Hansard — Tuesday, March 11, 2008 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


Second Reading of Bills		10403
	Housing Statutes Amendment Act, 2008 (Bill 10)
	Hon. R. Coleman
	D. Thorne
	Hon. R. Coleman

Statements		10405
	Anniversary congratulations
	Hon. R. Coleman

Committee of the Whole House		10405
	Forests and Range Statutes Amendment Act, 2008 (Bill 8)
	B. Simpson
	Hon. R. Coleman

Proceedings in the Douglas Fir Room

Committee of Supply		10416
	Estimates: Ministry of Small Business and Revenue and Minister Responsible for Regulatory Reform (continued)
	C. Wyse
	Hon. R. Thorpe
	D. Cubberley
	J. Brar

Hon. M. de Jong: Mr. Speaker, I call second reading of Bill 10, the Housing Statutes Amendment Act, 2008. In Committee A, I call Committee of Supply. For the information of members, it's continued estimates on the Ministry of Small Business and Revenue.

Hon. R. Coleman: Mr. Speaker, I move that Bill 10 be read for a second time now.

The government is committed to creating a greener B.C. building code and strengthening the safety of buildings. The amendments under this act ensure that B.C. can construct greener buildings and respond to rapidly changing building technology.

Bill 10 proposes amendments to the Local Government Act, the Community Charter, the Vancouver Charter, the Architects Act and the Engineers and Geoscientists Act.

It is a first step in providing tools for consistent and safe application of the B.C. building code. The amendments provide local governments with the authority to make bylaws related to energy and water conservation, reducing greenhouse gas emissions and improving access to buildings for people with disabilities.

It also permits the Minster Responsible for Housing to designate an official to make binding interpretations of the B.C. building code. This will add clarity and will lead to more consistent application of the code.

It will allow professional associations to establish building specialist designations for architects and engineers whose expertise in complex building technologies will improve safety and more effectively meet the objectives of the building code and regulations. It will provide local governments with the authority to require those specialists to sign building plans and other documents required for a building permit.

Bill 10 will also include amendments to the Local Government Act which will ensure that the B.C. building code applies to significant repairs and renovations of buildings as well as to new construction. It will clarify the minister's authority to provide an exemption to the building code or regulations.

In conclusion, the proposed amendments will improve the way buildings and construction are regulated in B.C. and support a greening of the B.C. building code.

D. Thorne: I'd like to say that I didn't have very much time to look into this overnight. It was produced yesterday, so this is the best that I can do with short notice. I expect to have many, many more questions when we actually get into the sections.

Looking through some of the notes that I have made here, on the face of it I think that this is a move in the right direction, certainly regarding having a greener building code. I mean, this is something that people in the municipalities, larger cities particularly, have wanted for a long time. They have been waiting for this regulation to actually start.

However, I do have some concerns which may be alleviated, as I say, when we get into section 3. I would just like to go through right now and talk about a couple of the sections.

Most of the sections that I can see — sections 2, 6, 7 and 8 — are mainly, as the minister said, adding some extra powers to the municipalities, regional districts and the city of Coquitlam through the Community Charter and the Local Government Act, and the Vancouver Charter — a few more authorities around building permits and building codes in the areas of disability access, conserving energy and water, and greenhouse gas emission reduction. Those sections, I think, are pretty clear by just reading them.

However, from my previous experience on council, I'm wondering if section 3, which amends section 55 in the Community Charter…. I recognize that this is in here because we have to add the definition of "qualified professional" into the Community Charter in order to make any of these other things work. I know that there has been a lot of discussion in the larger cities — I'm not as familiar with the rural areas, but certainly in the larger cities — about city inspection services in total. Certainly, a lot of cities are very nervous about doing inspections and would probably like to eventually get out of the business of doing inspections through municipalities — rather, having qualified or certified professionals responsible for specific parts of a house or a building as it's being built.

While it may be moving in a direction that the UBCM and the cities would like to see, I think that it is a huge step, when we move into this area, where we're expanding the definition of qualified professionals and giving them the ability, through law, to do the inspections, possibly instead of — that's where I'm wondering if it's "as well as" or "instead of" — the city inspectors themselves. I'm concerned about municipal inspection and the totality of oversight by the municipalities and what could happen to that down the road, because that raises all kinds of issues around liability and insurance.

If it makes it easier, I will call it the consumer. Is the consumer going to be protected? I mean, up to this point, if you build a house and it's inspected by the city as you go along, the city signs off on it and you get your occupancy permit, and if something goes wrong with the house that the inspector from the city didn't notice or the builder inadvertently made an error that wasn't noticed by the city, then you had recourse with the city.

If you were building a house, you didn't have to go and try and sue the builder of the house or the architect or the electrician or any of the various subtrades that would be working on the house.

If we move in the direction of qualified professional doing the different levels of inspection, who is going to be responsible? Who will I, as a consumer, be able to get recourse from if a problem arises? I'm hoping that as we move into the third reading, the minister will be able to reassure me that we are looking at those issues.

Most of these qualified professionals will be small businesses, very small businesses. Quite a lot of these engineers and environmental technicians and architects work on their own, basically. They come out of school, and they basically start their own business, so there is just them. Will they have the ability to get enough insurance to cover a condo building, for instance, that may have huge problems and that he or she signs off on?

Those are the concerns that were raised with me in section 3 around municipal inspection. For an example, in rural British Columbia a couple of years ago I remember that we changed regulations around septics. I mean, liability issues are one thing that I've already mentioned, but there's also been, I understand from my friends….

I have a place on Mayne Island, and certainly that's a rural area. Looking at the price escalation in putting in a septic field, it has tripled or quadrupled. I'm wondering if that is going to happen across the province and across the board with all of these inspection services and the ability to put in your septic, or whatever. Will there be huge price increases, and how is that going to affect the housing market and consumer protection?

I understand that we have to change the Engineers and Geoscientists Act in order to give them the ability to consider what would be a specialist and give that designation. I'm hoping that this is not going to diminish the powers of the municipalities, because I understand that the purpose of this bill is actually to increase the power of the municipality. The things that I'm concerned about so far all look to me, in the end, that some of the powers of municipalities could be diminished.

I've mentioned the compensation for owners. I'm also wondering when and if cities are no longer involved in doing inspection and we do have qualified professionals doing most of the work and the inspection, how will the cities be liable? Is there a concern that cities may also be wondering about compensation for issues themselves?

Also, looking at the section that allows the minister to make regulations establishing and adopting standards and to designate an official to do those same kinds of things, I'm seeing that this is giving the ministry much more power to perhaps override the municipalities. That could be a huge concern. I'm hoping, with this cursory overview I've done and my municipal background, that I'm just overreacting to some of this stuff. But I am concerned that they might be able to override the municipalities.

There have been, in the past couple of years, other bills that have passed through this chamber that have in fact diminished the powers of the municipalities and cities across British Columbia. I think we're all aware of which bills they are, so I'm not going to go into that this morning. I am concerned about the centralization of power here in this chamber rather than in the city halls and town halls across the province.

That pretty much covers my comments for second reading. I look forward to the minister's comments and to third reading of this bill.

Mr. Speaker: Seeing no further speakers, the Minister of Forests and Housing closes debate.

Hon. R. Coleman: I think this probably is a committee stage debate type of bill. The reality, though, just to clarify some of her concerns off the bat, is that septic fields are not in the building code. They're actually managed by the Ministry of Health by a process of theirs. There's no question that we had to change to new technologies, because we lag here on the rest of the world, frankly, on how we handle our solid waste management.

The certified professional has actually been in place in Vancouver for probably…. Well, I used one in 1989 on a building I did in Vancouver, where you could go hire a certified professional who was conversant in the building code and building structures and have that person replace the process of the city of Vancouver for their building inspection and department. It was seen as an efficiency for Vancouver, simply because that allowed them to have somebody skip a nine-month process that wasn't necessary if you had a certified professional.

It's something that has been asked for not just in the municipal areas and in larger municipalities with regards to some of the issues in and around liability and concern but also in the rural areas, where there are no standards and no training. In many areas nobody is qualified to actually do the inspections with regards to it.

This bill is actually enabling, as much as anything, because there are complex issues with regards to the building code. It's probably the most complex piece of any file that I have ever managed, simply because the building code has been in evolution over generations. In actual fact it needs to have a whole raising-the-bar change to it, it needs to have people that will understand it going forward, and quite frankly, it needs to have some flexibility.

I'll give an example of the flexibility where I was able to do a regulation that actually affected something. We had one municipality in B.C. that decided overnight that vinyl siding and vinyl windows were no longer meeting the standards on rain screening in B.C. What they did was they told everybody they couldn't use those products any more.

We make vinyl siding and vinyl windows in British Columbia, and we were actually about to shut down the ability of our own product to be applied to our own

buildings. It was just a case of somebody at the local level deciding to do their own interpretation of something versus what the provincial interpretation of a particular product was. We had to change a regulation in order to fix that. Sometimes those regulations take a little bit longer than they can, and it could have an effect on people who are actually involved in building in B.C. today.

On the reverse side, if we had had some standards in place, we might have been able to deal with some of the issues around acrylic stucco in the old leaky-condo issue back then, if we had had the flexibility to identify a problem early and move quickly on it.

There will be some debate, I'm sure, about what level of ability there should be for the minister to make changes in the building code. I do know that in my experience I've found many times a national code that is applied provincially can oftentimes take the issues that actually bring us to failure.

The classic example is where the national code and some of the building code years ago didn't recognize that in some areas of B.C., like Revelstoke or Whistler — I'm not using those communities by name; it's just that I know they have heavy snow loads — couldn't actually build buildings with the structure to handle the snow load because it was against the building code. There needed to be amendments and changes done in order to adapt to that.

It is a very complex issue. This is the first piece of a very long, extensive process with regards to building code and raising the bar and the professionalism of building in B.C. Ironically, I think that in many cases we're actually a lot greener than most areas in the country as to how we build buildings. It's just that we're going to try and improve on that.

We do a lot of 2-by-6 construction and high-energy furnaces, and some of our water management is not bad. It could get better with low-flush toilets and how we monitor and meter this stuff, but there are certainly ways to improve. We have to set the template and, basically, say that this is where we're going.

Industries are like anything else. They will change when they see change coming, but they won't change, necessarily, and will continue to do the same old thing over and over again because it's comfortable.

This is basically the beginning of the green building code and its initiatives, and I look forward to the committee stage debate.

Hon. R. Coleman: I move that the bill be placed on orders of the day for the next sitting of the House after today.

Mr. Speaker: Minister of Forests, the motion should have been "referred to a Committee of the Whole House at the next sitting after today."

Bill 10, Housing Statutes Amendment Act, 2008, read a second time and referred to a Committee of the Whole House for consideration at the next sitting of the House after today.

Hon. C. Richmond: I call committee stage of Bill 8, intituled Forests and Range Statutes Amendment Act, 2008, in the hands of the hon. Minister of Forests and Range.

The House in Committee of the Whole (Section B) on Bill 8; S. Hammell in the chair.

Hon. R. Coleman: This morning I received an e-mail from a gentleman by the name of Bill Bond. Bill happens to be the spouse of the Deputy Premier of British Columbia and the Minister of Education. Today, because she loves this House so much and we don't give her leave, she is sitting in this House celebrating her 29th wedding anniversary, while Bill is stuck in Prince George.

I'd ask the House to please pass on their congratulations to the Minister of Education and her husband Bill on their 29th wedding anniversary.

B. Simpson: I did have my coffee this morning, so I got up in time for this.

My understanding of the section 48 amendments to the Forest Act are that the amendments, according to the press release, are intended to give first nations access to timber for domestic use. Again, according to the minister's own words and the press release for this bill, it "updates the Forest Act provisions for free use permits to assist first nations in assessing timber for domestic purposes, a right that was established under the Supreme Court of Canada."

I am referring to the actual act itself. I'm trying to understand. It says that section 3, the two amendments that it's making, in part (b) in subsection (2), by adding "with an applicant described in subsection (1) (a) to (f)…." It looks to me like section 48(1)(g) is the piece that actually describes the use of Crown timber and is not selling timber to others. Yet I don't see anything in this section that actually gives first nations any rights additional to what they already have. Under this, they already have, in 48(1)(g), a designated right to use, through a free use permit, Crown timber for traditional cultural activity.

I wonder if the minister can explain to me where this additional right is supposedly given to first nations in this act.

