effects on the people doing business along the highway.

These kinds of things are beneficial not just to the mining industry but to the province as a whole. It creates employment and activity well into the future, and on top of that, it creates lots of employment and opportunities for first nations that live in the area.

J. Horgan: I know that the BCTC's capital plan anticipates some $3 billion in expenditures over the next seven years, which is ambitious and timely, because as the minister says, there are portions of the province that are not currently being served adequately. There will certainly be an argument at the Utilities Commission when something like Highway 37 comes forward. But is the $3 billion capital plan…? I am assuming that doesn't include Highway 37.

J. Horgan: Could the minister advise on what the projected capital cost of electrification would be?

Hon. R. Neufeld: About $290 million, you could comfortably say. That's an awful lot of money to say "about." About $300 million.

J. Horgan: I agree, and I can't resist saying that the Minister of Tourism, who is not here today, says that it's about $800 million for the convention centre. I'm sure that $290 million is less than $800 million, and the benefit to the industrial activity in the area would certainly be significant. But again, we'll worry about what the commission says when the commission has something before it.

I'll have a chance with the minister of state this afternoon to talk about what the benefit would be to industrial activity in the community, but maybe the minister — and I know he feels strongly about this — would give me a few minutes of his views on how quickly we should be proceeding with this.

Hon. R. Neufeld: As I said, those discussions on Highway 37, on how we approach the process, are ongoing as we speak. The mine itself could use diesel generation, if it wanted to, but that's a huge mine to power by diesel. They have some other options available to them.

The Forrest Kerr project, which they purchased, is not far from the mine, and that's a smaller IPP. That

could provide some of the power, But again, it's intermittent, so it doesn't provide the firm power. There are a whole bunch of issues that we're trying to deal with and kind of encapsulate in the best way possible.

The member has been here long enough to know that when you're looking at some of these projects, that big, there is no absolute 100-percent assurance that it's going to happen. With that in the back of your mind, and I'm sure you've been involved with that, you have to think about: how do you move this forward? How do you actually get a $300 million line built into the area if something goes wrong on the mining side that has got nothing to do with the miners and everything to do with world prices, and nothing happens on the land base?

Those are some of the challenges, which are not easy. What we would like to do is be able to build the line, if in fact that is all okayed, and at the end of the day, it's envisioned that you would build the line making sure you have some off-ramps so that you can actually back away from it, at some point in time, without a huge expense out there for the public or the ratepayer.

Those are the kinds of discussions that are taking place. What we would like to do is arrive with the electricity about the time it's needed. You know, that's always a difficult thing to do, also, and I'm sure the member will agree with me, understanding some of the things that are going on in the construction world today. But I don't think the construction world and building lines would be any different than the construction world and building mines. That's the kind of magic, at the end of the day, that we would like to see happen, if in fact all of this is okayed.

J. Horgan: I agree with the minister that you've got a pretty significant stranded asset if copper prices go into the tank and everybody rolls up their trucks and moves to another part of the world. So I appreciate that, and I'm glad the minister had the opportunity to put that on the record. I agree with him that the industrial activity certainly is going to be a benefit.

I've met with representatives of the Tahltan. They have concerns about the number of mines in their traditional territory. They want to see the employment, but they have a limited number of people that are able to do the work. Many of them are currently engaged at Eskay, and they would like to see a sustainable progression. But commodity prices quite often dictate that activity take place when the sun is shining, as it were, and this electricity is an integral part of that.

I appreciate the time to discuss these transmission issues, and with that, I would like to go to a bit of a discussion on Powerex and electricity trade. The minister touched on California earlier on, when we were discussing Alcan, and he made reference to $300 million still owed by California for power sold in 2000-2001. I just wanted to ask if I could get a more exact number from the minister. I know he was speaking off the top of his head. My recollection is that it's about $250 million, but if we could just get some clarity on that. And what is the state of the current litigation?

Hon. R. Neufeld: It's $268 million U.S. That changes every day the money exchange changes. No one has any control on that. It could go up by a few million; it could go down by a few million in the wink of an eye. Anyhow, that's why the $300 million Canadian.

As I'm told, it's proceeding through the court system in the U.S. It's a slow process. There has been a huge amount of discussion and negotiation, obviously, as the member is aware, after the California crunch and all the fallout that came from what took place in California from the manipulation, and all those kind of things. The one thing we can be happy about in British Columbia is that, to my knowledge — and I believe Hydro would correct me if I'm wrong — we have never been accused of any collusion within B.C. Hydro or the province of British Columbia at any time.

We simply sold into a system that was broken by their own devices, not ours. We kind of got caught in the middle, and we're trying to get that money back for the people of British Columbia, understanding that that's a very difficult process south of the border.

I remind the member that that's why we'd like to have enough generation of electricity in the province: so we can keep our own lights on rather than depending on the U.S. for electricity.

J. Horgan: I thank the minister for his response. I was there at the time, and I remember it very well. We were self-sufficient then, I thought, but some of the data we learned yesterday is that we did have a net disadvantage.

I want to apologize to the committee. My colleague from North Island had a transmission question, so I've stopped the staff person at the door. I'm wondering if we could ask the question now and then get a quick answer.

C. Trevena: It's one question that I hope the minister will be able to help me with. I know he has had correspondence from the Ka:'yu:'k't'h' band in Kyuquot about Hydro taking over a private power line. I wonder if the minister has been able to deal with this yet or whether it's still something that's being worked upon.

Hon. R. Neufeld: This has a bit of history and probably will have a lot more history a few years from now or a year from now, or whatever.

