2009 Legislative Session: First Session, 39th Parliament
HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

official report of

Debates of the Legislative Assembly

(hansard)

Thursday, September 24, 2009

Afternoon Sitting

Volume 3, Number 5

[ Page 799 ]

THURSDAY, SEPTEMBER 24, 2009

The House met at 1:33 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

L. Popham: I have ten guests to introduce today. Nine of them are part of our 13,000 blind people in B.C. The other guest is a guide dog named Hilly. It's Meet the Blind Month in October, so I would like you to meet Elizabeth Lalonde, Jeff Lalonde, Erin Lacharity, Miriam Yusefi, Oriano Belusic, Doris Belusic, Shane Baker, Frederick Driver and Kyla Berry. Please make them feel welcome.

Statements
(Standing Order 25B)

EMPLOYMENT AND TRAINING
OF BLIND PEOPLE IN B.C.

L. Popham: Members of the Canadian Federation of the Blind have joined us in the House today to help me announce that October is Meet the Blind Month. Given proper training and opportunity, people who are blind can work in competitive jobs, pay taxes and participate fully in community life.

However, because of lack of proper training and opportunity, the unemployment rate of blind people is exceeding 80 percent. There are approximately 13,000 legally blind people in B.C. Among those people, there are approximately 3,000 to 4,000 working-age blind.

[1335]

One huge barrier to blind people getting ahead is that there is no publicly accountable funding for their rehabilitation in this province. There is funding in the system for persons with mental and physical disabilities to receive rehabilitation, but this does not exist for persons who are blind. If you became blind, where would you go for training in essential blindness skills?

There are three highly successful world-renowned blindness immersion centres in the United States. Elizabeth Lalonde, one of our guests today, has received a $45,000 grant from the National Federation of the Blind sister organization in the United States to attend one of these training centres. She will be leaving tomorrow for nine months of intensive training.

This type of training and funding we should be offering in British Columbia. It is essential blindness immersion training.

Elizabeth has joined us today with three other blind British Columbians who want and need to go to this type of centre. Their names are Shane Baker, Miriam Yusefi and Erin Lacharity. They need to go as soon as possible so that they can get the skills they need for life and employment. Rehabilitation is a right, it is a necessity, and it is the only humane answer to the problems faced by blind British Columbians.

Hon. K. Falcon: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

Hon. K. Falcon: Today in the gallery a former executive assistant of mine is here with her husband and her new baby boy. I would like the House to please make her welcome. She was on leave for her pregnancy and, obviously, the successful birth of a very beautiful young boy. Corrie Delisle, her husband, Dave, and baby, William Delisle, are here. I would ask the House to please make them welcome.

Statements
(Standing Order 25B)

MOUNT WASHINGTON
ALPINE FOOD FESTIVAL

D. McRae: On Labour Day weekend I had the honour of meeting Peter Gibson, general manager of Mount Washington Alpine Resort, to attend the annual Mount Washington Alpine Food Festival. The event is a celebration of culinary excellence, a chance for participants to learn cooking techniques from expert local and guest chefs, and visit an incredible alpine market that showcases food products from both the Comox Valley and Vancouver Island.

The event began on Friday night with emcee Corbin Tomaszeski, host of the Food Network's Restaurant Makeover show, introducing attendees to a variety of fare, with guests noshing on products ranging from locally brewed Surgenor beer to bison sliders from Island Bison located in Black Creek. Guests were given a chance to meet three local best-selling cookbook authors.

On Saturday guests had the opportunity to attend a variety of cooking classes taught by local and guest chefs. The chefs taught participants how to cook recipes ranging from chanterelle mushrooms to a chorizo, chicken and shellfish paella. All the restaurants highlighted local products located on Vancouver Island. On Saturday evening people sat down to an eight-course gala dinner located in Mount Washington's lodge, and the chefs paired B.C. wines with exquisite courses.

On Sunday the alpine market was open and gave visitors a chance to sample products. My family and I sampled the rich dark chocolate from Dark Side
[ Page 800 ]
Chocolate, located in the village of Cumberland; the smoked oyster spread from Fanny Bay Oysters, located in Baynes Sound. Halstead Farms organic poultry was barbecued to perfection by barbecue king Rockin' Ronnie Shewchuk. Locals Restaurant, located in the city of Courtenay, steamed fresh mussels to perfection, and there were a variety of cheeses from Natural Pastures Cheese Co., who have won world championship gold medals for their products. There were many more.

Celebrating and valuing locally produced food products has never been as important as it is today. This resurgence has encouraged people to support their local agriculture industry and eat products that are both better for us and better for the environment in which we live.

I wish to compliment Mount Washington for the venue, the economic development society for making agriculture a cornerstone of its focus, the food producers of the Comox Valley and Vancouver Island and the people who have, by buying locally, helped grow a vital industry in the province of British Columbia. Bon appétit.

ACCESS TO GOVERNMENT INFORMATION

D. Routley: Next week marks the Right to Know Week in British Columbia. This is a very important week. We won't be sitting, so I would like to refer the members to it today.

In 1822 James Madison, the fourth President of the United States, said: "A popular government without popular information, or the means of acquiring it, is but a prologue to a farce or a tragedy, or perhaps both. Knowledge will forever govern ignorance, and the people who mean to be their own governors must arm themselves with the power, which knowledge gives."

Our own information officer, Mr. Loukidelis, says that access laws are of fundamental importance to open and accountable government. Without a right of access, citizens are unable to use the information they require to participate meaningfully in the democratic process and to hold politicians and bureaucrats accountable to the citizenry.

[1340]

Mr. Madison's most distinctive belief was that government required checks and balances to protect individual rights from the tyranny of the majority. We have an obligation in this House to those principles.

People across this world struggle for the right to know — the right to know about products, the right to know about their governance. In this digital age, in this age of international trade, we as citizens can feel small — a small part to this equation. It is our duty to maintain vigilance over this right to know. We have an obligation to it, to those who elect us, to knock down the barriers to our right to know, not to place new walls between the people and the information needed for a healthy democracy.

I ask all the members in this House to recommit, on this day and next week, to the right to know, to the right for all of our citizens to have the information it takes to have a healthy democracy in the name of our province, British Columbia.

MOUNTAIN-BIKING-TRAIL PROJECT
IN BURNS LAKE AREA

J. Rustad: Rural B.C. is filled with people who have a dream and, through drive and determination, make it a reality. Such is the case with Kevin Derksen, Pat Dube, Dave Sandsmark and the entire Burns Lake Mountain Biking Association. Their passion for mountain biking — combined with the great terrain of Boer Mountain, the Burns Lake Community Forest and the willing hands of the community — produced a world-class facility.

Through their determination, the association, in partnership with the Burns Lake Rotary Club and the Minister of Tourism, were able to access a grant for more than $400,000 through the job opportunities program to enable the bike association to expand their existing trails and their dreams. Professional mountain downhill biker Jay "Hoots" of Norco Bikes and the Gravity Logic trail crew helped design an unbelievable course.

With their vision and expertise, Burns Lake will encompass a variety of the unique and technical aspects of biking that have put British Columbia on the North American trail-riding map. The quality of the trails rivals the world-renowned Whistler Blackcomb and North Shore mountain trails. They're truly a marvel and well worth the trip to Burns Lake to explore and compete.

With over 4,000 hectares in area, this park is scheduled to include over 100 kilometres of cross-country trails, 15 kilometres of intermediate and expert trails exploring the mountain, a skills park with 20 drops and five jumps, and an extensive network of downhill and free-ride routes — all of which connect to the beautiful and challenging Kager Lake trail system, a network flowing through three different lakes and further excursions of breathtaking wilderness on the doorstep of Burns Lake.

Please join me in extending an invitation to the world to come and explore this great site, as well as to congratulate Burns Lake Biking Association on their achievements.

PARAMEDICS LABOUR DISPUTE

M. Karagianis: Today I rise in the House to pay tribute to a remarkable group of men and women who serve my community and communities right across British Columbia, saving lives every day with exceptional dedication and expertise. Whenever we have needed them, they have been there, just a 911 call away. They are the amazing paramedics of British Columbia.
[ Page 801 ]

Provincewide the B.C. Ambulance Service employs about 3,500 of them, and they provide emergency pre-hospital care to the 4.3 million B.C. residents and those who visit our great province. Last year they responded to more than 525,000 calls for help.

Despite their vital role in our health care system, B.C.'s paramedics are underappreciated by government. The British Columbia Ambulance Service has fallen from a world leader in pre-hospital emergency care. Now, due to a continued lack of funding, the system is stumbling under a shortage of ambulances, paramedics and related infrastructure.

On April 1 members of the Ambulance Paramedics of B.C., CUPE 873, went on strike. Even though they are on strike…

Interjections.

Mr. Speaker: Members.

M. Karagianis: …they have continued to provide essential services to our communities, showing their enormous dedication to their job of saving lives. Yet nearly six months have passed since the strike began, and there has been no settlement.

Our paramedics know the system is not functioning properly, and they're standing up to improve ambulance service and save lives. That takes courage and dedication, and I applaud them for it. This dispute could have been avoided, yet it has dragged on needlessly.