Hon. R. Coleman: I won't mention to Bill, who's probably watching right now, what's going on in the House, although he did ask me to e-mail if the minister blushed when the announcement was made.

Before I start, on my left is Diane Goode, who is the manager of litigation and policy analysis for the ministry. On my right is Richard Grieve, manager of policy development and legislation in the ministry.

Basically, the change here is that it removes the requirement for the first nation to exhaust its personal supply before it asks for a free use permit. Then the next section, which has the rest of the changes, removes the volume, which used to be 50 to no more than 250 cubic metres. It now removes the 250-cubic-metre limit.

B. Simpson: I guess, not being a lawyer or a legislative lawyer, I'm trying to really find out the connection between the bill note, the press release and what is actually happening in this bill. The explanatory note says that this particular section "allows a free use permit to be entered into with a person who requires Crown timber for a traditional or cultural activity and who is not selling the timber." But that's already in the note.

I'm looking at the Forest Act, current as of February 27, 2008. Section 48(1)(g) already has a person having access to Crown timber for traditional and cultural activity not selling it to others. Again, all (a) does is change subsection (1) from an agreement "in the form of a free use permit" by getting rid of some verbiage and putting in "a free use permit." Then (b), in subsection (ii), is the section that says it cannot be entered into, by putting in 1(a) to (f), so that it's not, I guess, excluding (g). But it's not giving rights, as far as I understand, to first nations.

Again I ask the minister: where is it that this gives incremental rights to first nations?

Hon. R. Coleman: I'm going to basically try and do this. Section 48(2) presently prohibits entering into a free use permit with an applicant who has sufficient access to timber on land owned or occupied by the applicant. We're taking this away.

This section amends it to enable the first nation to hold a free use permit and access timber on Crown land for a traditional or cultural activity, including timber to build a residential dwelling in situations where the first nation may have sufficient access to timber and land owned or occupied by that first nation.

The amendment to section 48(2) is necessary to address the Sappier and Gray Supreme Court of Canada decision and to prevent a possible unjustifiable infringement on aboriginal right for timber for domestic purposes.

In December 2006 the Supreme Court of Canada found there was an aboriginal right to harvest timber for domestic purposes, including the construction of residential buildings. In the situations where a first nation holds such an aboriginal right, this right may be practised on Crown land and in an area traditionally used by the first nation.

So these provisions are changing to accomplish that, to take care of that aboriginal right. The provisions will also allow us to amend the regulations to include the residential building to be included in what the first nations can use the timber for.

B. Simpson: We will move on to section 4, which raises this point that we're talking about — treaty first nations. If I understand the minister correctly, what we're adding in section 2 is a clarifier clause, (1)(a) to (f). So it excludes (g), which is the clause in part 1 that speaks to traditional cultural activity. We're saying that now gets removed.

As a consequence, section 2 does not apply to those who are using the land for traditional or cultural activity. That's effectively what we're doing.

What I need to understand is…. Section 2 talks about land that the applicant owns or occupies. As we know, first nations do not own the land that they're on. At least that has not been determined in many cases, other than where we have a treaty that exists and that actually transfers rights of ownership to the first nations.

Again, I'm trying to understand the disclaimer. If first nations are actually on land, that is sufficient for them occupying that land. So if they go in and they want a free use permit, whether it's to build a home or firewood or whatever the case may be, the regional or district manager, by right of their occupation on that land…. Whether it's their traditional territory or whatever the case may be, they automatically get a free use permit and cannot be excluded under 48(2). Am I understanding correctly that that's what's happening?

Hon. R. Coleman: I'll try this. Basically, this section allows an applicant who may have reserve lands or treaty lands that they already have…. It allows them to have a free use permit on other Crown lands that might be within a traditional territory. They're not restricted to the reserve or Crown lands, and they're not restricted by their access to that to be only allowed to have a free use permit, because of the Sappier and Gray decision.

B. Simpson: I just want to be clear about that last point, that this goes beyond reserve lands, then. There are the treaty lands. I guess in the treaty lands, it depends on where Crown and treaty lands intersect — whether or not the first nations under treaty would actually need a free use permit, because they should have sufficient owned fibre supply for their own needs in traditional cultural uses.

The reality is that non-treaty first nations that had access under this…. All it's saying is that we can't restrict that access because they've got some in their existing agreement, whether it's a forest and range agreement or some other forest licence or whatever the case may be.

But I want to be clear. The minister said that it's not just the reserve land. For Nazko, for example…. They live on reserve lands, but they have a huge territory that they now have under discussions at the treaty table. Same with Nadleh, and same with most of the first nations in the interior.

So they can actually request the access under a free use permit for anywhere in their traditional territory. Is that what the minister is indicating?

Hon. R. Coleman: Yeah. The member is correct, with the exception that it depends on the treaty. Some treaties will allow for things outside the treaty lands, so that would be taken into account on the application for the free use permit.

Basically, this is to allow first nations who don't have access to particular properties and lands to be able to go and get land to build a home or a building, or whatever the case, right off Crown lands with a free use permit. Then, of course, the descriptions in (a) to (f) basically cover off what that may be, and then forward from there.

Section 4 changes section 48(2) of the Forest Act by adding "and (h)" after the previous amendment of adding "subsection 1(a) to (f)." Where would I find the (h) that it's referring to?

Hon. R. Coleman: The Maa-nulth Final Agreement Act won't come into place for about a year, and in the treaty there is a section that has basically become section (h), which was passed by the Legislature but won't be brought into force until the agreement is actually in place.

I'll read the section which would be (h): "a treaty first nation that has entered into an agreement with British Columbia, in accordance with its final agreement, for the harvesting of types of timber specified in the final agreement."

That's in the agreement. We can't put it in the act today, because the Maa-nulth final agreement hasn't been passed. This enables us to add section (h) when that agreement is passed in order to basically accomplish, I guess, the legal responsibilities under the treaty.

B. Simpson: I find that curious, because what we're being asked to do is to approve "and (h)" with (h) not described. I don't understand why you wouldn't take that out and add the "and (h)" when you're describing what (h) is. Effectively, if we add "and (h)" here, we're agreeing to whatever (h) is in the act. We're agreeing to it sight unseen.

I don't understand why you would even put it in at this point. It's asking for us to give you leave to do something later on, and we don't know what that something is.

Again, this section, in the explanatory notes, says, "…adds a treaty first nation that has entered into an agreement with British Columbia to the list of persons," but it actually doesn't do that at all. It just adds the little phrase "and (h)" to it. There's a disconnect between the explanatory note, which is saying that we're making room for a treaty first nation to be added. The explanatory note, if anybody reads this bill, is false advertising as to what's going on. I think we have an obligation to the public to be crystal-clear about what it is we're doing and not doing when we make changes to legislation.

For what it's worth, my recommendation to the minister would be that this gets excluded at this juncture and that the explanatory note be changed in accordance with that. I would put that to the minister. Can we at this juncture just simply have an amendment put forward and have this section removed from the act?

Hon. R. Coleman: I'm going to try and do this one, and I don't know if I can satisfy the member's concern or not. Under the previous discussion, sections (a) to (f), we added (g) to allow for basically global access for Sappier and Gray. That is to meet the Supreme Court of Canada decision with regards to that.

In the Maa-nulth First Nations Final Agreement Act there's actually a statement that says you'll add section (h) to this act with regards to them. The Maa-nulth final agreement has a situation where they have agreed to exhaust any timber supply in their own area before they would actually ask for a free use permit under Sappier and Gray. That needs to be added at the same time as the Maa-nulth final agreement comes into force.

The actual language that I read out is in the Maa-nulth final agreement, so it is basically meeting the legal requirement under the treaty and having section (h) put in at the time that the agreement comes into place. This enables us to do that.

I will read the section again for the member, who, as I understand it, according to my staff, could go to the Maa-nulth final agreement and find this wording. It's section (h), which is: "a treaty first nation that has

entered into an agreement with British Columbia, in accordance with its final agreement, for the harvesting of types of timber specified in the final agreement." That needs to be added at the same time as the Maa-nulth comes into force. This allows us to do that.

The agreement itself, of course, as the member knows, will probably go through a period of time with the federal government, etc., and the approvals that are necessary to get the treaty finally done. Then this can come in, in order to make sure this does not contravene Sappier and Gray and contravene the Maa-nulth agreement, at the same time.

B. Simpson: I appreciate that clarification. However, I guess what I'm getting at is that we will have to have a piece of legislation introduced, once the Maa-nulth is actually enacted, that adds (h) to this. Right now there is no (h). We will have to have legislation come forward that adds (h) for clarity of purpose and to stop having explanatory notes that do not coincide with what actually is happening in the act.

If we take that explanatory note out and we take section 4 out and add the phrase "and (h)" when (h) is actually described, I think that's a better legislative process, more clear to the people of British Columbia. Why is it necessary, then, to put the phrase "and (h)" in at this juncture? Why not put this amendment in when the Maa-nulth comes in and (h) is actually described in the act as well?

Hon. R. Coleman: We've already passed this in the Legislature — passed this language, passed this agreement, passed this treaty. It has to go through the federal. All this does is allow us to bring the section of the treaty into force under this act when the act actually becomes the final act, I would say, from the federal government — right? That's what it is, so that's why it's in there this way. My understanding is that it's about the only way we can do it and be able to have the two blend at the appropriate time, at the same time, so that there's no confusion on the legislation.

B. Simpson: But there is confusion in the legislation when this goes in, because (h) isn't described.

Let me ask it a different way. Will we actually get a Forest Act amendment adding (h) from the Maa-nulth treaty into the Forest Act? Will that be an explicit amendment to the Forest Act brought into this Legislature at some point in the near future, once Maa-nulth has gone through its approval process?

Hon. R. Coleman: We've already passed this. This is basically allowing us to bring it into force as a consequential amendment so when the Maa-nulth agreement comes in as final legislation, this automatically will go into this section.

B. Simpson: Sorry. I do want to be clear on that point, because that's the point that I'm not clear on. So there will be nothing introduced in this House. When the Maa-nulth is finally approved, it automatically slides into the act. Is that correct?

B. Simpson: So what we've done at this juncture is excluded first nations who are non-treaty — other than Maa-nulth — to, within their traditional territory, get access to timber. We are not excluding them if there's other access available.

Now what we do under 3 is explicitly for the (1)(g), those first nations we've been describing to this point. We remove the "not exceeding 250 m³" — is that correct? So we removed the ceiling on the size of these free use permits. Is that correct?

Hon. R. Coleman: Member, you're correct. The amendment removes the 250-metre volume limit on free use permits. This amendment actually addresses the Sappier and Gray Supreme Court of Canada decision by ensuring a first nation has the ability to access sufficient Crown timber. Removing the volume limit enables a first nation to access the necessary volume of Crown timber for cultural and traditional activities, including the aboriginal right to access timber for domestic purposes, which could include building a residential dwelling.

B. Simpson: By removing the cap on there, what are the upper limits? And how will the upper limits be defined for the designated decision-makers in those areas?

Hon. R. Coleman: The decision-maker will make a decision, basically, applying Sappier and Gray, based on the showing of intrinsic use applied to the culture of the first nation and that the volume that is applied for would be appropriate.

We're developing revised policy guidelines for our decision-makers with regards to this, but it's not a case of somebody coming in and saying: "I want 100,000 cubic metres, because I want it for cultural purposes." It will be: "I want a free use permit, because I want to build a longhouse and three houses, etc., and this is what we think the amount of volume is." Then they apply. The decision-maker won't be able to apply the test with regards to that intrinsic cultural value and use with regards to Sappier and Gray.

B. Simpson: Just so I'm clear. Each designated decision-maker, whoever that may be, will have to then deal individually with each first nation and will have to use their own discretion in each first nations case as to how they apply this particular fact — that there is now no limitation on how much wood they give.

Hon. R. Coleman: Yeah, that's correct. Sappier and Gray basically felt that the limitation was unfair for some first nations who may actually have a larger use of more than 250 cubic metres and basically said it should be…. If I can put it in my understanding of the plain language, it would be: therefore, you can't have a limit, but you can identify what the use is and give the free use permit according to what the use is.

In some cases it may be a thousand cubic metres, because there are five houses and this and that and whatever. That's where that draws the line.