The line is owned by Synex. They have a CPCN — certificate of public convenience and necessity; we'll use the acronym. Because the band pays — and the member is aware of that, I know — a fairly high rate for their electricity, they applied to the BCUC to see if they couldn't get that line transferred to B.C. Hydro. As I understand it, the B.C. Utilities Commission said no. They stand by the decision they made in 1999 to issue that CPCN.

The band is now, as I understand, working with B.C. Hydro and with the ministry's involvement to see what we can do to try to reduce the rates for the people that live there the best we possibly can. So those things, as I'm told by the staff, are being worked on and will continue to be worked on.

C. Trevena: I'd like to thank the minister for that, and I'm very pleased that the staff are working on this. Anything that can bring down the cost of power to the community would be a great help. Obviously, they want to be on hydro rather than on diesel, which is polluting and expensive.

J. Horgan: Going back to Powerex. As I understand it, Powerex is marketing the downstream benefits from the Columbia River Treaty on behalf of the province. This is an asset that belongs to the Crown, not to the Crown corporation. As the marketer for B.C. Hydro, Powerex is well positioned, and we don't need to go into too much detail about what Powerex does.

I'm wondering if the minister could, first of all, advise me if he would consider the downstream benefits to be part of our self-sufficiency objectives. Even though those megawatts, those electrons, are produced in the United States, they are an asset that belongs to the province. I'll start with that

Hon. R. Neufeld: The member is entirely correct. They belong to the province of British Columbia — every individual in the province.

We actually have Powerex sell that electricity which is generated in the United States within the United States at the best price they can possibly get for that electricity when it's generated. Those dollars come back into general revenue for the benefit of all British Columbians.

Our self-sufficiency is the borders of British Columbia, not the United States, so that wouldn't count in self-sufficiency. Obviously, they're there. If we needed them, if something really went wrong here, we could actually pull those back into British Columbia. But I think the member is well aware, too, that those could end.

Those aren't indefinite and forever. There is an opportunity for…. In fact, the first opportunity comes in 2014. As I understand, the downstream benefits happen 30 years after the date of the construction of three different dams in the Columbia system. I believe it is after 60 years that, with ten years' notice to Canada and British Columbia, there could be some negotiations on what takes place from there on. We've not had any indication that anything like that is going to happen, but that possibility is there.

J. Horgan: Am I correct that the upper end of the downstream benefit is 1,400 megawatts and that the lower end is 1,200?

Hon. R. Neufeld: My notes tell me that in '06-07 capacity is 1,220 megawatts. In '07-08 it is anticipated to be 1,217. In '08-09 — again, this is all anticipated, depending on water levels — it is 1,221. And in '09-10 it is 1,326. Those are estimates — the '07-09 numbers.

Hon. R. Neufeld: I'm sure the member is aware of this, having been involved with it for a while. It's a relatively complex process of how that's worked out. We get half of the electricity generated in the U.S. as a result of the Canadian treaty, whether there is high water or not. That's also affected by thermal generation that's in the Pacific Northwest that fills up their capacity.

It's a process that has worked out. This is something that was agreed to a long time ago, and it's a process that worked out. The staff tell me that whether there is high water or low water probably won't make that much difference because of how much thermal capacity they have to have for power.

J. Horgan: That's exactly where I want to zero in. This is an extremely valuable product that is not buffeted by the vagaries of rain and snowpack. It's constant more or less in the 1,200- to 1,300-megawatt range, and it is owed to us by international treaty. I'm wondering: when B.C. Hydro is calculating its requirements to meet peak demands, would they at any time contemplate factoring in this resource to meet our domestic needs?

Hon. R. Neufeld: This is a great value to the province. In fact, it would be hard to envision that when this deal was actually made, people would have been able to think out this far how valuable it would be and in what way, and I'm sure they didn't. But someone was obviously bright enough to think about these things.

It's a great contingency for us to have. As I said earlier, if something absolutely goes really wrong here in the province — let's say we have a dam failure or something; heaven forbid that would ever happen — that contingency is there. If you took that contingency now and said, "Look, we're going to include the Columbia downstream benefits in our firm capacity in the province to provide energy," then we don't have that contingency that is now outside of our borders. That's why in our self-sufficiency we said we want to be self-sufficient within the borders, so we continue to have that contingency.

There is nothing that says this is definite forever. There could be some negotiations further on that say: "I'm sorry. We're going to negotiate our way out of this." That's always a possibility. Like I say, I've not heard that that's going to happen. As I understand, the first test will come in 2014 if in fact the province and Canada are advised that they wish to renegotiate the first downstream benefits that accrue to British Columbia.

J. Horgan: I can't contemplate a situation where our partners in the treaty would want us to no longer hold water in our reservoirs so that they can meet their

needs south of the border. But I agree with the minister that anything is possible, and we can't predict that.

On the insurance policy notion of the downstream benefits, I was under the impression that Hydro viewed the Burrard Thermal as a thousand megawatts of insurance, should it be required. Is it not more likely that the revenue, which is significant…? I think it ranges year to year, depending on prices, to be anywhere in the neighbourhood of $370 million to $450 million in revenue to the Minister of Finance for all of the good purposes that the government puts that to.

If you've got a thousand megawatts at Burrard Thermal that we're not using now and that we would only want to use in the event of an emergency, why have two emergency policies?

Hon. R. Neufeld: Burrard is not an insurance policy; Burrard is part of the firm electricity that can be produced in British Columbia. The other thing I would say about Burrard is that it's highly inefficient. The member knows that. In fact, it's very inefficient. That's part of the problem that B.C. Hydro is facing now. It's part of the firm power, not an insurance.

J. Horgan: Noting the hour, I ask that the committee rise, report progress and ask leave to sit again.

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