[1345]

I am hopeful that a resolution will be achieved very soon. My community and communities across British Columbia need to know that our lifeline is secure. Paramedics must have the proper training, equipment, compensation and working conditions they deserve. It can make the difference between life and death.

Mr. Speaker: I want to remind members — and the member — that in the spirit of the two-minute statements, they're meant to be non-partisan.

Interjections.

Mr. Speaker: Members. Members.

HENRY LELAND HOUSE AND
SUPPORTive HOUSING IN KAMLOOPS

T. Lake: On a cold January night in 2007 Henry Leland, a homeless person in Kamloops, died from exposure. Last Friday, along with my colleague the Minister of Tourism, Culture and the Arts, I was honoured to attend the opening of Henry Leland House, a 28-unit supported-housing development in downtown Kamloops that will help ensure that this kind of tragedy is prevented.

I live in the neighbourhood, and I have watched this B.C. Housing homelessness initiative project redevelop what was a run-down boarding house into this modern, energy-efficient, well-managed building that provides supports for residents at risk of addiction. I was humbled to listen to Randy DeWitt, the last person to see Henry Leland alive that cold January night, talk about his own struggles with alcohol and his experience living under bridges for the past three years after being evicted from the very building that would now provide him with a safe and supportive home.

Randy invited Mayor Peter Milobar, the minister and myself up to his room to join him for a cup of coffee, and we learned how he was now taking classes through Thompson Rivers University, how he was managing his addiction and how he hoped his new life would continue in a proper direction.

The Henry Leland House is managed by the AIDS Society of Kamloops and the Kamloops branch of the Canadian Mental Health Association. It illustrates the remarkable community cooperation to reduce homelessness in Kamloops. This cooperation involves the provincial and federal governments, a city council that has long been a leader in providing incentives for social housing, and non-profit organizations that work closely with each other and with the community.

The Henry Leland House continues to build upon the development of several other very successful housing initiatives in Kamloops — such as the Bedford Manor, the Victory Inn and Georgian Court, all operated by the John Howard Society. It should be noted that despite some neighbourhood concerns about these social housing initiatives, no negative impacts have occurred. In fact, people report an improvement in the neighbourhoods in which they are located.

There's no question that these Kamloops initiatives are changing people's lives for the better, and I want to congratulate Bob Hughes and all the other members for making this possible.

Hon. B. Penner: I seek leave to make an introduction.

Mr. Speaker: Proceed.

Introductions by Members

Hon. B. Penner: I have the honour to introduce a young couple that I had the pleasure to have an interesting lunch conversation with just a few minutes ago. We are joined by conservation officer Kevin Van Damme and his wife, Coleen, who live in Clearwater, British Columbia.

Kevin is the recipient of the Conservation of the Year award, which is an award given every year to the conservation officer who has been recognized by his or her peers for having gone above and beyond the normal call
[ Page 802 ]
of duty to exemplify the values of the conservation officer service — namely, integrity, public service and protection of the environment.

Mr. Van Damme is recognized for his outstanding commitment to the ministry and the people of British Columbia, and I ask that the House please make him and his wife welcome.

Oral Questions

REPORT RECOMMENDATIONS
ON PROTECTION SYSTEM FOR
VICTIMS OF DOMESTIC VIOLENCE

C. James: In 2007 the Premier made a commitment to address domestic violence. Here's what he said. "Eliminating violence…will require a long-term, concerted effort, and our government is committed to leading the way in North America…."

Today B.C.'s Representative for Children and Youth tabled her report on the tragic death of Christian and his family, and this is what she said: "There is no coherent policy framework for responding to domestic violence in B.C., and children exposed to violence are not adequately supported."

Yet as we know, this government continues to underfund and neglect the Children Ministry. So my question is to the Minister of Children and Families. Today, as we all remember this tragic loss, will the government make a commitment today to support families exposed to domestic violence?

[1350]

Hon. M. Polak: The report that the representative tabled today takes us back to a horrible crime, what is truly an unspeakable event. For those who have had a chance to read the report, I can tell you that it is one that is not only difficult to read, but it is difficult to comprehend how anything like this could ever happen in a family.

We are absolutely committed to resolving the issues that the representative has raised in this report, and I am proud to say that work is already underway. We certainly owe that to the memory of this family.

Mr. Speaker: Leader of the Opposition has a supplemental.

C. James: I'd like to quote again from the report. "The tremendous risk of harm to Christian was not fully appreciated by those who were in positions of authority because the necessary structural components to do the work of assessing and protecting were not in place. We failed Christian."

I hear this government talking about leading the way, but let's look at the reality. Fewer staff providing services, budget cuts, fewer supports for children.

Again, my question is to the minister. Will she explain how fewer staff and budget cuts will help strengthen supports for families?

Hon. M. Polak: It's clear from the representative's report that there were quite a number of people who were working very hard to try and do the right thing for Christian and his family, to try and protect him and his mother. Sadly, they were working in silos. They weren't integrated in their approach. They weren't collaborating.

I'm quite confident that every one of those people who were working with that family thinks probably every day about things that they could have done differently, choices they could have made that would be different.

Our task now is to learn from this report, to learn from our own review, to learn from the eventual report of the coroner's inquest and to move forward to provide the services that are needed.

But I want to remind the member that we are at a time now when we are seeing an increase in the number of social workers around our province, when we are seeing an increase in the amount of funding that is going to our ministry. I can tell you, Mr. Speaker, that the efforts of all those social workers and the efforts of us as we take a look at the funding we have…. Those efforts are going to be directed toward providing the very best in support and service for children.

Mr. Speaker: Leader of the Opposition has a further supplemental.

C. James: We've heard these kinds of words before. We've heard these kinds of words before from this government without actions and follow-up and without the resources to put the necessary services and supports in place to ensure that these kinds of things don't ever happen again.

The report has called on this government to take responsibility for B.C.'s families. The report says that "the key ingredient for success is political will. It can be done, because it's being done elsewhere, and it should be done immediately."

So my question again is to the minister. Will she agree to do what needs to be done and today — today in this Legislature — make a commitment to this House to implement all of the recommendations in this report?

Hon. M. Polak: We are absolutely committed to resolving each and every one of the issues that are raised in this report. We are already working together — between the Ministry of Children and Family Development, the Attorney General's ministry and also Public Safety and Solicitor General — to review our current practices and services, to identify any potential barriers that may exist and to determine how and when we will be able to remove barriers that exist even now that prevent women
[ Page 803 ]
from reporting abuse and prevent women from seeking help.

It is important for us to recognize that with a report of this nature, what is drawn to our attention is the very complex nature of domestic violence — the fact that this isn't something that can only be dealt with by social workers or by police or by courts.

I want to quote from the representative's report, because she makes what I think is a very important statement and one we should all be paying close attention to. "The onus cannot be left on child protection workers. Awareness must be raised amongst not only police and criminal justice workers but the general population. Friends, neighbours and family all play a role."

We all have a role to play in ending domestic violence.

[1355]

M. Karagianis: Glacial — that is how the children's representative has described the progress that this government has made on previous recommendations, because in fact, there have been other reports before this.

Today in her report, the representative noted that Christian Lee's death may have been prevented had there been consistent tools, and trained and coordinated front-line staff.

Again, this is not the first time we've heard these recommendations for this government, and yet the government is cutting staff and key supports — the things that British Columbia's most vulnerable need to escape family violence. How will cutting these supports help vulnerable families, and how will it help women and children escape from violence in their homes?

Hon. M. Polak: Once again, we're confronted by a horrible crime, a terrible tragedy, and something that brings before all of us the question: what more can we do to help end domestic violence? But it is absolutely incorrect to say that we are cutting staff in the Ministry of Children and Family Development.

We agree that there was an uncoordinated approach. We agree that there was a need for integration. We agree that the police, the social workers — all of those trying to do their best for this child and his mother…. We agree that with all of those people, there needed to be a different type of response.

That's why we have already put in place a step-by-step protocol with the Saanich police department, the Oak Bay police department and the Victoria police department. Not only have we signed that protocol with them, which was developed jointly, but we have also completed training for the police departments and for MCFD staff.

As we work together between our three ministries, we will continue to identify ways in which we can strengthen the services that we provide to women and to families.

Mr. Speaker: The member has a supplemental.

M. Karagianis: Well, you know, Mr. Speaker, the Premier of this province promised that this province would lead the way in protecting victims of domestic violence. In fact, the record has been abysmal and has shown anything but.

The B.C. Children and Families Ministry is going to be hit with cuts, despite what the minister is saying here — cuts to budgets, cuts to front-line staff and a plan to serve fewer children in the future. So it seems to me that it's time for this government to actually step up and show some leadership here and put in place resources that will protect the most vulnerable.

I would like the minister today to commit to following every single recommendation that came out of this report and to reporting back, as is recommended in that, to this House on how the progress has been on implementing every single recommendation. I'd like that commitment today here in this House.

Hon. M. Polak: The member well knows that this is a complex and thoughtful and constructive report that has been given to us by the representative. We are pleased to have the opportunity to learn from the kind of extensive review that she's able to do because of her broad powers that were granted to her by this Legislature.

Together with my counterparts in the Ministry of Public Safety and Solicitor General and the Attorney General, we will be conducting a thoughtful and comprehensive review of this report as is warranted by its nature. We will be then providing our detailed report, with respect to response to this, to the committee — which, again, the member well knows is the appropriate place for that.