B. Simpson: Again, it's not in the legislation, but with respect to any kind of policy recommendations to designated decision-makers, how is the potential cumulative impact of this rolled up? Because you could have an entire…. Nazko could decide that they're going to rebuild all of their homes in Nazko. They're going to replace trailers and other homes that they've got there and build a big lodge. They're going to have nice fireplaces and all of that.

Again, you give each of the designated decision-makers that individual authority to work with the first nations. How much can a first nation actually come to, year over year, to get wood? And how does it work in with that area's annual allowable cut and other volume constraints, which some of the areas are now coming up against?

Hon. R. Coleman: There are two questions there. Obviously, if they could use this right to rebuild some of the what I would call substandard housing on first nations land, I think we should all applaud that opportunity. Quite frankly, there is some housing out there where I really think we've let first nations down, collectively, with regards to how they're built.

Just so we're clear here, though, the wood has to be used for the purpose. It can't be used for any commercial purpose. There's no commercial opportunity here. They can't go and barter the wood off for other services like electrical and plumbing, etc.

The wood has to go into the construction of the facilities it is identified for. So if they get a free use permit because they want to build five houses of wood, the wood has to go into those homes. It can't be sold. You can't enter into a commercial relationship. Sappier and Gray was very clear on the fact that this cannot be used for commercial purposes, and the wood is to go into the actual use.

Having said that, we don't think this has a large volume impact on any part of the annual allowable cut and wouldn't affect the management of the forest sector.

B. Simpson: I agree with the minister that giving first nations the access to do these kinds of things is important. I'm just trying to understand how it's going to work.

First nations have various complaints about relationships that they have with local decision-makers, depending on their own perspective. Giving the authority to local decision-makers to apply this particular part of the act within some policy framework may further exacerbate some of those situations if favourites are played or if the rules aren't clear.

My question to the minister is: if a first nation is not happy with the decisions that are being made by the designated decision-maker, what is the recourse for them, and will that be stipulated in the policy?

Hon. R. Coleman: We wouldn't put that in the legislation but certainly in the policy — where they would go if they were dissatisfied with a solution. I guess it could probably go up to the ADM or the deputy level.

You know, the frustration that even brought on Sappier and Gray was actually the ability to get the wood to begin with, because of the free use permit process tied to the tune of 250 cubic metres and the restrictions on it. That's why we've made these changes to meet the Supreme Court decision.

I know that licensees, as well, sometimes get frustrated with statutory decision-makers who make their decisions based on the law or policy. They will come to various levels to have their situation heard if it has to. Of course, this is a decision-maker. It wouldn't necessarily have to be a statutory decision, so it could probably be discussed up the line.

I think the First Nations Forestry Council, if there were a lot of problems with these, would bring it to the minister, quite frankly, and to the deputy minister. I get the member's comment about some of my decision-makers and policy-makers out in the field not getting along with first nations. I don't actually get that from the first nations when I meet with them.

There are some, I guess, that would have to be based on their merit. There may be an application that somebody doesn't like the decision on because they're actually asking for more than what they're entitled to. Sometimes our guys have to make those tough decisions and allow for some discussion to find a place that's middle ground or where we can find solutions.

I think they do a pretty good job out there on these things. I will certainly bring it to the deputy's attention to have something in the policy that says if there's dissatisfaction with the application… But I believe that would probably be built into our process anyway.

B. Simpson: Just to be clear, I didn't suggest that it should be in the legislation. I was asking if it would be in the policy.

With respect to the minister's comments about what's happening out in the field, I guess we talked to different organizations. Because of our different roles, we get different impressions of what's going on out there, and we've canvassed that a number of times here.

If you take a look at FRAs and FROs, for example, that was a formula-based process that caused disputes out in the field as to who got what volume and

whether or not that volume was viable. It has been circling around for quite some time without resolution, and I know this has been punted to the leadership council and the First Nations Forestry Council to try and get them to resolve it.

That's why my question is: in the policy for this, will there be an explicit statement of how to resolve conflicts or complaints about unfairness across jurisdictions, between designated decision-makers or by the same designated decision-maker? Will it be an explicit statement, or will it be, as the minister seems to have described it again, an ad hoc — "let's see what floats up and deal with it when it floats up"?

Hon. R. Coleman: We haven't written the policy yet. The legislation isn't passed, and the regulations aren't in place. As I said to the member, I will bring it to the attention of the deputy subsequent to these debates.

B. Simpson: Here we get into the timber marking. We canvassed this a bit yesterday in our debate where, according to the press release and the minister's comments yesterday, this is the enabling legislation for the so-called forest recovery strategy and the coastal forest action plan. It's to streamline requirements for the marking of timber transported by water. What in fact it does….

Under sections 84(1) and (3), and under 86(1) and (2), we're striking out the word "conspicuously." My understanding is that striking out that word applies to both water and land. I wonder if the minister can clarify that for me.

Again, the news release and the minister's comments are that this is going to streamline requirements for the marking of timber transported by water, but the actual amendment doesn't differentiate between water and land. It removes the word "conspicuously" from timber marking for both land- and water-based transport.

Hon. R. Coleman: I've had two other staff join me: Sabina Ghazarian, who's with the timber pricing forestry revenue branch, Ministry of Forests — I'm sure Sabina will tell me if I got that wrong — and Graham Archdekin, who is the manager of tenure opportunities for the Ministry of Forests and Range, B.C. Timber Sales.

This is really geared to floating timber, because the biggest challenge we have in transporting timber is that that's in the water. As you can imagine, when they drop them into the boom, they're this way and that way and every other way, so they don't actually meet the test of conspicuously….

So rather than write the entire section — because we do have the timber marking and transport regulations, which are pretty clear — by removing "conspicuously," it affects mainly floating timber.

That's why in the release it talked about how it would help the transport of timber by water. The wood has to be marked in the prescribed manner with a timber mark that pertains to the land under the section, and that is covered by the timber marking and transport regulations.

The challenge we had under the regulations, though, was that when we dealt with timber being transported by water, getting to "conspicuously" was virtually impossible. In order to reduce some of the things that need to be done on the water, and in order to have people taking less risk on the water, for their own safety, we had to remove the word "conspicuously," which we think accomplishes a combination…. It accomplishes what we want to do by removing it and then having the regulations in place that basically exist today with a prescribed manner for timber marking.

B. Simpson: If I understand the minister correctly, he's indicating that all we're trying to do is give more scope for the water-based marking, whereas the minister indicates it's difficult sometimes to make it conspicuous because of how the logs float and how they're boomed and bundled. But in order to achieve that, "conspicuously" has to be removed not only from land transportation but from…. This covers both private and public logs. So I want to be clear about that — that logs from private lands are covered by this removal of "conspicuously" as well as logs from public lands.

Hon. R. Coleman: How the mark is applied is prescribed in regulation. This is only about the transport of the timber. So "conspicuously" means you can't necessarily see it in the boom as it's being transported, because you know the difficulty around that, or how there are other ways to transport it.

However, it still has to be marked — right? — and for the purpose of an inspection, it has to be legible and conspicuously applied to the timber. All we are doing is getting the transport here. It doesn't mean that they don't mark the timber anymore. They still have to mark the timber.

When you take it out of the water, you put it on a truck. When we come and check it when it comes out of the water and onto the log sort, there still has to be a timber mark that is legibly and conspicuously applied under a separate section of the act with regards to the timber markings.

This is about the "conspicuously" thing coming out of the way they transport it in such a way that allows us to allow them not to have to do some of the work that we may have to do today. But it still has to be marked. It's not a case of removing the mark.

B. Simpson: I just want to clarify the point the minister made a number of times about transportation, because 84(3) actually covers storing unscaled timber as well, and the conspicuous is relative to storing unscaled timber, not just the transportation of timber.

So I want to make that clear — that it's not just transportation; it's if I've got unscaled timber that I'm

storing. Whether I'm storing it on land or in water, it's in that storage area. I'm removing the word "conspicuous" from that just as much as I'm removing the word "conspicuous" from transporting timber that's not scaled yet.

Hon. R. Coleman: I'll try and work this one through. A person cannot store unscaled timber in decks or piles on Crown land unless they have marked it in a prescribed manner under the regulation. So you can't just leave it there and store it. It has to be prescribed.

They can't remove or transport unscaled timber from Crown land or private land unless the timber has been marked in a prescribed manner with a timber mark that pertains to the land. That's how the section would read versus "has been conspicuously marked in a prescribed manner."

They still have to mark it. The "conspicuously" comes out, basically, that it be marked in a prescribed manner, and the regulation is pretty straightforward on how it has to be marked. That hasn't changed. It's just that the transportation on the one piece is that it has to be marked.

Conspicuously marked means that in the case of water in particular, the logs could be transported in such a way that they're not all going to be seen easily. But the fact of the matter is that they all have to be marked in the applied manner according to the regulation, which is quite clear.

B. Simpson: My point was that the minister was saying this only applied to logs being transported. It doesn't; it applies to stored logs as well. That's the point I was making. I get that we're removing the word "conspicuously."

Maybe the minister could inform anybody who has no life and is watching this or reads the transcript afterwards: why it is so vital that these timber marks are conspicuous? Why is it so vital that these timber marks are there for everybody to see?

My understanding is that on the coast, in particular, we've had trouble over the last number of years with the loss of timber marks, the lack of conspicuous marking of timber. We've had more C and E — compliance and enforcement — infractions, and we have more tickets being written as a result of timber-marking problems. I'd ask the minister to speak to that issue.

My concern with taking the "conspicuously" out of here and applying it to the regulations, all under the guise of addressing the coast action plan and streamlining and so on, is….

Are we not at risk of exacerbating an already growing problem on the coast of private-public land logs being intermingled, of increasing infractions and increasing concern — partly because we don't have enough C and E officers out in the field — about us losing control of where logs came from, what value should be ascribed to those logs and what stumpage should be ascribed to those logs — all of the information that timber marks give us?

If anything, we should have more stringent regulations put in here, not be watering down the legislation. We should be making them more conspicuous, making it more stringent for people to make sure those timber marks are there.

So to summarize, my question to the minister is: do we have current problems just now on land base? Let's separate out the water stuff, because we're going to get to the safety piece. On land base, am I in fact correct? We are getting increased C and E and tickets and compliance issues around timber marking in general and in particular on the coast.

Hon. R. Coleman: This is to remove or transport unscaled timber from Crown land or private land unless the timber has been "marked in a prescribed manner with the timber mark that pertains to that land." It's removing one word — "conspicuously."

I don't have the staff here. You can ask me about the enforcement stuff when we get to estimates. We're talking about a section of a bill. I don't have the staff here to answer that question. The member can either ask me to get the information for him, or he can bring it up in estimates, and we'll get the information for him. This isn't the place to be able to specifically answer that question. The member also knows we've moved to more weigh scaling on the coast, because of the efficiencies of that and how that works.

This is really an amendment that removes the word "conspicuously" to prevent conflicts between the act and the regulations respecting the marking of timber. That allows for some flexibility. If the member doesn't like that, it's fine, I guess. But I'm not going to get into a debate on statistics and information that I don't have at my finger tips during a debate of the section of the act that deals with one word.

B. Simpson: I guess I will take it into estimates. But one would think that if the minister is going to streamline regulations, he would be examining whether or not the area in which we're going to do further streamlining is already having difficulties with applying the existing regulations in a stringent fashion — that we are not having infractions, that we are not having compliance problems — and therefore make sure that's covered off before you then water down the regulations, or the legislation that's governing those regulations, even further.

Another question on here that one would think the minister has done is: what cost savings will there be to the industry as a result of this streamlining?

Hon. R. Coleman: The member likes to find ghosts behind trees or whatever. We're not having the problem you're describing. In actual fact, we have very stringent regulations with regards to timber marking and transport, and they're working.

This is just a case of one word that probably allows for some interpretation to be better on the enforcement side versus not. The member may disagree and not like

it. The fact of the matter is that this is about a problem we've identified with industry with regards to the transport of timber. It doesn't water down the regulations on timber marking. It doesn't change the rules in and around that. It's not changing the regulation.

It's removing a word that says "conspicuously," but it still has to be marked in the prescribed manner under the regulation. That covers off any other eventualities the member is bringing up.

B. Simpson: It must change something; otherwise we wouldn't be removing the word. We wouldn't be making the amendment. If something wasn't changing, we wouldn't be doing this. So I contest the minister's contention that it's not changing anything. Otherwise, this whole discussion is moot.

But the minister didn't answer my question. This is supposedly a derivative of the coastal forest action plan's objective to streamline requirements for marking of timber. That's what it's supposed to do.

So what is the net cost saving to the industry, or what is the net benefit to the industry, financially, for taking this action and streamlining these regulations? And I'm not coming up with the word "streamlining." It's the minister's own documentation that's saying we're streamlined. What is the net financial benefit to the industries of putting this in place?

B. Simpson: Since time is money, and money is usually associated with bodies, how many people are going to lose their jobs as a result of this legislation?

B. Simpson: So, really, the company is going to save a little bit of time, but the reality is that what this is going to do is remove some obligations for — I mean, it's doing it for private lands and public lands, but according to the minister's own documentation — water transportation of logs so that somebody doesn't have to be there to make sure that the timber marks are conspicuous.

That's a body that has to make sure those timber marks are conspicuous right now. That's somebody that's out working the log booms to make sure they can be seen. That's a body. That's where the time comes from. That's where the money savings come from.

A big chunk of what the industry is looking for is cost savings. I just want to clarify that the minister is saying categorically that not one job will be lost and that all we're saving is time on this. There will be no money savings to the company from this.

Hon. R. Coleman: I get that the member is trying to find some conspiracy here and wants to not care about the safety of workers on the coast of British Columbia, I guess, either. The last comment was just bizarre — that you would think anybody is out there turning every single log.

The reality is that this just removes this out of legislation and leaves all the regulations in place which actually talk about "conspicuously marked" in the regulation. The member may not like that, and that's fine, I guess. But these amendments remove the word "conspicuously" to prevent conflicts between the act and regulations respecting the marking of timber. By doing that, the best effect it has is for the people who have to deal with logs that float in water. They still have to be marked.

You know, there are certain challenges that regulations and laws can sometimes put on, which put people at risk and actually create inefficiencies in the system. Given the state of the forest sector today, if you can find some efficiency and protect workers' safety by giving some flexibility to the regulation, that's something that makes sense to me.

To the member opposite: there is nothing more than that to it. The regulations don't change. The rules on timber marking don't change. They're in the regulation. They're strong.

This is basically removing it from the legislation so the flexibility exists there for both the policy and the enforcement side but also, quite frankly, to allow a boom of logs to be moved from one place to the other. It will still get scaled. They're still going to get marked. They're still marked; they're still scaled. They can't move them into the water without marking them in the first place. That's the law. Those regulations will still apply.

B. Simpson: Section 84(2) goes to the minister's comments that I'm being silly by saying that people are turning the logs and so on.

The minister has said that this is related to safety. So somebody is actually doing something that's regarded as an unsafe behaviour because they're trying to keep the timber marks in view. So there is a person involved with this who is trying to make sure that the logs have discernible timber marks that are conspicuously discernible. Hence, that's why there's a safety consideration. If there wasn't a person involved with it, there would be no safety consideration.

Secondly, the minister talks about efficiencies. I always find it very interesting, as someone who's spent a lot of time in the industry finding efficiencies…. Efficiencies mean cost reductions. It means getting regulations out so you have more freedom to act. It means reducing the number of people that you have doing a job by either replacing them with capital or replacing the need for them to be there.

In this case, what we're doing is changing the regulation so that we replace the need for somebody to be

there to make sure the timber marks are conspicuous. That's what this clause actually does. We're repealing a clause that stipulates that the person placing the timber in the water or putting it into rafts must ensure that the timber mark is readily discernible when the timber is in the water. That takes bodies. It takes people to do that.

Again, as we repeal this and we're not replacing it with anything, how is this replaced in the regulation? Will there be regulatory changes with respect to this? Or when we go and look at timber that's floated in water, do we just take it for granted that we may not be able to see the timber marks?

Hon. R. Coleman: For the member's information, we've already amended the regulation for greater transport of timber by water. This brings it in line with what we've already done in regulation. But just for the member's information, those regulation changes allowed for larger amounts of bundled timber to be transported within booms.

For instance, they can be bundled into a bundle. Some will be under the water; some will be above the water. They have to be identified with a bundle tag as well as the timber mark. Those bundles are then transported so that we can track the bundles. We already have an agreement within regulation with industry that accounts for any sunk timber so that we can estimate anything that sinks. Therefore, we can still get our stumpage for that by the way we calculate the information.

Amending this basically reacts to the business practices that are out there — but at the same time, the regulation. Basically, what we're doing here is repealing that section to specify the requirements respecting conspicuous timber marks. These changes will ensure that there's no conflict between the act and regulation respecting the marking of timber, such as will ensure unambiguous directions providing for timber marking or timber transporters or on the enforcement side.

The industry has always said that it would be more efficient to be able to bundle a number of logs within a boom and move a larger volume within a boom efficiently, but you can't have a conspicuous mark if half the boom is under the water. The reality is that by removing "conspicuously" and still applying the regulations on the timber-marking side that require all the marking, etc., we accomplish the goal.

B. Simpson: I just want to be clear, again, for the public record and for anybody paying attention to this. The reason we have all these timber marks on the unscaled timber is that we haven't valued them yet, and we haven't derived a value to the Crown yet. We need to know where the logs came from, because whatever the agreement under the forest licence is, we'll ascribe a value to the Crown. This is how we get the revenue to the B.C. taxpayers from these logs that's appropriate to both the kind of harvesting that we do and to the considerations and constraints in harvesting that timber in the first place.

If timber marks get shifted around, you can actually ascribe a lesser value to timber than what it should have, and the Crown therefore loses revenue as a result. That's why it is so important that we understand what is exactly going on here and that, as we streamline this, we don't streamline it to the detriment of the B.C. taxpayer.

Given that we're going to do the bundling and given that we'll have the ability to move water out of the line of sight of individuals who may be scanning booms or scanning the logs that are being transported, are we going to increase compliance and enforcement at the log yards and log dumps and areas where that will be put back onto land or where it will be made available for processing so that we actually make sure that, as we move through this transition to do the streamlining, this system is not abused?

Effectively, what you're doing is taking public logs — and the private logs, which are another thing — and, as you transport them in water, putting them out of sight so you don't know if they're properly timber-marked or not. Then, when they're landed or before they go into a mill, we have to make sure that they actually get scaled appropriately, according to the timber mark.

Will we be increasing compliance and enforcement officers out there in this transition phase to make sure that this new system is not abused?

Hon. R. Coleman: This change was developed in collaboration with our compliance and enforcement people and our people that do scaling. One of the challenges over the years has been how many times you touch the wood, how many times you scale it and how many times you check it. Every time you do that you add cost to somebody, and that cost is usually effective in affecting the efficiency of the movement of the product.

Could there be challenges with this system? Possibly, like there have been, if the member is familiar, with every system we've ever had with regards to how we collect stumpage and scale. We think this is more efficient. We think the scaling will probably be manageable. Our compliance and enforcement people are comfortable with it.

I think that the day will probably come when technologies that are used elsewhere in the world…. The log is marked with something along the lines of a boom with GPS or whatever the case may be, in volume, and then it arrives at a mill and actually get scaled going into the mill. With computer data it is probably the ultimate, but we're not there yet. There was one company thinking about introducing that technology. They haven't done that yet.

The reality is that we're always looking for ways to improve how we manage the resource, and the bottom line is that it still can't be moved without a timber mark. It can't be taken from the forest floor without a timber mark on it, no matter if it's going in the water, on a truck or rail or whatever the case may be. They can't move it without the timber mark, and that allows our guys to identify where the wood comes from.

Then the booms can be moved in the water. Because of the nature of the movement, it's pretty tough to meet the conspicuous side of this thing from the previous section. Basically, this is to ensure that there are no conflicts between the act and regulations. We already moved on the regulations as we promised we would with regards to how we would allow the movement of wood in water, and they still have to meet the same regulations with regards to timber marking prior to transport, etc.

B. Simpson: Before I move on, I just want to clarify something here. The minister said that we can't move without a timber mark. You actually can move without a timber mark; it's just illegal. Before it's discovered to be illegal, you have to get caught. In order to get caught you have to have compliance and enforcement officers out there in sufficient numbers doing sufficient checks to make sure that people do get caught. Timber does move around this province without timber marks, and we do catch people doing that.

The other issue that we've got, on the coast in particular, is the overlap between public and private lands. When you have owners that own both public and private lands and the movement of logs, assigning timber marks to your higher-grade products that are your private land timber marks as opposed to public land timber marks is a problem.

Again, we will canvass this in estimates debate, about whether or not we have enough compliance enforcement officers out there to do that. I take the minister's point that this has already been changed in regulation, and we will canvass the other aspects of this with respect to compliance and enforcement, written orders, etc., in estimates debate.

Hon. R. Coleman: The reality is that forestry is no different than any other commodity or any other aspect of the law. I mean, you're right. It's not supposed to be moved without a timber mark. Illegal activity takes place in all kinds of commodities, and quite frankly, our compliance and enforcement officers aren't the only people watching for this. We do have a complaint-driven process. The RCMP have conducted a number of investigations in cooperation with our people where we've had report of fraud or thought that the timber was moving.

We want to be vigilant on that. Quite frankly, we recognize that whenever there's value, somebody wants to steal it, whether it be the theft of a car in my community or whether it be a theft of a log from the forest. Our rules say that you can't move it without a timber mark. That was the context of the comment. If somebody's doing it without a timber mark, well, we want to catch them, and that's why we have compliance and enforcement.

I actually think you'll find that a lot of people in the industry will be the first ones to report somebody that wants to move illegal timber, because it affects their competitive ability on the land base. We have a fairly good system, and I'll be happy to canvass that stuff in estimates.

B. Simpson: I wonder if I could just ask the minister to clarify this section for me. According to his briefing, I understand that what we're doing is putting a constraint on the ability for an order-in-council to lower stumpage rates so that it doesn't go below the minimum. Under what circumstances is this particular part of the act used? I wonder if the minister can give me an example of that.

Have we in the past actually lowered stumpage below the minimum, which in some areas is 25 cents? I'm not sure how you can get it below the minimum without giving it away. I would like a clarification and then an example of where this particular part of the act is applied.

Hon. R. Coleman: I'm told that it's never happened. This amendment is basically your housekeeping changes that recognize that subsection (7) does not deal with regulations but instead with orders of the Lieutenant-Governor.

The amendment will clarify that cabinet cannot lower stumpage rates below the prescribed minimum rate. There's some interpretation which says, if you read it a certain way, that they could. This basically clarifies that. Currently it could probably be argued that in lowering the stumpage rate…. Under subsection (7) cabinet must lower stumpage rates below the determined rate and the minimum stumpage rate because of the way you could argue the section. This is cleaning up the language.

B. Simpson: I want to be clear that the minister has indicated…. It does that. It clarifies that you can't lower it below the lowest stumpage rate. Then it also adds below it — (8) there — that whatever the conditions are that are required, you have to continue to meet those conditions, or your stumpage will be redetermined.

I just want to clarify that the minister says that this has never been used. What's the purpose of having it in the act? What is the foreseeable use of this section of the act? When would we use it?

Hon. R. Coleman: It's never been used to go below the minimum. This is to make sure that nobody can interpret that they can go below the minimum. This is to make sure it's clear. It's just clarifying that cabinet cannot prescribe a stumpage lower and below the prescribed minimum rate.

B. Simpson: That's an important clarification, that it has in fact been used to lower stumpage rates, though. Is that what the minister is saying — that this has been used to lower stumpage rates, just not below the minimum?

Again, if that's the case, can the minister give me an example of when an order-in-council was used or cabinet decided that they were going to lower stumpage rates? If there's one that's recent, that would be helpful.

Hon. R. Coleman: I don't have a specific situation here, but I will get one for the member this afternoon or tomorrow, whatever the case may be.

B. Simpson: I appreciate that, and I would like to look at a specific situation.

How does having that ability to reduce stumpage impact the market pricing system where the price of timber and stumpage and so on is supposed to be done by the market and not by what could be regarded by the Americans as an administrative or, in this case, political adjustment to stumpage?

Hon. R. Coleman: I guess it could. I can't give the member an example, but for instance, under softwood there is a safe haven for first nations. The First Nations Forestry Council, if they have some recommendations that are brought to me that will go through our process with regards to how we price first nations timber…. That may require an OIC in the future to establish the rate, whether it's by tabular rate — similar to what we do to community forests — or however the case may be.