M. Elmore: Two days ago the Solicitor General said that cuts to funding for domestic violence programs are just an administrative cut. But that's not what the executive director of Family Services of Greater Vancouver believes. At a meeting last night Teri Nicholas made it clear that these cuts will prove damaging for women and children escaping violence, and these cuts are core to the services that are desperately needed.

[1400]

To the Solicitor General: how does cutting supports for the most vulnerable live up to the Premier's commitment to address this serious problem?

Hon. K. Heed: Thank you for bringing your concern forward, member opposite. I sympathize with these victims of domestic violence. I sympathize with what the Lee family also had to go through. I'd like to take this opportunity to thank the representative for her work on the tragic crime that took place here.

We want to make sure that we deliver our services in the most coordinated fashion possible, in the best way
[ Page 804 ]
we can at the time and when it is needed for victims of violence, so we can prevent tragedies of this nature from taking place.

We are truly working on integrating and coordinating our services and taking the lead in our ministry to deal with those. We are working with service providers to ensure that we meet that goal of better coordination and better integration so we can truly deliver a meaningful service.

Mr. Speaker: The member has a supplemental.

M. Elmore: The representative said today that we need action and not words from this government on this issue, and support is needed now for these women and children. This Premier and this government pledge to make addressing domestic violence a priority through a long-term, concerted effort. Now the Solicitor General is cutting $440,000 this year and $1.2 million next year in funding for precisely the programs meant to protect women and children.

To the Solicitor General: is cutting over $1.5 million in critical supports for women and children his definition of a long-term, concerted effort to address domestic violence?

Hon. K. Heed: We have actually increased funding to deal with victims of violence by $2.4 million to $43 million. We are also investing $32 million into the operation of 24-7 transition houses in British Columbia. We have a 24-7 VictimLINK program in place with multi-language capabilities.

We have domestic violence response units in this province that pair police officers with social workers with the resources that we need in order for us to ensure that we are increasing counselling to these victims, increasing our outreach to these victims and increasing support to the victims when it's most needed.

L. Krog: I'm not entirely sure that the Solicitor General gets it. Increasing support for victims is all well and good, but we have a long history of reports in this province: Honouring Christian Lee, 2009; Keeping Women Safe, 2008; the Hughes report on children and youth, 2006 — report after report pointing to serious gaps, and a government that doesn't seem to understand the problem, doesn't seem to realize that prevention is key here.

So my question to the Solicitor General is simply this. How many reports will it take before this government realizes it has to make domestic violence a genuine priority, and will this government put its words where its mouth is and provide genuine resources for women and children?

Hon. K. Heed: Our government takes domestic violence very, very seriously — our prevention efforts in domestic violence and our response in this domestic violence. We look at reports that do come forward. We work with those reports and learn from the reports.

The report that the representative has brought forward has several recommendations. We will review the report and work on ensuring that, once again, we keep domestic violence at the top of our priority list.

[1405]

We are investing more. We've invested $2.4 million more into dealing with victims of violence. We want to ensure that we have meaningful responses when the victims are most in need.

Mr. Speaker: Member has a supplemental.

L. Krog: Hon. Speaker, saying this government makes it a priority doesn't make it a priority. It's actually doing something. Cuts to the women's ministry, elimination of zero-tolerance policies, cuts to women's centres all across this province — that has been this government's response.

Now the Solicitor General will be making cuts that will strike at the heart of the most critical programs meant to protect victims of domestic violence. It's time for this Solicitor General — and he is the person there responsible — to stand up and ensure that the resources go where they are desperately needed. So will he agree today to implement the report's recommendations?

Hon. K. Heed: Thank you for bringing your concern forward. Again, I want to thank the representative for her report. We're in the process of reviewing that report. We have met with the representative. We are ensuring that we have the technical aspects looked at as a result of that. But I want to assure the members opposite that domestic violence is a priority in this province and will continue to be a priority in this province.

We are ensuring that we have 24-7 transition houses available to people here in British Columbia. We're ensuring that we have VictimLINK, the phone service available in multi-languages, for people in British Columbia. We're ensuring that we have victim safety units operating in the province. We're ensuring that we have domestic violence units in British Columbia, that we have court support here in the province and that we have enhanced support for newcomers here in Canada. At the end of the day, we all have a common goal to deal with domestic violence in the province of British Columbia.

GOVERNMENT ACTION
ON VIOLENCE AGAINST WOMEN

D. Black: I have a very simple question for the Solicitor General. Could he tell this House: how does cutting $440,000 right now to transition houses, to counselling
[ Page 805 ]
services for children and women match up to his stated priority that violence against women is a priority of this government? Can he answer that question today?

Hon. K. Heed: Again, thank you for bringing that concern forward. And again, we are working with service providers here in British Columbia. We are ensuring that we have programs available for victims of violence, that we are keeping our transition houses open 24-7. We are working with them to determine what we can do to make our services better at the time when it's needed — to have those meaningful services to people when they need them.

Matter of fact, I have met with several of the service providers with respect to what we can do. Staff has been working with the service providers to determine what the best practices should be and how we should go about accomplishing them. We will continue to do that. We'll work through our problems together, and at the end of the day, we will ensure that we have the front-line services available to victims of violence.

ORPHANED WILDLIFE
REHABILITATION SOCIETY FUNDING

V. Huntington: Yesterday I was advised that Delta's Orphaned Wildlife Rehabilitation Society, known to everyone in this House as OWLS, was refused funding. This internationally recognized organization provides rigorous volunteer training for youth at risk. Its education program reaches thousands of students. It is certified by Thompson Rivers University for its vet technician practicums.

Would the Minister of Housing and Social Development please tell the people of Delta and this province why OWLS doesn't fit his own priorities for funding?

[1410]

Hon. R. Coleman: As I've said previously in this House, this year, with the community gaming grants, we had to set some priorities. As we set those priorities, some categories had to be either reduced or eliminated.

On the side of environment, which this category of application would have fallen into in this quarter, the only applications under environment being funded are bingo affiliations or three-year commitments.

V. Huntington: Delta has Canada's highest concentration of raptors. The OWLS flight cages are across a ditch from the Boundary Bay raptor management area. The government uses the OWLS 24-hour call-out line, its officers use OWLS volunteers for rescues, and it places seized and injured raptors in OWLS's care.

I'd like to ask the Minister of Environment: will he exercise his duty to the wildlife of this province and ensure that OWLS receives funding so that it can get on with the job of saving B.C.'s injured birds of prey?

Hon. R. Coleman: Difficult decisions were made on the grant program. There will be food banks funded this year at a higher level than perhaps in the past. There will be some other social programs. We decided to protect the things like public safety with regards to search and rescue and meals for children in school. As a result of that, we didn't have enough money for every category.

The reality is…

Interjections.

Mr. Speaker: Members.

Hon. R. Coleman: …these are annually applied-for grants that are taken on their merit on any given year, and there's no guarantee of funding from year to year. What we've done is make the right choices on behalf of the children of British Columbia.

MINING EXPLORATION PERMIT
IN FLATHEAD VALLEY AREA

R. Fleming: The United Nations has sent a mission here on a fact-finding expedition to assess threats to the Flathead River Valley. They're conducting their work this week.

The question that is on the minds of people in that region and the fact-finding mission itself is: will the provincial government — will the province — make it possible for the Canadian government to respect its commitments that are contained under the world heritage convention by agreeing to finally protect the Flathead River Valley, which is adjacent to the Glacier World Heritage Site?

My question for the Minister of State for Mining, in addition, is: will his government…? Will he in this House, in the spirit of transparency, table documents related to the approval of Max Resource Corp.'s mining exploration permits today?

Hon. B. Penner: I would gladly compare British Columbia's environmental record to that of Montana's any day of the week. In fact, maybe the member missed it, but just this morning I introduced legislation that…

Interjections.

Mr. Speaker: Members.

Hon. B. Penner: …I hope the House will approve, which will establish even more protected areas in British Columbia, including a new class A provincial park in the Okanagan.
[ Page 806 ]

If that bill passes, we will have established 58 new parks, 143 new conservancies and one new ecological reserve, representing 1.9 million hectares of additional protected area in British Columbia since 2001.

Interjections.

Mr. Speaker: Members. Members.

RELEASE OF REPORT
ON OUTBREAK AT NANAIMO HOSPITAL

A. Dix: Freedom-of-information documents show that the Vancouver Island Health Authority, for corporate and political reasons, withheld a damning report of the B.C. Centre for Disease Control about the C. difficile outbreak at Nanaimo Regional Hospital for ten months.

I would like to ask the Minister of Health whether cabinet ministers, including the former Minister of Health, also received a copy of that report in August or September of 2008. And did they approve of the decision to withhold the release of that report until after the May 12, 2009, provincial election?

[1415]

Hon. K. Falcon: Well, actually, the allegation and the basis of that allegation are false. The fact of the matter is that the Vancouver Island Health Authority obeyed the law that is clearly spelled out under the freedom of information and personal privacy act. If the member is alleging that that wasn't the case or in fact, indeed, if anyone is alleging that that wasn't the case, there is an appeal mechanism available under FOI. I would encourage them to follow through on that.