I think it would be better if I could just get a couple of examples and sit down with the member and explain them to him and walk him through them as much as anything. I think that's about the only….

The quick example that comes to mind at the moment would be with regards to that process that's ongoing that hasn't had any decisions made to it as yet. Any time we make a decision, we do extensive consultations with our very good law firm in Washington in regard to anything to do with softwood.

B. Simpson: I would appreciate a briefing from the minister's staff on how this has been applied so that I understand it. It would strike anyone looking at it as not just an administrative adjustment but a political adjustment of stumpage, because it comes to cabinet and is done through an order-in-council.

The minister's comment about the softwood lumber agreement having a safe haven for first nations, which I understand is a negotiable item…. I don't think it's as ironclad. It was part of what was put on the table for further elaboration and discussion.

As the minister is well aware, or should be aware, the Nadleh have asked for a specific intervention by the minister's office to have their stumpage reduced and, in fact, have argued that stumpage should be reduced across all forest range agreements to make those forest range agreements viable.

Does this give the minister, through an order-in-council and cabinet, the ability to address that specific request, as an example?

Hon. R. Coleman: No, this doesn't affect that. The ability already exists to be able to do that and bring in an order-in-council. This just clarifies that we can't go below minimum stumpage.

B. Simpson: I'll clarify my point. I get that this amendment is correcting that. I'm talking about the section in the Forest Act so that I understand the section correctly.

In the section in the Forest Act, does it give the minister the ability to sit down with a group like the Nadleh or to address the forest range agreements, forest range opportunities stumpage rates where they're actually asking for, as the minister already referenced, an adjustment like the community forests got? Would this then give the minister the ability to take that to cabinet and make that change as long as, as this amendment stipulates, it's not below the minimum stumpage rate?

It could be a downward adjustment of all forest range opportunities at the minister's request through an order-in-council. Does this section of the act allow that?

Hon. R. Coleman: It does that already, but it doesn't give the minister the power. What it does is allows…. If a particular group, like what you describe, came forward with a proposal, the minister could take a proposal forward, down at least two trains and maybe three.

There's a cabinet committee on aboriginal relations and reconciliation. It may have to go there to see whether this is a policy change in the earlier example that might be considered. Then it would have to be looked at from the financial aspects with regards to Treasury Board and their comments with regards to it.

Then there would probably be a legal review done with regards to whether it was possible and how it would fit in with any trade agreements we may have. Then all of that would be compiled and brought forward with recommendations to executive council for a decision, which they could or could not approve. That would probably be a process along the lines or similar to…. So the minister doesn't get to do this.

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

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

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

ESTIMATES: MINISTRY OF SMALL
BUSINESS AND REVENUE AND MINISTER
RESPONSIBLE FOR REGULATORY REFORM
(continued)

C. Wyse: Minister, I don't know whether you are aware, but I have just been notified that the B.C. Assessment office in Williams Lake, effective March 15, will have a removal of the farm portion of assessments. It will be relocated to the Kamloops office.

Since 2006 the staffing numbers in the Williams Lake office have gone from nine to five full-time-equivalents. My question to the minister is whether he's aware of this set of circumstances?

Hon. R. Thorpe: There are no staff reductions at the Williams Lake B.C. Assessment office.

C. Wyse: My question would then be: how many positions are filled in the Williams Lake office?

Hon. R. Thorpe: I'm advised that the staff from B.C. Assessment does not have that information here, but we'd be pleased to provide that to the member.

C. Wyse: If we can then assume that we will get that information…. The important part of the questioning that I'm dealing with is that this region is very large. It covers from about 70 Mile up to Hickson and out to Bella Coola, and it has 44,000 folios in it over a very large geographical area. To have that area being serviced out of Kamloops contradicts the availability of the local area having access to an office to have their questions pursued directly.

When we get into the other part, my question would be: is the farm category being transferred to the Kamloops office?

Hon. R. Thorpe: First of all, it's my understanding…. I've been advised that farm specialization has been handled out of Kamloops for some two years now. This is required to ensure that we have good retention of staff and that we have better training and consistency of the application of policy.

C. Wyse: My question would be: how would the minister bring together the aspect of the promotion of the hundred-mile diet when we have a whole category that has been moved literally tens to hundreds of miles away from where the actual agricultural business is taking place?

Hon. R. Thorpe: I did have some trouble understanding the member's question, so let me say that we believe that this does not affect property evaluation. It improves and assists the farming community.

I believe it might be appropriate for me to advise members who aren't aware that we are embarking upon a farm assessment review. A panel has been established. I do want to thank very much the member for Saanich South for his inputs, for his contributions, as we move forward. This has been necessitated by the fact that there have been some concerns in the agricultural farming community in areas of British Columbia.

I believe that this review panel, given its terms of reference, will be very good. It will be focused on…. As a matter of fact, I'll just read the overall objectives, if I could: "To review the farm classification process and regulations with a focus on simplifying and streamlining the regulations, while at the same time ensuring the property assessment system is fair, equitable, enhances competitiveness, and supports innovation and the British Columbia agricultural plan and a healthy future for British Columbia families and communities."

C. Wyse: The information I have is somewhat different. The information I have is that the farm category is eliminated March 15 in the Cariboo office. I just want to come back and have the minister respond to that particular date with regards to that category being relocated to Kamloops.

Hon. R. Thorpe: I have been advised by the chief executive officer of B.C. Assessment that there will continue to be a staff on the ground doing inspections of farm properties as required in the Williams Lake area. We have some two years ago centralized for policy reasons, for consistency reasons, specialization of farming in Kamloops for the area — over two years ago.

C. Wyse: I'm not quite certain whether I understood the answer to the question, whether that means in actual fact that officially on the 15th, it has become a fact.

But leaving that, again, my understanding is that when Nelson experienced the same type of situation a couple of years ago, when it was drawn to the minister's attention, the downsizing of the Nelson office was stopped by the minister so that the service remained locally.

Hon. R. Thorpe: Actually, that decision was made by the board of directors of B.C. Assessment. The board of directors had received a report that suggested significant changes in the way the organization was staffed. The board of directors of B.C. Assessment rejected that.

C. Wyse: Is the minister willing to review the situation in the Williams Lake office?

Hon. R. Thorpe: I would be pleased to receive the details from the member so that I have greater clarification of what his concern is. I have been advised by the chief executive officer of B.C. Assessment that there is no staff reduction in the Williams Lake office. If the member has other information on that, and if he would be pleased…. He hasn't provided that to me so far. If he provided that detail to me in writing, I'd be pleased to look into it on behalf of him and his constituents.

C. Wyse: I appreciate that commitment from the minister to do such. I will provide the information that I have been provided, and I will be seeking that clarification through the minister. Upon assuming confirmation of this information, I would be looking for the minister's support for the return, retention — whatever the correct word would be — for the Williams Lake office.

With that, I thank the minister for his attention. We will pursue the item later.

D. Cubberley: I appreciate having the opportunity to ask some questions of the minister around the farm status review panel.

I'd just like to begin by thanking the minister for both soliciting and receiving input from me around the panel and for acting on what I believe is a pressing problem for agriculture in British Columbia and for hopefully creating a mechanism that will allow the resolution of a number of issues that have come to light recently, not least of which has issues to do with the assignment of split farm classifications for farmers of small holdings in my own constituency of Saanich South and in other areas of the province.

So in that vein, I want to ask some questions, try and clarify some things, because I have a significant constituency of people who are tugging at my sleeve and wanting my attention on this issue. Therefore, I want to be able to provide the best information to them. It's in that vein that I'm going to ask questions.

The panel that was named on this is said to represent a "diverse cross-section of agricultural communities in British Columbia." One of the things that, in going over the people who are on the panel, all of whom have lots of bona fides…. There's no reason to object to any of them being members of the panel. But I guess the question is: why wasn't there some representative from the small organic-farming sector, from wherever that might be in British Columbia, given representation on the panel?

Hon. R. Thorpe: I believe that the small — if we will, to use the member's comments — organic farmers…. I understand he has quite a few in his constituency that he represents. I actually believe they are very well served on the panel. In fact, it should be noted that the co-chair of the panel is the mayor of Saanich. His views have been well known on this issue, as have the member for Saanich South's. I think that the entire farming community of Vancouver Island, the capital region and Saanich is very, very well served by the co-chair.

I might add that there is one other member of the panel from the Saanich area, and that is Sarah Pendray. I'm advised that the Pendray family are fourth generation farmers on the Island and have always had a philosophy of working cooperatively with the local community.

When we look at the makeup of the board, it would seem to me…. We'll see if other members from other parts of British Columbia are going to ask me: why does Saanich have two representatives on the panel and other communities not?

I think the most important thing as the review panel goes forward is that all sectors — small, medium, large — from all regions of the province of British Columbia are going to have the opportunity to provide their views, to provide their recommendations for consideration by the panel, whether they are going to appear in person before the panel as they have public hearings around the province of British Columbia or as they accept written inputs or e-mail inputs.

I believe there will be many, many venues for all types of farming communities of British Columbia to adequately express their views, to share their views and to have their views considered by this panel, which I believe represents all of the regions of the province of British Columbia.

D. Cubberley: I thank the minister for that response. Really, I wasn't concerned with the amount of representation from Saanich in particular. While I have every confidence that the mayor will be seized of the problem in particular of smallholdings in organic farms under the current regime from B.C. Assessment, the question is really about representation in the broader sense on the panel.

Sarah Pendray and the Pendray family are very longtime farmers, not in my constituency of Saanich South but in Central Saanich, so another member will be happy to see that his area is represented. I'm not bothered by that at all.

My questions are in this vein. The reaction that we have in Saanich did not come about because we were approached by dairy farmers, cattle ranchers, turkey farmers or people running agritourism operations who were concerned about B.C. Assessment practices. It came about because of the impact in particular on the smallholding sector, both within the ALR and, more particularly, outside the ALR — a particular class of farmers whose ox was, if you're looking at it from my perspective, being gored.

It's interesting, because the organic sector in British Columbia is probably the newest sector in farming. It's done on entirely different lines than classic industrial or traditional farming, and it's apparently the fastest-growing sector in the province.

Now, what's interesting, if we look at the representation on the panel, is that we've got two members who are connected to B.C. Assessment on the panel. We have two mayors and a regional district director. So we have three local government politicians on the panel.

We have a turkey farmer, a cattle rancher, and then we have two dairy farmers. Now, things seem to run in twos on this panel, if we are looking not geographically but sectorally.

The problem that we have in my constituency is really arising around the smallholdings. There is some concern that traditional agriculture does not value the emerging sector, and yet traditional agriculture is strongly represented on the panel, and the affected sector is not. B.C. Assessment is strongly represented on the panel, and the organic sector is not. Local government, which may have another perspective on this, is strongly represented on the panel, but organic agriculture and smallholdings are not.

So it's in that vein that I ask the question. If the minister wants to respond again, that's fine, but I'm more wanting to impress upon him the rationale for my comments than I am to try to get him to respond again.

Hon. R. Thorpe: I think it's important. I think it's really, really important. I mean, is it about having an apple grower? Is it about having a poultry producer? Is it about having a cherry grower? Or is it about having a cross-section that represents all regions?

I'm not sure if the member is aware of this, but I'll share it with him. The member from Princeton…. Now, I think it's pretty fair to say that very rarely do we have the opportunity, when we have provincial panels, to have someone serve from Princeton, British Columbia — very rare. Some people may not even know where Princeton is.

Hon. R. Thorpe: Okay, good. Princeton is part of the Similkameen. I'm sure that members on that side know that Keremeos is the organic capital of Canada. I feel very strongly that not only will the panel member from Princeton be adequately representing the views of Keremeos — I might just say, once again, the organic capital of Canada — but the mayor, Walter Despot, of Keremeos, will be making sure those views are heard. George Hanson, a farmer from that area, will be making sure that Mr. Willis knows those views. So I think there will be lots of opportunities.

There's one other thing that the member said. I don't believe that the member — I'm not even going to say that. With respect to…. There is a board member from B.C. Assessment on this panel, and he's from Prince George, British Columbia. We thought, as we had discussions, that it's very important that we have someone from the B.C. Assessment board involved to understand and hear firsthand what British Columbians are saying throughout the province. That's why Mr. McLaughlin was picked.

We also had the opportunity to pick a retired B.C. Assessment employee, a farm specialist as I understand, Mr. Keith Skidmore, I think with some 32 years of experience. I think it's always important that when we have former employees who have knowledge, who have expertise, that we should avail ourselves of that opportunity. So I think it's good to be able to capture the expertise of Mr. Skidmore.

I think also — and I'm sure the member will agree with this — it sends a very, very positive signal through to the employees who work at B.C. Assessment that their efforts, their knowledge and their inputs are valued in this process.

D. Cubberley: I do know where Princeton is and Keremeos and have had the opportunity to work in both — significantly around the Kettle Valley Railway, which as you know, representing the area that you do, played a vital role in the development of agriculture in the province and was a way for farm goods to make their way to major markets for so long.

I thank the minister for his comments. I agree with the perspective, especially about bringing somebody from previous times at B.C. Assessment Authority onto the panel. One of the things that's clear to people in the field who are attempting to farm is that B.C. Assessment radically changed its approach when it went through the review process in Saanich. That is part of the concern — that the approaches which had applied with the known assessment officers in the past were swept aside and a new regime was brought in.

It will be interesting, I think, for the panel to have that expertise inside and, hopefully, to draw on it so that they can come to understand that as well. It's not easy for people who are urban dwellers to understand farming because our assumptions about things are very different from those of people who are actually tilling the land.

I want to move to the terms of reference for the panel. One of the things that is said in here — I think it's really important — is that the review panel can bring forward interim recommendations. The question I want to ask the minister is whether he has conveyed to the co-chairs the importance of seeking a resolution to the current problems associated with split farm classification prior to the next round of assessments beginning.

I'm already being asked whether I will lobby the minister to place a moratorium on another round of assessments so that we can have the report out and come to the better day that we're all hopeful we're going to arrive at without going through the travail and disruption in farmers' lives another time.

My question would be: has he conveyed his interest in seeing that happen prior to the next round of assessments?

Hon. R. Thorpe: I think it's important for everyone here to actually know, and for those people who may at some point in time watch these estimates — also for those who choose to read Hansard on these estimates — to realize that the member for Saanich South and I have quite frankly…. I would never want to put words in a member from the opposition's mouth, but we've worked very, very closely on this file.

I think that's actually what the taxpayers, the citizens, of British Columbia want. They actually want not only different levels of government but parties that share different views on some matters to work for the common good.

I'm very, very pleased that when the member first came forward to me with his concerns…. I didn't keep a record of how many times we met or how many times we talked or how many times that he sent me some notes and we talked, but I can assure the member that his views, in the terms of reference…. I believe his concerns have been captured in the terms of reference. I can assure all of the members of this House that the co-chairs of the panel do understand, should they deem it appropriate to bring forward interim recommendations.

We've talked about the mayor of Saanich being one of the co-chairs of the panel. The other co-chair is the member for Peace River South — another large farming community, very important to the agriculture community of British Columbia. I believe that both of those co-chairs understand the urgency of the issue, and I would be surprised if they do not bring forward some interim recommendations.

I want to go to something which, in the mandate of the panel, was a little puzzling. I'm not an expert in the area and neither is the member for Nelson-Creston, and he had the same concern. It's really a question of clarification.

There are a couple of items that it said, explicitly, are not included in the mandate of this review and won't be examined, and that includes definitions of farm and the list of activities that constitute primary agricultural production for the purposes of meeting income threshold, and then exemptions applicable to properties classified as farm, which may or may not be in the agricultural land reserve.

The question, to try and boil it down rather than get into the internal mechanics, is: does this in any way, those things, impinge on the panel's ability to recommend that split farm — should they believe it should be — classifications on small parcels be done away with in favour of an income threshold or some other method, simply for establishing this status?

D. Cubberley: What I'm asking…. Do these two things that are excluded, whatever they mean, which…? Corky says: "Could you ask the minister to translate these into language that a farmer or an MLA could understand?" Do they in any way impinge on the panel's ability to make a determination and recommend that split farm classification on small parcels, in the ALR or not, be done away with?

D. Cubberley: I'm certain the member for Nelson-Creston will be asking you off-line what they mean.

One of the things that I notice is that nothing in the terms of reference explicitly characterizes the problem that's posed by split farm classification for small organic farmers. For example, the potential of split farm classification to remove lands being made available to the sector by people who are obtaining farm status on lands by allowing a leaseholder to farm on those lands. So someone else owns and occupies the lands, but they're actually leasing parcels.

What I want to ask about is: how is the panel going to receive an understanding of the implications of split farm classification and the impact that it has on the availability of lands, ALR or non-ALR, for smallholdings? The sector thrives on smallholdings and access to smallholdings, and as the minister will be aware, it's not easy in a context of suburban development to sustain access to agricultural parcels. One of the biggest problems for new farmers is trying to find access to land.

Hon. R. Thorpe: First of all, I think that particular issue that the member raises…. That's why I was very, very pleased when I sat in my office and contemplated who could be the chair or the co-chair of this. My dream list was actually to have the mayor of Saanich serve as the chair or co-chair, and we were able to achieve that. I think it's very fair to say that the mayor of Saanich understands this issue very, very well.

I think it's also important to know that in the overall review we make comment that it links back to the British Columbia's agricultural plan, so we know that small farms are important to communities. In the context, we do talk about climate action, green communities and the hundred-mile diet concept. Through the member, we did receive some input, letters from restaurateurs. I actually know that from my own community — the importance of those smallholdings.

I think I do understand the concerns that some will have. There are always concerns when you are taking the first step, because often, from time to time, people think that's the last step. In fact, this is the first step. People are going to actually have the opportunity to present in person at consultations, to e-mail and to write in. So I believe that British Columbians will have unbelievable opportunities not only to share their views but to explain their views in detail on why they reach certain conclusions that they do in bringing forward.

I would hope that as we have done in the past, the member for Saanich South and I will work together to make sure his constituents, my constituents and the farming constituents of British Columbia make sure that this panel is receiving as many submissions, as much input as possible in reaching a new approach that will review thoroughly regulation 411/95, which

has not been done for some time. I'm very confident that when we all work together, we will find the solutions that are applicable for today and, more importantly, as we move forward.

D. Cubberley: I thank the minister for that, and I have every intention of continuing to work cooperatively towards these outcomes. I will attempt to be a veritable conduit for information to go to the Farm Status Review Panel.

One of the things that I will certainly want to talk to them about — and I think others will as well, because one of the biggest challenges that we face in all of this is for the Assessment Authority to somehow come to a firmer understanding of British Columbia's commitment generally, and the commitment of individual communities like my own in particular, to practise growth management policies, to establish urban containment boundaries and to maintain rural areas as rural areas, using a variety of policy tools to achieve that objective.

Obviously, the most highly valued use of rural lands is farming, in all probability. As we know from the history of the agricultural land reserve and the pressures on farming today, it takes a great deal of art to maintain any farmlands outside of development because of the pressure of lands to move towards highest and best use, as they say inside the development industry.

I think that in attempting to create a balance in which the imperative to stop sprawl and to protect rural lands from development — to define an edge to the city, if you will — we need to find a balance so that the assessment practices in the province aren't driving rural lands towards development and increasing the pressure on municipalities to allow development on rural lands.

I think that's probably an objective that we can agree to if we're having a discussion amongst ourselves. But I think it's a concern that has to be brought to the panel, quite frankly, and its members need to be informed of that. That is something that assessment policies need to frankly encounter and find a way to establish a balance with.

One last question that I have to ask of the minister has to do with the current B.C. Assessment practices. The minister heard all about this in letters from many constituents — about the way that people felt they were being treated through the process of review.

In the course of questioning B.C. Assessment about its practices, one of the things that came to light is a repeated statement that assessment authorities have no need to be trained in agronomy or to have any particular understanding of farming practice, that they will develop that in discussion with the smallholder or the farmholder, and they will allow the farmer to educate them about agriculture parcel by parcel. That's a proud view held by the authority.

What this suggests is that they're approaching it neutrally. That's the implicit claim in what's being stated. Yet in practice what we see happening on the land is that the assessment officers do in fact hold a particular view of farming, and that view of farming is traditional or industrial agriculture. That leads and shows itself in pronouncements that are made about particular operations.

The one that I remember making the minister aware of was the honey producer who had a B.C. Assessment officer tell her that what would qualify for the purposes of assessment were the areas of land that were used for the hives, which appeared to be a particularly industrial view of how a farm would operate.

Another one came to light yesterday, which was passed on to me and which I really liked. I thought I would just share it with the minister, because I think it characterizes the problem that these people are up against. Yesterday in my constituency, B.C. Assessment informed a farmer that crops that qualify for farm status must be in rows. Now, that's a very particular view of farming, a very industrial view of farming, and completely beside the point. But that was the assessment officer's view.

One of the things — and the minister will answer this however he likes — that I want to get at here is that I think the panel needs to consider the fact that within the assessment authority as it's currently operating, there is actually a systemic bias against organic farming, because there is a wilful misunderstanding of the conditions under which it is practised. One of the things that need to happen in order for us to get to yes around assessment practices is some recognition of the way this type of farming is conducted.

Hon. R. Thorpe: One of the things, in working with the member for Saanich South, is that he is always able to bring forward new little tidbits of information to broaden the database of knowledge, which I appreciate.

But let me just say this, because I think this is important to say. I do have the chief executive officer of B.C. Assessment here today — Doug Rundell. Interestingly enough, when we sat and I talked with Doug and the chair of the board and some of Doug's senior team, they welcomed the review panel. They absolutely welcomed it and embraced it. I see that as a very positive move.

I think the other thing that we all have to realize is that there's no question we're moving through changing times. We're moving through changing times with respect to the demographics of our workforce.

Again, that's why I think it's important to have someone like Keith Skidmore, with 32 years of experience. If someone takes the time to read our service plan at B.C. Assessment, one of Doug's and the board's biggest concerns and challenges is staff — staff management, recruiting trained workers.

From time to time…. I know it's hard to believe, but we all are humans. I can't speak for anybody else's family, but I know that there are no perfect members in our family. I know you find that shocking, but everyone should judge their own family.

I think it's also important, because the member did make some comments…. At least, my interpretation was that the member for Saanich South said that B.C. Assessment's policies should recognize what's going on in communities.

Actually, I think it's very, very important, and that's why, yes, the mayor of Saanich is a co-chair. There were some issues in Saanich. I believe that's warranted, and I believe his expertise and professionalism are a great addition. But that's also why we have the mayor of Richmond, Malcolm Brodie — another urban area, another area of concern because they also have small farm communities.

It's also important that we have Karen Goodings from Peace country regional district, because I think it's important that municipalities understand their responsibilities and the roles that they play in making sure that small- and medium-sized farms can be part of their community.

Climate action is a serious issue. It's one of reducing greenhouse gases, as I said a few times yesterday, by 33 percent by 2020, but it's also about local economics of a community. That's where the hundred-mile diet that the member talks about, that I talk about, that others talk about….

When we take all of these things together, I actually believe very, very strongly that this is the right time for the review panel. This is the right time to take that to partner with the British Columbia agricultural plan so that we can build for our future and learn from our past.

J. Brar: Yesterday we had quite a detailed debate about EDS Advanced Solutions. I have a few more questions on this to the minister. One of the things which we….

Hon. R. Thorpe: Is that all the questions on B.C. Assessment? I have staff here. If there are no more questions on B.C. Assessment, I know they probably have a couple of other things to work on.

J. Brar: Yesterday, one of the particular items mentioned by the minister about the ten-year contract with EDS Advanced Solutions was that there was a built-in refresh which took place after roughly about a year and a half of the ten-year contract.

I just want to know. Was that the only refresh built into the contract, or are there any more coming in the next eight years?

Hon. R. Thorpe: I've been advised that the contract does allow it, on mutual consent of both parties, should they want to sit down and look at things in the future. That provision is there, but it requires mutual consent.

J. Brar: Can the minister clarify, then, as the minister stated yesterday, that the refresh was built in? Was that separate from what the minister said today, or was it basically open from the beginning that, with the consent of both parties, the agreement can be opened any time and renegotiated?

Hon. R. Thorpe: At any point in time in the contract, the parties can mutually agree to look at items in the contract. But it does, again, require mutual agreement.

J. Brar: That will confirm, then, that there was no time line with the refresh which took place about six months ago. That was basically an agreement between both parties — that was the outcome of that — rather than that there was something written in the contract that actually forced both parties to go in and look into the contract with a fresh view and refresh the contract.