Mr. Speaker: Member has a supplemental.

A. Dix: I think the Minister of Health is stuck in the same parallel universe as the Minister of Education. They receive a report on an important public issue in Nanaimo — a damning report, an independent report. They stick it in a drawer for ten months. They don't show it to the public.

It's something of interest to everybody who works in that hospital, everyone who goes to that hospital. It's not about the Freedom of Information and Privacy Act. What those documents show is that the only consideration of the government, of the B.C. Liberal government, was political — their political and corporate interests.

Why did the government put this report in a drawer? Why did it hide it from the public for ten months? That's the question.

Hon. K. Falcon: To borrow from the previous Minister of Health, it doesn't take long for this member to climb the grassy knoll and engage in one of his massive conspiracy theories. Sadly, it is backed up by everything but fact. It is backed up by everything but fact. The fact of the matter is that…

Interjections.

Mr. Speaker: Members.

Hon. K. Falcon: …the Vancouver Island Health Authority undertook two reviews, a review by their medical health officer and a second review that was undertaken by the B.C. Centre for Disease Control. Both those reports came in at different times in the new year.

Interjection.

Hon. K. Falcon: Mr. Speaker, I recognize it doesn't fit into this member's particular political calendar. I apologize to the member that it's not working for that member's political calendar.

But the fact of the matter is that both those reports were presented to the executive, presented to the board, and the board reported out on them.

D. Routley: This minister's response is irresponsible. It is an insult to the people of B.C.

That outbreak killed three people. It infected 90 people. Many of them were my constituents, and they had a right to know. This government, whose access to information has been condemned roundly as a failure of the public interest, suppressed that information from the people we all serve.

It's not up to them to decide the political expediency of when we should have information that's vital to public safety and public health. It's up to them to protect the people of B.C. They failed.

So I want to ask this minister: will he stop avoiding difficult questions and difficult truths? Will he do his duty to the people of B.C. and the people of Nanaimo? Why is my community's right to know secondary to this government's right to protect its political interest?

Hon. K. Falcon: It's just classic for that member to make completely baseless allegations, to try and make allegations against professionals that every day are working to provide a top-level quality of service.

You know, I just wish that for once, before the member opposite starts beaking off with information like that, he actually reads the reports. If he actually read the report from the B.C. Centre for Disease Control, he would know….

Interjections.

Mr. Speaker: Members.
[ Page 807 ]

Hon. K. Falcon: It's your time.

Interjections.

Mr. Speaker: Members. Members.

I would advise the minister, first, to be careful in the language that he uses.

Continue, Minister.

[1420]

Hon. K. Falcon: For the member to make those kinds of allegations against professionals that work in the system, who do an outstanding job every day, is outrageous.

The fact of the matter is that if the member had read the report, the member would know that one of the things that is apparent nationally and internationally is that the C. diff outbreak….

Mr. Speaker: Thank you, Minister.

[End of question period.]

Tabling Documents

Hon. M. de Jong: I table the British Columbia Ferry Commission annual report for the fiscal year ending March 31, 2009.

Orders of the Day

Hon. M. de Jong: I call in this chamber committee stage debate on Bill 2, Budget Measures Implementation Act (No. 2), and in Committee A, Committee of Supply — for the information of members, continued debate on the estimates of the Ministry of Forests and Range.

Committee of the Whole House

BILL 2 — BUDGET MEASURES
IMPLEMENTATION ACT (No. 2), 2009

The House in Committee of the Whole (Section B) on Bill 2; C. Trevena in the chair.

The committee met at 2:25 p.m.

On section 1.

B. Ralston: This section proposes an amendment to the Balanced Budget and Ministerial Accountability Act. This section was amended within the year. It proposes to substitute the authorization to project a deficit in the main accounts of the province from "2009-2010 fiscal year and the 2010-2011 fiscal year" and substitute "2009-2010 to 2012-2013 fiscal years."

Can the minister explain why he's any more confident that this projection is a reasonable one, given his profound and deep assurances when the legislation was most recently amended that indeed that was what was required?

Hon. C. Hansen: Hon. Chair, you know, it's true. I think in February, if I had been asked, I would have been very confident that we would have been able to get this province back into a surplus position within the two years that we had allocated in the previous amendment. We have certainly relied on the best expert advice that we can seek from not only our Economic Forecast Council but the other financial indicators that we rely on as we build our budgets.

This has truly been an absolutely unprecedented year in terms of the volatility of the global economy and the subsequent impact that has had on the province of British Columbia and our revenue projections. As we have put our budget projections together for this coming five-year cycle, which is outlined in the budget documents, we again have relied on the best advice we can get. But nobody has a crystal ball. There are certainly those economists who are predicting that there is at least the potential of a double dip in the global economy, even though we're starting to see some signs of the economic recession starting to bottom out at least, or at least be approaching the bottom.

I guess the short answer to his question is that there is nobody who can give him or any of us 100 percent assurance that we would not see significant further deterioration, but all of the indicators are that the budget plan we've put forward is a responsible one. We've built extra prudence into that budget and made some very conservative estimates of budget revenues going forward. We have every expectation that we will be able to once again deliver a surplus budget within the time frame that's set out in this amendment.

B. Ralston: In Ottawa in the federal budget, the federal Finance Minister made a similar prediction about the year in which the federal deficit would be retired. I believe it's 2015.

The independent budget officer is an office that exists in Ottawa. An attempt by myself to raise that issue here as an issue for discussion and consideration by the government has been rebuffed by the minister. But what that independent budget officer did say was that in his independent examination, the government's projected date for retiring the deficit was erroneous.

Again, what assurance does the minister give — beyond a bit of by guess and by golly, given the track record over the last 18 months — that indeed this fiscal year 2012-2013 is accurate?

The difficulty with this legislation is that it appears to require constant revision. It engages all the mechanisms of the Legislature in an exercise which is really not
[ Page 808 ]
terribly productive, because it simply takes time to confirm a change in legislation when circumstances change. Will the minister consider revisions to this legislation that are more accurate, in the sense that they consider that there is a budget cycle and that occasionally, in the course of the business cycle, governments will go into deficit despite the best efforts of governments of any political stripe?

Hon. C. Hansen: What we've seen in terms of the global economy over the last 12 months has been certainly unprecedented in our lifetimes, and the balanced-budget legislation as we had established it, I believe, serves this province well in virtually all times — this year being an exception because of the impact of what has been an unprecedented global recession.

[1430]

I believe that governments need to put a high value on balanced budgets, to ensure that we don't pass forward the debts of today onto the backs of the children and grandchildren yet unborn. With the exception of these very, very unusual economic times, this is the kind of approach to legislation that serves the province well.

B. Ralston: Again, back to this proposed amendment. Does the minister really think that his government would behave differently, in terms of endeavouring to keep the deficit to a minimum, if this legislation did not exist? Isn't it more the case that this legislation exists for purely rhetorical and political purposes than serving any function in guiding government operations?

Hon. C. Hansen: I believe that governments should run deficits in only the most unusual of times, and we are certainly in very unusual times, given the global economic recession that we've seen over the last 12 months.

But as I pointed out in February, when we came before this House with the first amendment to this legislation that was proposed at that time, I believe that if governments are going to run deficits, they should actually come before this chamber and ask for this chamber's authority to run deficits; that if it were not for this legislation being in place, then governments would be able to run deficits without having the specific and time-limited consent of this chamber. That is the principle that I think is important to uphold.

B. Ralston: I hate to disagree with the minister, but surely the budget document itself is the vote that gives the government the authority to run a deficit or a surplus, and surely that's the paramount process. This is a secondary piece of legislation that offers rhetorical guidance to the process. But is not control of supply — since, I think, the Magna Carta forward — the prerogative of the assembly or the parliament? That's the ultimate authority on whether the government runs a deficit or not.

I don't quite understand how this particular legislation — given that it's obviously capable of and susceptible to legislative change; it's been changed now twice in a year — really adds to the process. Is it not the prerogative of the assembly to decide, the ultimate decision of the assembly in passing a budget, whether there's a deficit or not?

Hon. C. Hansen: I think both legislative requirements are important.

B. Ralston: I suppose the minister is not going to answer my question on that point. Given that this legislation has now been changed twice in a year, the minister is expressing an understandable amount of caution about whether or not the inherent prediction in this legislation that the government will return to a surplus by the budget year 2012-2013 is contained in this legislation. He's expressing skepticism.

What is the point of the legislation — given that it's subject to change, it's unreliable and the minister himself is expressing a great deal of caution about it? What purpose does it serve, beyond rhetorical and political ones so that the government can wave it around and talk the language of avoiding deficits when the government has now run the two biggest deficits in the history of the province in 2003 and this year?

Hon. C. Hansen: As I said earlier, I think that if governments find it necessary to run deficits because of very unusual global economic circumstances which are beyond the control of a provincial government, it's incumbent upon them to come before this chamber and seek the specific permission of this chamber for those deficits.

B. Ralston: The minister mentions the best advice available in crafting this amendment. So can he specify…? I understand that the forecast council….

[1435]

I haven't had a chance to review the comments on the forecast council that are contained in the Enns report, which was released by the minister about two hours ago, but it came to my attention just after noon today. I wasn't afforded the opportunity of an advance notice that it was being released today, but we'll leave that aside.