Can the minister very briefly tell us the total value, in dollar figures, of the contract at the initial stage and the total value of the contract after the refresh took place?

Hon. R. Thorpe: The original agreement envisaged benefits to the province of $347 million over ten years. With the refresh review it's a further $170 million now for a total, over the 12-year time frame, of $517 million.

J. Brar: I just want to clarify this information I have here. My understanding is, and I want the minister to clarify this, that the ten-year contract with EDS is going to cost the people of British Columbia a total of $570 million, which includes $301 million as a base fee and then $271 million of what is called "potential incremental benefits." Is that the right figure?

J. Brar: I will be more than happy to repeat it. What the minister mentioned is the value to the people of British Columbia. What I want to know is what the people of British Columbia, the taxpayers, are going to pay to EDS to provide services to the people of British Columbia. My understanding is that the total bill to the taxpayers from EDS for its ten-year contract is $570 million, and this was before the refresh.

My question is: what is it after the refresh? The first question is: can you clarify if that amount is right, the $570 million for the total ten-year contract? What was the cost after the refresh? Is there any change in that?

Hon. R. Thorpe: In the first annual report of the revenue management system on page 17, it clearly states that the base fees were $301 million and that the potential financial benefits were $271 million, for a total of $572 million.

With respect to the result of the refresh, there will be a further estimated $60 million in base fees and a further $17 million in potential benefits. I might note that while the vendor is accruing, as a result of that two-year extension, $17 million in benefits, the potential to the taxpayers of British Columbia is $170 million.

J. Brar: So what we know now is that, all together, roughly $77 million was the original cost to the people of British Columbia after the refresh.

My question to the minister is: can the minister very briefly describe for us what were the additional responsibilities handed over to EDS for this $77 million deal for the people of British Columbia?

Hon. R. Thorpe: They are actually carrying on the commitment to carry on the business to British Columbians for two more years, yielding potential increased revenue benefits to British Columbians for $170 million.

J. Brar: If I understand it correctly, that $77 million additional cost is related to just the two-year extended period. Or is that over and above what they were getting for each year?

Hon. R. Thorpe: The numbers that I have given the member are for the entire 12-year period. I also have given the numbers that are specific to the two-year period, the $60 million and the $17 million.

J. Brar: I will move on to a little bit different topic. On page 18 of the service plan, what we see are the targets set for collecting overdue accounts. Those targets are 36.10 percent for '07 and '08. What I want to know, if the minister can explain, is: what is the total dollar value of those 36.10 percent targets?

Hon. R. Thorpe: Based on our understanding of the question that the member asked, I believe that the answer to the question is the answer we gave yesterday of $518.498 million.

J. Brar: This is a bit confusing to me, and I certainly want clarification. Like, 36.10 percent looks pretty low. I may be totally ignorant on this. I want to ask: why 36.10 percent? If the minister can clarify that for me, because it certainly looks pretty low if we are talking about the collection of the amount overdue towards people or businesses.

Hon. R. Thorpe: I have been advised by senior financial staff in the ministry that this is an acceptable percentage, and I think it's important to look at how the percentages are increasing.

What we could do after we conclude estimates in the weeks ahead, if the member would be interested…. We would be more than pleased to provide the member with a detailed briefing on this area so that he fully understands the measurement here — what the state is today and, more importantly, where we're going in the future.

J. Brar: Thanks to the minister for the clarification. My understanding is that based on the figure given by the minister, 36.10 is roughly over $500 million. Does that mean that we, at the end of the day, end up not collecting over a billion dollars, based on this figure?

J. Brar: How much is it, then, that we don't collect, at the end of the day?

J. Brar: The minister simply said no. I asked if, based on the figure the minister gave, which is $500 million, it stands for 36 percent. My understanding is, based on that, then we end up not collecting over a billion dollars. Is that the true figure? The minister said no. I want to know: what is, then, the true figure of uncollected revenue here?

Hon. R. Thorpe: I think it would really be important to have a detailed briefing for the member on this. The one thing we have to keep in mind here is that with the billions of dollars of revenue that are coming into the province, the accounts receivable are not static. They are changing on an ongoing basis.

Of the $518 million…. When we say 36.1 percent, that's the target to collect on the overdue, but the number keeps changing because the accounts keep changing. I think that to just take a point in time and to say that things stop and that therefore this must happen is not what happens in the real world.

We have very, very disciplined approaches to ensure that amounts owed to British Columbians are collected on a fair and equitable basis. We have a number of tools available to us to ensure that that takes place. I really think that on this very complex issue, a detailed briefing…. Just looking at numbers at one point in time, it's very hard to say what's moving and what's not moving, etc.

J. Brar: Thanks to the minister for the offer of a detailed briefing. I appreciate that.

But I think this is a matter of common sense. I mean, I can give the numbers. If you don't have the numbers for this year, there must be a number for last year.

Can the minister tell, then, what the amount was, in a dollar figure, of the overdue account collected last fiscal year? I think that figure should be available there.

J. Brar: Either I'm not making my question clear, or the minister doesn't understand my question. The 36.1 percent stands for over $500 million.

J. Brar: Through the Chair, the figure 36.1 percent stands for how many dollars? If the minister can clarify again.

Hon. R. Thorpe: The goal for collecting on the overdue amount of $518 million is 36 percent for that point in time. That number will continue to evolve, and other measures are undertaken to collect. We make every effort to maximize the returns to the taxpayers of British Columbia, to the citizens of British Columbia who the money is owed to.

J. Brar: If I understand that correctly, the minister is saying that the total amount under this is over $500 million, and out of that, the goal is to collect about 36 percent of the total money.

Hon. R. Thorpe: I am advised that the $518 million is, at one point in time, a number of the amounts outstanding from a number of years, from a number of revenue streams. What happens is…. The goal is to collect 36.1 percent of that in the current fiscal year, but then we have other things coming in, and we have other things going out. So it's a very, very fluid number.

Again, that's why I have offered to the member…. A very detailed briefing on this issue would, I think, be most useful.

J. Brar: I think it's pretty simple. I, again, appreciate the offer for the briefing, but my question is very simple. Last year — I'm talking about a one-year cycle — what was the total amount outstanding? What was collected? You should have the figure, Minister, for the last year. That's simple. I understand that it will keep changing. But last year is last year; it's gone.

Hon. R. Thorpe: I have said — this will be the fifth time, I believe, now — that a detailed briefing on this very complex area would be warranted. Staff do not have the detailed numbers that the member is asking for, but staff do understand the question. Staff will get the detailed information so that we can give the member a detailed briefing on this very complex matter.

J. Brar: I will take the offer that the minister will provide the information as to what is, based on the service plan, actually the total amount overdue, what percentage and the total dollar figure that was collected last year. So I would be more than happy to receive that. Then we can go from there.

I will move on to the next question. We have had a lot of discussion about EDS and revenue solutions. The minister may be much more knowledgeable than I, because I have had this file just for the last two weeks. So I would appreciate it if the minister could very briefly provide me…. As to these two different agencies, what are their tasks or responsibilities? If the minister can provide an overview of EDS and revenue solutions.

Hon. R. Thorpe: First of all, let me just say that every year our ministry, the Ministry of Small Business and Revenue, posts an annual report for Revenue Services of British Columbia. That report is based on the year-end of December 31. I believe that for the last two years we've got that information published on our website by about May 30, May 31 — something like that — and that is our intention there.

I think if the member — and I know he's only had the portfolio very, very shortly — takes the time to read it carefully, it clearly lays out — for instance, on last year's report on page 4 — what account management Advanced Solutions is responsible for, what billing, what payment processes, what collection of overdue accounts.

To properly characterize it, I would say that these items are, for all intents and purposes, the collection of non-tax items, whereas revenue solutions within the ministry collect all of the tax-related amounts due to the province of British Columbia. I would think that that would be the simplest approach.

J. Brar: I do have a copy of the latest report on EDS, the report called Revenue Services of British Columbia dated May 31, 2007. Can the minister tell me if there is also a report available on the other side called "Revenue Solutions" — a similar report?

Hon. R. Thorpe: It's our service plan and our annual report that I believe come out in June every year with public accounts. I should just correct the record. I've said "revenue solutions" a few times. I think I should probably be saying "revenue programs division."

J. Brar: One last question on EDS versus revenue programs, if the minister can provide a very simple clarification. I know the ministry collects almost 60 percent of the total revenue of the province. So what percentage is collected by the revenue program? What percentage is collected by EDS?

Hon. R. Thorpe: I believe the member did ask us that question yesterday, and I know I undertook that we would supply that information to him in due course.

J. Brar: Once again, I will wait for that information, of course, which will be made available.

On page 14 of the service plan under goal 1, called "Service that meets the needs of customers and partners…." There's one goal here that the minister has laid out in the service plan, which requires responding to any correspondence from the people of British Columbia within 14 days. I would like to ask the first question…. Has the Ministry of Small Business and Revenue met that goal 100 percent?

Hon. R. Thorpe: I might just say, if I could, that the staff at the Ministry of Small Business and Revenue have shown, quite frankly, very, very impressive results in their commitment to the continuous improvement of customer service.

I did have the pleasure last night of attending the fourth annual Premier's awards regarding innovation and excellence. I just want to say before I answer this question in detail, because I think this signifies the commitment of the ministry and the staff at the ministry to customer service and to results in customer service….

The Ministry of Small Business and Revenue was up for a Premier's Innovation and Excellence Award in the area of partnership. I'm very, very pleased to advise you, hon. Chair and members of this House. But more importantly, it's to recognize the employees at the Ministry of Small Business and Revenue who won the award for innovation and excellence for a program called BizPaL. This is not only the result of all the employees that work in the BizPaL section, but it's also the leadership of the ministry and the commitment to customer service. So that is a great achievement of which everyone in the ministry is very, very proud.

But let me just go through some of our service standards for the member, to follow up on his question. We have a target of holding 60 provincial sales tax seminars and trying to achieve a 90 percent satisfaction level from those in attendance. So far we have, at the end of December, held 52 and achieved 99 percent client satisfaction.

Inquiries and rulings. To answer general inquiries completed within two business days, our target is 85 percent. We have achieved 86.2 percent. For the inquiries and rulings on complex inquiries completed within 20 business days, our goal is 77 percent. We're on target at 77 percent.

Account registrations and clearances. For registrations completed within two business days, our goal is 90 percent. We're running at 97.5 percent. For clearances completed within five business days, our goal is 85 percent. Ministry staff are achieving 92.6 percent.

With respect to refunds completed within 30 days, our target is 87 percent. We're achieving 96.5 percent. On correspondence completed within 14 days, our target is 95 percent, and we're achieving 96.3 percent.

J. Brar: It sounds pretty good that within 14 days, the government in every ministry will respond to the people of British Columbia. It sounds pretty good. I appreciate the minister providing information from the Ministry of Small Business and Revenue.

My question is: how do you monitor, on this particular standard, the other ministries in government?

Hon. R. Thorpe: These are the standards for our ministry. These are the standards, led by my deputy minister and her team in cooperation with me, established for our ministry. We measure ourselves. Other ministries measure themselves.

J. Brar: My understanding is that this is only the standard of the Ministry of Small Business and Revenue then, not a set of standards for all the ministries. I think that's the clarification that the minister gave.

I will move on to another topic, keeping in mind the time we have, and that is PST review. I know the minister is very excited about the PST review. One of the roles the minister has is to make recommendations to the Minister of Finance for budget considerations. I want to ask the minister: what recommendations were made last year to the Minister of Finance for budget purposes? If the minister can list those recommendations.

Hon. R. Thorpe: I'm very pleased and proud of two PST reviews we've conducted in the last two and a half years in British Columbia.

The first review, phase 1, with 21 different consultations around the province, resulted in policy decisions by the Minister of Finance to put $120 million over three years back into the pockets of small business and individuals throughout British Columbia through streamlining and simplifying provincial sales tax.

With respect to phase 2, I believe there were eight or nine changes in policy that took place, resulting in $9 million put back into the pockets of individuals and small business areas throughout the province.

With respect to the recommendations and the thoughts that we make, we have posted on the website the inputs that we do get from people around the province. With respect to our recommendations and the discussions that take place with the Finance Minister with respect to tax policy…. They're protected under budget confidentiality. Those are tabled the third Tuesday of every February in the Legislature.

J. Brar: I am a bit disturbed by the statement of the minister, and of course I would like to have clarification. I understand budget confidentiality, but the budget has been tabled now. I don't know whether that will adjust anymore. I would certainly like clarification from the minister on that.

Once again, I would like to know why it's not possible for the minister to list the recommendations made by the minister to the Minister of Finance for budget purposes.

Hon. R. Thorpe: I'm sure the member would understand that the budget and tax information, tax advice, tax inputs and tax consultations are very privileged information. The preparation of a budget is very privileged information in all western democracies, under

the protocols from Westminster. I am sure that members of this House can respect and appreciate that long tradition of budget confidentiality. We approach our recommendations to the Minister of Finance and our deliberations with the Minister of Finance on those issues in that longstanding tradition of budget confidentiality.

J. Brar: I would like some clarification, because my understanding, again, is that the budget is confidential until the budget is tabled. The budget has been tabled by the Minister of Finance, so the recommendation made by the minister at this point in time….

If the Chair can clarify whether those recommendations are confidential at this point in time or not. Is it possible for the Chair to give a ruling on that?

The Chair: The minister's clarification about the confidentiality of prebudget consultation, as the minister has mentioned, I think stands. So I'll let the minister explain to you one more time.

Hon. R. Thorpe: The member may want to check within his own caucus. I know they don't like to talk about the decade of the '90s, but in fact, they were the government of the day. The member may want to consult with his House Leader, who was a member of that government at that time, on budget confidentiality.

I believe in the traditions, which have been long established in the parliamentary system, of protecting the confidentiality of budget inputs. Budget discussions are guarded by the parliamentary tradition of confidentiality.

J. Brar: The minister talks about the 1990s. I'm very surprised that we always talk about the last century, and we come from last to lost century here.

When it comes to small business, Minister — since you mention it…. That was not my intent, but I would like to make reference to that. There is no doubt that when it comes to small business, the growth of small business under the 1990s was much bigger than in the so-called 21st century, Minister, under you. As I mentioned yesterday, the number of small businesses grew every year by over 11,000 per year during those nine years, as compared to only 7,000 new businesses coming up since 2001.

Not only that. What I see here is that the small business tax was the lowest in the country under the NDP. It's not the lowest now. It is No. 4. You know that.

I want to say this as well. The big corporations, which of course are very friendly to the government, got a tax cut from 16.5 percent down to almost 11 percent now. It's a huge tax cut, over $5 billion, as compared to what small business got — peanuts. They got only 1 percent, 1.25 percent from this government. That's the performance, particularly of your ministry, when it comes to the small business community — which is not very great, Minister, if you know that.

I would like to move on to a different question, then. My question will be: what was the actual amount of taxation reduction as a result of the PST review announced in Budget '07?

Let us just go back to some of the comments that the member made. Hon. Chair, you were here. The member there actually brought up the issue, so I feel obligated to respond. Let us say that under the NDP, the small businesses in 1999 were 353,700. They then fell to 339,600 and then to 337,400. Since then, though, they've increased to 347,900 to 359,600 to 364,000 and to 370,700 at the end of 2006.

I know it's easy for members on that side of the House to be very, very selective in their memory and their extraction. But let us say that under the NDP, the number of employees in small business in 1999 was 932,400. The following year it fell to 899,700. That doesn't sound like things going up, to me. That sounds like things going down, to me. Today, at the end of 2006, over 1.025 million people are in small business.

With all due respect, to listen to this member talk about tax reductions and what they did…. Ladies and gentlemen, you know it. I know it. And members of this House know it. All they did was increase taxes to people. That's what they did.

Matter of fact, in 2001, when we introduced a 25 percent tax reduction across the board for all British Columbians, they voted against it. In 2005, when we introduced a 10 percent reduction in personal income taxes so people could have more money in their pocket, they voted against it. In 2008, when we introduced a further personal tax reduction, they voted against it.

It is a little bit hard to take the members on that side of the House talking about their concern for small business, while in Balanced Budget 2008 we reduced small business taxes from 4½ percent to 3½ percent and to 2½ percent in 2011, and they voted against it. They should tell British Columbians that they're for tax increases. We're for tax decreases.

J. Brar: I just want to put on the record that if you can speak loud, it doesn't mean you are correct.

I want to repeat this for your knowledge. Under the NDP, the small business tax was the lowest in the country. Under your leadership, the small business tax is No. 4 in the country. If that's wrong, you should stand up and correct it.

You're talking about tax reductions. The tax breaks the Liberal government gave are over $5 billion to big corporations, and the total number of corporations is 20,000. On the other hand, for small business, what the government gave is 1.25 percent. It's peanuts for the small business community, Minister.

You cannot stand up here and speak loud and say that the opposition is wrong. You're wrong on this file. You can stand up and say whatever you want to say again.

I would move on to a new question. The minister mentioned a figure the last time, which was a $120 million PST reduction in Budget '07. I would appreciate it if the minister could stand up and inform us as to how much out of that $120 million PST exemption was for the oil and gas sector.

Hon. R. Thorpe: I thought we were debating the estimates of 2008-2009, not the estimates of 2007.

J. Brar: The minister can say that the answer is no. I would repeat: what percentage? What was the total dollar figure in that budget, in those exemptions which was towards the oil and gas sector? If the answer is no, stand up and say no.

The Chair: If I could just remind the members that the question before the committee is Vote 41. Try and stay on that subject.

Hon. R. Thorpe: I did understand the question about the PST review — the $120 million reduction as a result of phase 1 and the streamlining simplification. There was nothing in there back to the oil and gas on the PST simplification in Budget 2007.

J. Brar: We're certainly debating the current budget, in my opinion, because that's part of the debate.

Can the minister tell us, then, what the projected amounts are for the current year, which is '07-08? And out of that, what percentage and dollar figure are going to go towards the exemption — if there is any PST exemption towards the oil and gas sector?

Hon. R. Thorpe: This estimates debate here is about the Ministry of Small Business and Revenue. The items that the member is talking about are clearly laid out in the budget and fiscal plan of 2008-2009 as tabled by the Minister of Finance. Those detailed questions on tax reductions versus the various sectors would be most applicable to the Minister of Finance in her estimates.

J. Brar: I understand. Actually, I'm very clear about the difference between the Ministry of Finance and the Ministry of Small Business and Revenue. Yes, they deal with the tax policy. Yes, the minister is responsible to collect revenue.

That's what I'm asking. What percentage of the total PST exemptions that the minister is responsible to collect in the next year is going towards the oil and gas sector? If that's not part of your responsibility, then explain it to me.

Hon. R. Thorpe: Perhaps I didn't understand the question, but the member used words that I thought…. He said "collect," and then he talked about exemptions. You actually don't collect exemptions.

J. Brar: We can continue this debate as long as we want, but I certainly see that the minister is not prepared to respond to that and throws away those kinds of questions to the Minister of Finance.

I will move on to another question. There has been a recommendation on the table of the minister about PST and GST harmonizing. I would like to ask the minister where the minister is. Is that on the table, or is there any action on that?

Hon. R. Thorpe: First of all, that is tax policy, which would fall under the Minister of Finance. But I have commented on that in the past, and I will comment on that here today, because on this particular issue, the Minister of Finance and I have worked extremely closely and have both said exactly the same thing to the public.

It sounds very attractive to talk about harmonization, but one of the things that people have to realize is…. I can't remember if it was the competition board or the Progress Board that estimated that flow-throughs through harmonization to taxpayers could amount to $2 billion a year. I think that careful consideration has to take place when you contemplate those kinds of things.

In British Columbia we have an extensive exemption list. Under GST, there aren't exemptions. Let me just give you a couple of examples. One is that restaurant meals in British Columbia are PST-exempt. They are not GST-exempt. That is a serious question. One that I think all members in this House would have concern about is that children's clothing is PST-exempt, but it's not GST-exempt.

Those types of decisions have far-reaching ramifications, and I can say that harmonization has not been on our agenda. We have been in phase 1 of a review to simplify and streamline and phase 2 to have streamlining and simplification continued.

We have focused on reducing small business taxes from 4½ percent to 2½ percent and increasing the threshold from $200,000 to $400,000. We've reduced personal income tax across the board. Most British Columbians see at least a 37 percent reduction in their British Columbia income taxes, and over some 250,000 British Columbians now pay no income tax, compared to paying income tax in the year 2000.

J. Brar: I think we keep hearing from the minister about how many tax breaks are given to people, but I want to repeat this. In the last budget the only people who got the tax break are the oil and gas companies and big banks, when the average person has been hit by a gas tax, particularly the small business people, as we mentioned yesterday.

We talked about the trucking industry. I have had complaints from a lot of people who drive trucks that their cost, because of the carbon tax or gas tax, is going to go up almost $6,000 per year when it hits 7½ cents.

The same for the taxi industry. They are also small businesses and part of your portfolio. The cost for one taxi per year, when they are hit by a 7½-cent gas tax, will go up almost $200,000 per year.

As for the concept of a revenue-neutral budget, it may be revenue-neutral for the treasury of British Columbia. It is certainly not neutral for those small business people — the taxi industry, the trucking industry. It is also the case for many more who are dependent on transportation. So big people got big breaks, but small business didn't get anything under the last budget.

I want to ask, probably, one question about the round-table discussion, which is, I think, important to get feedback from the people of British Columbia. I would suggest that the minister should have — particularly because of the impacts of this budget on transportation, on the trucking and taxi industries — a special round table with that community, because that's what I hear from them since the budget has been tabled.

My question to the minister on the round-table discussion is…. I know the minister has translated information into different languages, which I appreciate. I think that's a good step. But that serves only part of the purpose, which is that people have the information. People can read it in their own language, which is a good thing.

But when it comes to the round table, I think the concept is listening to the people of British Columbia. I think there are language challenges as well, so this will serve only one part of the language sensitivity, which is that people can read the information. But when you have to listen to the people of British Columbia, at this point in time, and you've gone around the province and conducted various round tables…. My question to you is…. It's a good gesture to have translation into different languages. Has there been any round-table discussion in a language other than English?

Hon. R. Thorpe: First of all, let me just make some comments back to the member on the comments that he made before he asked his question. You know, we can have our differences, but there's absolutely…. The record clearly speaks for itself.

We have continually, as a government, since we got elected in 2001, worked at substantially reducing personal taxes — no question about it. Every time, the NDP have voted against it. So it's a little bit disingenuous for people to stand there and say that they're for small business, when actually, the record shows that they vote against it. Second….

C. Puchmayr: Point of order. The member continues to mention voting against. What we voted against was the budget, which is a vote of non-confidence against this government, and the record should reflect that.

Hon. R. Thorpe: We've reduced small business taxes 4½ percent to 2½ percent. They voted against it. The record is clear.

Some members on that side of the House are for spend, spend, spend. The former critic makes no bones about it. He's for spending more, and he has said — and he is on the public record — that as you spend more, you must increase taxes.

We know where they stand. They believe in big government. They believe in higher taxes. We believe in putting money back in taxpayers' pockets.

With respect to the carbon tax, sometimes it's just a little bit too much to take. Perhaps the member may want to talk to his own Finance critic, who said: "A carbon tax could work because it's simple and predictable. The incentive is to emit less because you pay less tax is pretty direct." That was September 19, 2007. That's their Finance critic.

With respect to the diversity of British Columbia. In my particular family I'm very blessed that my wife is from the island of Trinidad and Tobago. My oldest daughter was born in Trinidad. My youngest daughter was born in Israel. My own family is of English and German descent. The diversity of our province is one of our biggest assets.

Yes, this a step forward. In fact, we have in our ministry some 32 languages that are available to British Columbians for service. We are making every effort. Again, we have different languages with respect to small business and how you set up small business and how you get service as a small business. We have made huge steps.

I have no doubt that as we move forward, we will continue to expand our services, including having round tables in the mother tongue of those who have come to British Columbia to build British Columbia into the future, as we look to the Asia-Pacific — to India, China, Korea and all of those other countries — for the great future that British Columbia has as Canada's only Pacific gateway.

J. Brar: I will certainly shorten the last question. I appreciate all the work done by the minister, but has there been any round-table discussion in a language other than English?

Hon. R. Thorpe: To this point in time, no, but we are working with the various ethnic communities in the province to expand our services, expand our reach. We look forward to working with all of the communities of British Columbia as we work together to bring the province together, not divide it.

Hon. R. Thorpe: I rise to ask us to report resolution of the estimates and to ask the House to sit again at the next sitting of the House.

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