Given the comments about the forecast council in the report, can the minister advise — when he says that the best advice of experts in crafting this amendment was consulted — who he consulted on this prediction that's contained in this amendment?

Hon. C. Hansen: Just to correct the record, actually I tabled the Enns report in this chamber at ten o'clock this morning.
[ Page 809 ]

The ministry, first of all, has some excellent internal staff who do modelling and projections around revenues based on information they collect from a variety of sources. I think we are very well served by the ministry staff.

I think one of the things that is pointed out in the budget review panel, both in 1999…. Their express view in the 1999 report was that the process of developing budgets needed to rely on that independent advice and should not be manipulated by the politicians. Certainly, we have entrenched those principles as a government, and we rely on that information that we get. The officials in the ministry, in turn, rely on a variety of sources, including the Economic Forecast Council as one of those sources.

B. Ralston: In crafting this amendment, the minister mentions the forecast council and speaks of the forecast council. But isn't there another way of manipulating — to use the minister's word — the results of the forecast council? That is by refusing to meet with them when they wish to meet with you to convey different information from that which they have previously conveyed a short time ago. Isn't that the process that the minister engaged in prior to the February budget?

Hon. C. Hansen: I know the member has said that on several occasions, and I will tell the member right now that that is categorically false. I have never once, as the Minister of Finance, refused to meet with the Economic Forecast Council. Every time they have requested a meeting, I have met with them.

B. Ralston: In crafting this amendment, has the minister relied entirely on the forecast council or on any other advice?

Hon. C. Hansen: I will repeat what I have now already said two times in the very short course of this debate. The ministry staff rely on a variety of sources of information, one of which is the Economic Forecast Council.

Some of the other sources that I could point to, for example, would be…. As the Ministry of Energy, Mines and Petroleum Resources does a forecast in terms of what natural gas pricing will look at, they actually look at about 25 separate indicators that are private sector forecasts that the private sector itself uses when buying future contracts for future delivery of natural gas. So that is a very good private sector–driven indicator in terms of what natural gas pricing may be next year, the year after or the year after that.

It's not always accurate, as we have seen this year. We have seen natural gas, just since the end of May…. Instead of climbing, as many forecasters were anticipating, it actually took a very sharp dive in price which, of course, had some significant impacts on our budget revenues.

There is a multitude of different pieces of information that we use in developing our revenue projections over the course of either the three-year fiscal plan or, in this case, the five-year outlook that we have put in the budget, which shows how we will return to a surplus within the five years.

Section 1 approved on division.

On section 2.

B. Ralston: This section amends the process by which the ministerial portion of pay that members get…. Obviously, ministers are paid more than ordinary members, and there's a separate remuneration for the ministerial portion of ministers' salary. This makes some changes to that.

[1440]

Can the minister explain what the effect of this amendment is and what impact this will have on the salaries of his colleagues in cabinet, if any?

Hon. C. Hansen: The effect will be exactly the same as the policy and requirements that we have followed to date. So if you go back to the original intent of the Balanced Budget and Ministerial Accountability Act, it was that ministers had to ensure that they were spending within their ministries within approved allocations of funding.

We've seen lots of examples from previous decades where ministers overspent their approved allocations, and we felt there should be a penalty that would be imposed on the minister. In this case, it would be that all ministers have a 20 percent holdback on their ministerial salaries, and they will only get half of that returned if government as a whole ends a fiscal year with a surplus or a balanced budget.

Ministers over this four-year period will, in fact, lose that half of their 20 percent holdback because we are not projecting that there will be a surplus at the end of those fiscal years. If by chance we can actually get back to surplus faster, then they would obviously get that half of the holdback returned. But in the case of the other half of the holdback, it is to ensure that there is a responsibility and an onus put on the ministers to ensure that they stay within their appropriation.

In the past what we have done is reflect the appropriation in the main estimates. If through other approvals the minister gets the consent within the framework of appropriations that have been approved by this chamber, then they should still have the obligation to ensure that they don't overspend those appropriations.

But for government, every time there is a supplemental estimate, to come in and do a specific amendment was not in keeping with the original spirit of the act. The original spirit of the act was to make sure that the incentive was there, not so that ministers had to stay
[ Page 810 ]
within the estimates as tabled with the spring budget, but to stay within what had been approved in accordance with votes that flow from this chamber.

B. Ralston: Perhaps the minister can just help me then. I had understood that the process of supplementary estimates was no longer going to be followed, and that the ministry was going to rely on contingencies to deal with unexpected and unforeseen overruns in budgets, such as a firefighting budget.

Traditionally in the past, the way in which this section was dealt with was to bring before the chamber a number of supplementary estimates, adjust the budget of individual ministries accordingly and deem that the minister had therefore spent within the allocated limit by virtue of the fact that the supplementary estimate boosted the budget for that ministry. No individual minister ever suffered a financial penalty because the supplementary estimate process wiped that away.

So given that change, at least as I understand it, perhaps the minister can guide me through it and make sure that I've understood it correctly.

Hon. C. Hansen: What this amendment will provide for is that ministers are still required to stay within appropriations that have the authority to this House and to votes in this chamber. If they exceed that and they end the year and it shows that their ministry has spent more than has been formally approved, then they will not receive the remaining half of that holdback after public accounts are tabled.

So this provides for appropriations, approvals that would flow as a result of the main estimates. It would be approvals that would flow as a result of any supplemental estimates which — while we have no intention of bringing in supplemental estimates at this point; there are none planned — they would still technically be authorized or available to government until such time as we are back into surplus again.

[1445]

The third area where funds can be appropriated or provided for, for a minister would be through contingencies. That's a perfectly appropriate way for governments to allocate funds that may be over and above what had been anticipated.

Then the fourth area is with regard to statutory authority. So in areas such as the emergency programs or forest fire fighting, for example, there is approval that flows from votes that have been taken in this chamber to provide for the necessary spending authority in the case of those statutory appropriations.

B. Ralston: Again, just so that I understand this. The example of the Ministry of Forests and Range is a good one. Typically, despite the attempt to estimate what the forest-fire-fighting budget might be in any given year, this year was a very dramatic overrun of that budget, obviously, given the fire conditions that were out there. How that has been dealt with in the past is through the process of supplementary estimates, as I understand it. That's the way it came before the chamber, as I understand it.

The minister now refers to statutory authority. So in the example that I've given to the Minister of Forests and Range, the statutory authority would be what — as opposed to a supplementary estimate?

Hon. C. Hansen: To correct the impression that the member has, in the case of forest-fire-fighting budgets, that is not provided through supplemental estimates. We recognize — and it's the principle that was…. It was approved by this House when the statutory authority was provided. When a forest fire breaks out, we have to go in and fight it, especially if it's obviously threatening communities or people or significant infrastructure.

The legislation provides the authority for government to spend what is necessary to fight forest fires, and it does not require a specific appropriation, either through main estimates or through supplemental estimates.

B. Ralston: Just again on this section. Is the minister aware at this point — given that in the unusual circumstances of this year being an election year, we're well along in the budget year for which we're proposing the budget as opposed to the process that's ordinarily followed where the budget is adopted in the spring — of any likelihood that any individual minister will be seeking authority to bring supplementary estimates before the House?

Hon. C. Hansen: No.

Section 2 approved.

On section 3.

B. Ralston: This is an amendment to section 6 of the Balanced Budget and Ministerial Accountability Act, which adds a new subsection, (1.2), and that's referred to in the section we just passed. Can the minister describe the effect of making this amendment by adding this subsection?

Hon. C. Hansen: This amendment is just in the interest of more transparency and accountability. It's actually interesting. We were discussing this on the date that the budget review panel report was tabled. While this isn't sort of something specific from the panel's deliberations, it's certainly in keeping with the kinds of recommendations that come from the panel.

This does provide that if there is supplementary estimates used at any time in the future, along with the
[ Page 811 ]
tabling of that legislation, we need to provide for a statement of the revised minister's accountabilities that would hence be the target that the minister would have to stay within if the supplemental estimates were approved.

Section 3 approved.

On section 4.

B. Ralston: The minister explained this in his introduction at second reading — that this was to accommodate the Olympics. I'm sure there'll be some public interest and certainly interest among members.

[1450]

Working back, then, when would be the proposed date of the Speech from the Throne? I understand that the minister also mentioned that he expected there would be an opportunity to deal with the budget briefly in March, and then there would be a further adjournment of the House to accommodate the Paralympic Games.

In the interests of informing members of the House and those members of the public who might be interested, how does this then look as a timetable for the conduct of the main government business in the spring — the Speech from the Throne and the budget debate?

Hon. C. Hansen: The only one I can speak to is the budget date itself, which is what's reflected in this particular amendment. Through the Government House Leader or the Premier, I'm sure there will be appropriate decisions made regarding the date of the throne speech and with regard to the spring sitting dates and the spring sitting calendar.

Section 4 approved.

On section 5.

B. Ralston: This is an amendment proposed to section 10. This amendment changes the date on which the quarterly report can be tabled. Is there any wish or appetite, given the timetable that quarterly reports are given, to consider more frequent reporting?

Certainly, in what the minister has described as the unusual circumstances of the last year, it's my view that the public, in the budget process and an ability to understand declines in government revenue, would have been assisted by more frequent reporting. As I understand it, in the Parliament of Canada the Department of Finance reports monthly. Is there any appetite on the part of the minister or his ministry to consider more frequent reporting?

Hon. C. Hansen: This amendment actually provides for the authority to table the third quarterly report two days later than would normally have been the deadline for that. So the legislation currently provides for it being tabled not later than February 28. This allows us the additional two days so that it can be tabled along with the budget, which is the normal practice in this House over the last eight years.

There is a considerable amount of work that goes into the preparation of the quarterly reports. I'm sure, as the member appreciates, there is a lot of detail that is pulled together for that report, and it is actually very time-consuming to do that.

At present we certainly feel that the quarterly reports are adequate. I can't say for certain that the Budget Review Panel deliberated on the specific question that the member has asked, but certainly in their report they have not made any recommendations to change what is our current practice.

Section 5 approved.

On section 6.

B. Ralston: As the minister, I'm sure, is aware, and I'm sure he's prepared to answer this question, Mr. Loukidelis, who is the independent Information and Privacy Commissioner, a legislative officer, has provided a letter on these proposed Continuing Care Act amendments. I believe those are in this section and the next section.

He says in his letter dated September 22, 2009…. I know it's addressed to the Minister of Health Services, but I'm assuming the minister is prepared to answer this question. If not, I'd be prepared to stand down briefly for the appropriate staff support, if that's necessary.

Firstly, he's concerned about the broad and vague wording of the provisions of sections 6 and 7 of Bill 2, and we're dealing with section 6 now. "A greater precision is surely possible and desirable."

His second what he describes as his main concern is: "The government is proposing to use these amendments to authorize the collection, use and disclosure of sensitive health and financial information of continuing-care clients and their family members in a way that fails to use an existing statutory vehicle that would enable the necessary flow of information while appropriately protecting privacy."

He goes on at some length to talk about the E-Health (Personal Health Information and Protection of Privacy) Act, which he stresses he's been supportive of.

[1455]

Given the concerns that are raised by the Information Commissioner about the vagueness of the drafting of these sections and his concern that an existing legislative mechanism isn't being used, which would better protect the privacy of those clients of continuing-care services, can the minister respond to the concerns that have been raised by the commissioner?
[ Page 812 ]

Hon. C. Hansen: I know that the Minister of Health Services was going to join us for this portion of the discussion on this act. I think we've got to this section a little bit faster than we had originally anticipated. I guess for a detailed response, I may have to defer to my colleague.

As far as a high-level response, we certainly are anxious to make sure that the privacy issues are properly addressed. This type of provision is in keeping with other initiatives like this which we have undertaken, where we're required to get access to income information from Revenue Canada. It is my understanding that this section has been worded accordingly. For a more detailed response, I may have to wait until the Minister of Health Services is here.

The Chair: If the committee would like, we can wait for five minutes for the Minister of Health Services to arrive, if he's scheduled to arrive.

B. Ralston: Thank you to the Chair for that suggestion. I think it's a matter of sufficient public concern, given that the commissioner thought it appropriate to write this letter, that we, with all due respect to the minister, get a more detailed response. I know he's understandably not prepared to answer that. It's more properly the province of the Health Minister. Perhaps we could stand down and wait for the Health Minister to arrive.

The Chair: The committee will recess for about five minutes until the Minister of Health Services can join us.

The committee recessed from 2:57 p.m. to 2:59 p.m.

[C. Trevena in the chair.]

B. Ralston: I will repeat my question for the benefit of the Minister of Health, who has kindly joined us to deal with this section of the bill. My question is based on the letter that's directed to the Minister of Health Services dated September 22. He expresses a concern about sections 6 and 7. We're dealing with section 6 at the moment. His concerns expressed in his letter were two. First, he was concerned about the broad and vague wording of the provisions. "A greater precision is surely possible and desirable."

[1500]

His second concern, which he describes as his main concern, is:

"The government is proposing to use these amendments to authorize the collection, use and disclosure of sensitive health and financial information of continuing care clients, and their family members, in a way that fails to use an existing statutory vehicle that would enable the necessary flow of information while appropriately protecting privacy."

He's referring there to the E-Health (Personal Health Information and Protection of Privacy) Act.

He stresses that he's been supportive of that act, and his suggestion to the minister and to the government is:

"For these reasons" — I'm quoting from page 3 — "I urge you to withdraw these CCA" — Continuing Care Act — "amendments and instead use the robust, balanced statutory provisions of the E-Health Act, which offer a proper legislative framework for the sharing of personal…information necessary to verify income for subsidy purposes and for minimum reporting requirements."

So given those comments by the commissioner, I'd ask that the Minister of Health Services please respond.

Hon. K. Falcon: The regulation that allows and governs us to undertake the information and gather the information that the member is referring to under section 5 has actually been in place and been part of the continuing-care regulation for many, many years — in fact, probably about a decade. In fact, the information that we are putting in place here actually mirrors what has been under the health insurance act for many decades — probably at least 30 years.

So what we are seeking here is actually just a confirmation of the statutory authority to back up the regulatory authority that's been in place for many, many years. This clarifies that that regulatory authority, which we've been undertaking for many years, is now backed up by the appropriate statutory authority.

I think that was a gap that was identified by the legal drafters, or the legal people, in government. The intent of this legislation is to close that gap and make sure that we are consistent with the exact same method of asking and acquiring that information as we do, as I say, under the Hospital Insurance Act and under other acts, like information required for shelter allowances or for assisted-living spaces too.

B. Ralston: I appreciate the response, but I note in his letter that the commissioner says — and I'm looking at the bottom of page 2…. He seems to be referring to other statutes — I think one of the statutes that the minister is referring to.

"I acknowledge that section 7(1) of the Hospital Insurance Act authorizes the ministry to collect personal information regarding the delivery of acute care services. This provision predates regionalization of the health care system and enactment of the E-Health Act.

"In my view, this provision should be repealed in favour of designating the existing discharge abstract database as a health information act, thus subjecting it to the protections now offered by the E-Health Act."

He goes on to say:

"Section 7(1) of the Hospital Insurance Act should not, in other words, be seen as a precedent that supports the CCA amendments described above."

So while the minister says that he's seeking statutory authority to confirm what has been, I guess, regulatory practice, it would seem that the point of the commissioner is that the E-Health Act has superseded those other acts. He's offering or suggesting that the minister consider making amendments that are consistent with
[ Page 813 ]
the E-Health Act, which seems to me, on the face of it — not having the access to the wide range of capable senior public servant advice that the minister has access to — that that's a reasonable suggestion.

I suppose my concern is that this is the one opportunity that we have here in the Legislature to address these provisions.

[1505]

If they're simply passed, the likelihood or the incentive — in the busy schedule of the minister, the cabinet, the government and the Legislature — that this problem that's identified by the Information Commissioner will ever be addressed, I suppose, is unlikely.

I'd like the minister to consider the mild admonition and suggestion of the Information Commissioner and seriously consider whether he's prepared to entertain amendments that would address the problem that he raises.

Hon. K. Falcon: Obviously, I think it goes without saying, but it's sometimes better to say it — that the privacy and protection of personal information has got to be the utmost concern in the Ministry of Health Services. And it is.

The issue here, where we have a bit of an honest disagreement with the commissioner yet are still willing to work with the commissioner…. The nature of the honest disagreement we have here is the fact that the intent of the e-health legislation is to focus on the databases that are related to the electronic health record.

It was never the intention of the e-health legislation to take all the databases within Health and make them part of that electronic health record. That is something that we have expressed to the commissioner. We've made it clear to the commissioner that we're willing to work with the commissioner, but we have underscored the fact that the E-Health Act was created, as I say, to implement the electronic health record.

It certainly was not the intention, nor would it be appropriate in the view of the considered staff of my Ministry of Health, that every data system which contained health information should be made part of a health information bank.

B. Ralston: Well, surely the focus here should be, as the commissioner has expressed it, on continuing-care clients and their family members. I understand in general terms what the minister is saying, but why wouldn't the provisions of the E-Health Act be brought into operation to protect the privacy in the way that the person who knows a lot about it and is delegated and asked as an independent officer of the Legislature to provide guidance on it…? Why wouldn't we simply follow that advice?

I note in the E-Health Act at section 4: "A designation order may authorize the collection and use of personal health information only for one or more of the following purposes…(c) to identify a person who is providing health services; (d) to prevent or manage chronic conditions, at the individual or population level; (e) to facilitate…." It goes on.

There are a number of categories. Continuing-care clients would seem to fall broadly within 4(a) probably.

Then: "(a)…an individual who needs or is receiving health services." It would seem to me that that falls within the potential ambit of the E-Health Act. I'm not quite sure why the minister would resist on this point.

Hon. K. Falcon: Ever since the Continuing Care Act was brought into place in 1997, this has been the practice that has been undertaken in the Ministry of Health through, actually, governments — not just our own but previous governments.

[1510]

One of the reasons why the family members are mentioned in there is that in order for the government to (1) determine eligibility and (2) determine what the individual should be paying, they often need to determine whether, for example, the individual is being looked after by family members currently. Or is it a situation where family members live 5,000 miles away?

All of that kind of information, which we have been utilizing and have been since 1997 when the Continuing Care Act came into place, is information that — in the case of the legislative changes being proposed here — will be statutorily backed up.

That really is the issue here. The regulatory authority has always provided us the ability to do this, but the legal drafters determined that there's a gap between the statutory authority and the regulatory authority. This closes that gap.

To the issue of the Information and Privacy Commissioner. Certainly, we always have to listen carefully to what the Information and Privacy Commissioner is suggesting. But the suggestion that the commissioner is making — that all of this information should form part of the e-health legislation….

In the view of the professional civil servants within the ministry, that is not viewed to be practical. Nor is it viewed to be consistent with the past practices that have taken place, as I say, since this legislation came into effect — and indeed prior to that. We will continue to work with the commissioner and let the commissioner know that we have a sincere but honest disagreement about the direction he wishes to go.

The member is correct to point out that the letter we received was on September 22. Obviously, that is not necessarily time for us to conclude and continue the discussions we need to have, because they are important discussions for the purposes of the Ministry of Health Services.
[ Page 814 ]

B. Ralston: Again referring to the letter, page 2, he says: "On February 27, 2009, a ministerial directive was issued by your predecessor" — the Hon., and then he gives the name of the Health Minister — "compelling health authorities to disclose this personal health information in individually identifiable form. It is apparent that the CCA amendments are intended to authorize this indirect collection of personal health information by the ministry and, thus, supersede the ministerial directive, the statutory authority for which is not apparent."

That seems to be a relatively serious suggestion. I'm wondering if the minister might take the advice of the senior public servants who are there and respond to that suggestion, which is troubling.

[1515]

Hon. K. Falcon: The member is correct that the former Health Minister did indeed send a directive to the health authorities setting out minimum reporting requirements. That was as a direct result of a report that was undertaken by the Auditor General on the home and community care sector. The recommendation of the Auditor General was that the ministry should do exactly that — have minimum reporting requirements that are available to the Ministry of Health. The directive was sent out in that regard.

Obviously, we have, on the one hand, the Auditor General making it quite clear what he expects from the Ministry of Health Services. We've got the Privacy Commissioner, another independent statutory authority of the Legislature, who has a different view. So this is not an easy issue, but it is one that we are attempting to work out.

In this case, what I can assure the member of is that what we are putting in place is nothing new. We are actually going to continue doing exactly what we have done. In fact, I can tell the member with some confidence that in the decades that we have undertaken this procedure of dealing with this information, we've not had a complaint that I am aware of.

We will continue to ensure that we look after that information in a manner that is respectful of people's privacy while, at the same time, working through some of the competing demands of different officers of the Legislature.

B. Ralston: I appreciate the minister's point about reconciling competing interests, but I would respectfully suggest that the next paragraph in the letter endeavours to reconcile the need of health authorities to have information to support evaluation and planning, yet offer protection for personally identifiable health information. Indeed, that's what he says in the letter.

"Information is needed in order to support evaluation and planning, including as regards continuing care services, but I am concerned that the minimum reporting requirements, supported either by the ministerial directive or the CCA amendments, would compel disclosure of personally identifiable health information without the protections offered by the E-Health Act.

"I strongly believe the E-Health Act, not CCA amendments or ministerial directive, should be used to acquire personal health information for planning and evaluation purposes. The privacy and transparency afforded by the E-Health Act are needed here as well.

"Further, as I've previously told ministry officials, personal health information acquired for planning purposes should be provided in linkable form and de-identified, thus reducing privacy risks while still enabling planning and evaluation activities."

That would appear, in my view, to address the concern that the minister raises about conflicting directions being raised by two separate independent officers.

He also goes on to say:

"The ministry is, by pursuing these CCA amendments, resorting in a piecemeal approach that avoids the transparency and privacy protections offered to the E-Health Act. It may be argued that designation of health information banks is complex" — I think that's the argument the minister was making — "but no evidence to support such a claim has ever been offered. The tools are there under the E-Health Act, and I would urge you to ensure they are used, rather than the expedient of piecemeal amendments to other statutes."

That's fairly self-explanatory.

Again, I'd invite the minister's comment. These sections of the letter appear to address the concern that the minister raises.

Hon. K. Falcon: The member opposite is right to recognize those concerns that were identified in the September 22 letter, but I can't underscore more that we have a real fundamental concern with the recommendation that the freedom-of-information commissioner is suggesting.

The intent of the e-health legislation, as I say, was to focus on databases that were related to the electronic health record. This was never the intention to try and incorporate every other database in the Ministry of Health Services.

I would say to the member that this is not a problem that I can tell you I am willing to fix on the floor of this Legislature, because I do believe there's an important principle here that we have to make clear to the Information Commissioner. We may ultimately end up agreeing to disagree, but nevertheless we are not willing, certainly at this time, to make a decision to include it as part of the e-health legislation, which was never contemplated to include other databases — including the ones of which we speak.

[1520]

B. Ralston: Again to turn to the letter, it would seem — and the minister can correct me if I'm wrong — that the kind of information that's being gathered is information that would augment the personal health record, if I'm not mistaken. But the minister can correct me if I'm wrong.

I'm reading again from the letter: "I'm aware that the ministry has been collecting clinical information of individual continuing-care clients of health authorities in identifiable form, including information disclosing their
[ Page 815 ]
medications, medical diagnoses and cognitive states, for the purposes of program monitoring and performance evaluation."

His concern is that that should engage the e-health privacy provisions. Subject to the minister's comment, it would seem that that would form part of the individual continuing-care patient's personal health record.

I'm not quite sure why the minister is making the objection he does that this was not intended to be included when the e-health legislation was passed. When I look at the E-Health Act and review it, it's certainly very, very broad. In section 4, as to what a designation order might apply to, there are, I think, over 20 areas within the system where it's possible to make a designation order authorizing the collection and use of personal health information.

Perhaps the minister could respond to those comments.

Hon. K. Falcon: I do think it is important to recognize the kind of information that is being asked for here. It's information of a financial nature to determine income levels of the individuals so that the appropriate rate can be applied to those individuals. We fundamentally disagree that that kind of private, personal financial information should form part of your personal health record. We just fundamentally disagree with the commissioner with that regard.

Remember what the e-health legislation was all about. That was making sure that doctors would have access to your personal health record so that it would be easier for them, when you're visiting different hospital rooms or different doctors' offices or what have you, to have access to your personal health record. It is not there to allow them to have access to your personal financial information.

We just have a fundamental point of departure here with the freedom-of-information and privacy commissioner. We will continue to work with the commissioner, but we're not prepared to go along with his recommendation that this information should form part of your personal health record.

B. Ralston: The minister mentions personal financial information. What the commissioner says here is — and I'll repeat it: "I am aware the ministry has been collecting clinical information of individual continuing-care clients of health authorities in identifiable form, including information disclosing their medications, medical diagnoses and cognitive states, for the purposes of program monitoring and performance evaluation."

Is the minister saying that the commissioner is wrong — that that information is not being collected, because he refers only to financial information? This is what is in the letter that the commissioner has prepared and provided to the minister. I want to clarify that. Is the commissioner wrong that information in that form is not being collected by the ministry?

Hon. K. Falcon: No, I wouldn't say that the commissioner is wrong, but I would say that the commissioner…. We believe we need to be able to provide him with the information to understand that we have data-sharing agreements in place with each of the health authorities that very specifically define the collection, transmission and use of personal information.

I would remind the member that this is actually a function and a process that has been in place since, in fact, the Continuing Care Act came into place in 1997 — without complaint, I might add. In fact, prior to the Continuing Care Act, there was also a similar transmission of information.

[1525]

I think that at the end of the day, we'll continue to work with the commissioner, but we do have a disagreement with the commissioner in terms of his recommendation in this regard.

B. Ralston: Just so I'm clear. I'm not sure if the Minister of Health has had a chance to meet with the commissioner yet, given that it's only a couple of days ago. That may not be the case, and that's understandable.

I'm going back again to his letter — because the minister seems to be focused on financial information — on the first page, where he expresses his main concern as: "The government is proposing, through these amendments, to authorize the collection, use and disclosure of sensitive health and financial information of continuing-care clients and their family members."

Is the minister's position that these amendments are only to facilitate the collection of financial information and that there's no collection of health information? That certainly seems to be contrary to what is being said here. He offers a ready-made solution, the legislative solution that exists, and is recommending it to the minister. Is that what the minister is saying — that he is content with what the commissioner describes as piecemeal amendments, since it is only financial information that's being collected?

Hon. K. Falcon: Member, in addition to financial information, of course there is medical medication information, etc., that would need to be gathered to make the appropriate assessment for the individual. That is a practice that has been carried on for many, many, many years in British Columbia.

In terms of meeting with the freedom-of-information commissioner or staff, I can assure the member that not only have meetings taken place; there was a meeting that took place as recently as yesterday. There are further meetings that are scheduled as early as tomorrow, and that will continue. Our staff will, and always does, try to work with the Information Commissioner to ensure we are doing everything we can to protect the privacy of individuals.
[ Page 816 ]

Again, I want to emphasize that what we are doing here is actually just confirming the statutory authority behind a regulatory authority that has been in place for many, many years in this province — with, I would argue, very great success and without complaint.

B. Ralston: Well, I'm going to conclude shortly on this area, because I think we've had a good exchange on this problem.

It seems to me that the minister seems to be unwilling to acknowledge or at least agree, perhaps, with the point the commissioner is making that whatever past practices have been, it has certainly been superseded by more elevated concerns about privacy and by the fact that the E-Health Act and that legislative mechanism exist to balance the concerns he raises.

I'm sure there will be further discussions, and I'd invite the minister — if he should change his mind or, as a result of discussions, come to agree with the commissioner — that the appropriate amendments come back before the House, if that's required or, if it can be done by regulation under the E-Health Act, that that be done expeditiously.

Perhaps on that point I'll conclude on section 6.

Section 6 approved on division.

On section 7.

B. Ralston: Just for the record, we had discussion on the previous section, so I won't ask any further questions. But my comment and objection remain the same.

Section 7 approved on division.

On section 8.

B. Ralston: Can the minister confirm that this amendment is an amendment of the section that was amended just several months ago?

[1530]

L. Reid in the chair.]

Hon. C. Hansen: It is simply an amendment to the section that was amended in February, to give the member a direct answer.

Section 8 approved on division.

On section 9.

B. Ralston: This proposed amendment amends the Financial Administration Act to authorize private members on the government side to sit as members of Treasury Board. Perhaps the minister can clarify for me, because I understand that the practice in the past has been that private members have sat as members of the Treasury Board, both with this government and with previous ones.

Is the purpose of the amendment to authorize those members to be members of Treasury Board as voting members? Is that the purpose of the amendment?

Hon. C. Hansen: Yes, it is.

B. Ralston: Can the minister explain why that's necessary, given that the practice in the past was that private members sat as members of the Treasury Board and presumably had voice but no vote — provided input, participated in the discussion. Why was it felt necessary to formally authorize them to be able to vote?

I suppose my concern — I think I expressed this at second reading — is that while individual ministers are accountable through the legislative process and through question period and estimates, although not necessarily as members of Treasury Board per se, a private member doesn't…. There's not the same level of accountability, since there's no mechanism to question them.

It does appear to be a little bit anomalous in terms of accountability. Can the minister comment on that, please?

Hon. C. Hansen: Private members have participated in Treasury Board over the last number of years, and because they were not full members, one might say, the member is correct. They would not have a vote, but they would also not be able to be considered in making sure that quorum was present at a meeting, for example.

Members of Treasury Board who are members of executive council are accountable to this chamber in their specific ministerial roles, but they are not accountable to this chamber as a result of their participation in Treasury Board. That accountability is through the Minister of Finance, who chairs Treasury Board.

[1535]

B. Ralston: Is the purpose, then, to accommodate the more bureaucratic requirement, I suppose, of making it easier to attain quorum? As I understand, the intent of the legislation is that even if private members were members of Treasury Board and there to enable the quorum to be achieved, the majority of voting members would still have to be members of executive council in order for the Treasury Board to be properly constituted and to be in a position to make decisions.

Hon. C. Hansen: As is currently the case, 50 percent of the members of Treasury Board would constitute a quorum. This would mean that the majority of members of Treasury Board, under this amendment, would have to be members of executive council and 50 percent of the members would constitute a quorum.
[ Page 817 ]

B. Ralston: I'm not sure it's a major point, but then could you be in the situation there where the majority of members present were private members and not cabinet members, and is there any significance to that?

Hon. C. Hansen: Yes, it's possible.

B. Ralston: Obviously, that's a possibility that has been considered by the drafters. I'm not sure that there need be any concern. But is there any concern? Or is that something that is anticipated would be a rarity, given the propensity of the schedulers of cabinet ministers to make sure they get to their meetings?

Hon. C. Hansen: Treasury Board is always well attended by both the private members and by cabinet members, and it is only on rare occasions that quorum becomes an issue.

Section 9 approved.

On section 10.

B. Ralston: Yes, this amendment begins…. I think there are some intervening amendments, but there are a series of amendments which deal with Tourism British Columbia. My colleague the member for Vancouver–West End is here. I believe he would wish to ask some questions related to Tourism B.C. We could deal with them here if the minister is so inclined, or there are subsequent sections 14 and 15. So if the minister is inclined to take the questions now?

Interjection.

B. Ralston: Very well, then.

This section simply deletes Tourism B.C. from the Financial Information Act, so perhaps we'll have the debate little bit later, then, on sections 14 and 15. I know that my colleague is anxious to ask a few questions.

Perhaps I'll sit down, and we can move on.

Section 10 approved.

On section 11.

B. Ralston: Yes, this is an amendment to the Hospital Insurance Act.

Some Hon. Members: That's 12.

B. Ralston: Oh 12. Pardon me. Yes, I skipped over that.

Similarly, this is a housekeeping amendment on the Freedom of Information and Protection of Privacy, deleting Tourism B.C.

I'll sit down, and we can have the vote.

Section 11 approved.

On section 12.

B. Ralston: This is an amendment to the Hospital Insurance Act, section 29(3), to add a paragraph. I'm looking at section 29(3). It talks about "provision for…payment by or on behalf of a beneficiary...." Can the minister explain what the purpose of this amendment is?

Hon. K. Falcon: I can. Actually, what this does, Member, is harmonize and make this act consistent with the Continuing Care Act, the one we just were debating a few minutes back.

The reason is that the Hospital Act…. Many people just consider it to be acute care facilities, but it also includes some residential care facilities that are often associated with the acute care facilities. So what we want to do is make sure that there is consistency so that you haven't got some residential care facilities in the province being governed by sections of the Continuing Care Act and others under the hospital act that are being governed by a different set of standards. So this harmonizes, and the wording you'll see is exactly identical to what is there under the Continuing Care Act.

B. Ralston: Yes, the amendment itself makes no reference to any other act. I have the Continuing Care Act. I hadn't reviewed it with that in mind.

[1540]

But the minister is then saying that this proposed amendment, (a.1), is identical with which section of the Continuing Care Act?

Hon. K. Falcon: I just love reading legislation. The sections under the Hospital Insurance Act, (a.1) and (b.1), cross-reference back with section 6(3)(a), (b) and (c).

B. Ralston: I understand the minister is referring to the Continuing Care Act and says 6(3)(a), (b) and (c). I have a copy of the Continuing Care Act taken from the Legislative website that says it's current to September 16, 2009, which is when I was looking at this act. I don't see that there. Perhaps the minister could explain that.

There's a section 6 called "Fees and charges to clients." There's a subsection (1) and (2), and that's it.

Perhaps the minister could just explain that. Perhaps that's confusion on my part.

Hon. K. Falcon: The member was right. It's section 6 of the Continuing Care Act, the new amendments that we just previously debated, (3)(a), (b), (c), subsections (i) and (ii). Have I got it right? I hope I do.
[ Page 818 ]

B. Ralston: I'm going to need some further guidance from the minister. I'm lost, I'll confess. That's sometimes easy to do, and if the minister's effort was to lose me, he succeeded. But I'm sure that's not the case. I'm not clear what section he's referring to.

[1545]

Hon. K. Falcon: Member, referring, as you were, to the Continuing Care Act…. If you got it off the Web, it would be page 3 of five, under "Fees and charges to clients," section 6. You'll see there's a section (1) and (2) that are identified.

What we did is just debated the additions to that, a few minutes back, that added subsection (3)(a), (b) and (c).

Interjection.

Hon. K. Falcon: Yes, exactly.

What you'll see here under (b.1) is the same language you will see under the previous one, under (3)(c)(ii). In that case, it's exactly the same wording. In (a.1) you will see the same wording reflected in (3)(a), (b) and (c).

B. Ralston: I think I have it now. Then, the comment that's made by the Information and Privacy Commissioner would appear to apply to this proposed amendment as well. Given that the wording is identical, he describes it as broad and vague and makes the objection that it could be designated under the E-Health Act.

Is the minister prepared to acknowledge that, in his discussions with the Information and Privacy Commissioner, this amendment may be the subject of discussion, as well, for the same reasons that he set out in his letter?

Hon. K. Falcon: The member is exactly right. It would certainly be my expectation that this would be engendering the same discussion with the commissioner as we will be having on the previous section.

Section 12 approved on division.

B. Ralston: Perhaps if I could introduce my colleague, who will deal with the next several sections on the issue of Tourism B.C. and its untimely demise.

On section 13.

S. Herbert: I'm here to ask a couple of questions about section 13, the Hotel Room Tax Act.

I wanted to ask the minister. Obviously, this is a big deal — to be eliminating Tourism B.C., which was established in 1996 and is very well-regarded in the industry. Certainly, I'm sure the minister has heard — as has this House, as have the members on our side — the extreme concern from the tourism industry about the elimination of Tourism B.C. — whether it's the Council of Tourism Associations, which has grave concerns about this and is calling, basically, for the re-establishment of an entity pretty much the same as Tourism B.C….

So it's a big deal for this House to be considering, and I think this elimination of Tourism B.C. is one that I look forward to hearing cogent arguments from the minister about — why this was necessary, why the minister believes this was a good thing to do and some facts to back this up.

I'll start this with a question. Why does the minister believe that we should be amending the Hotel Room Tax Act by taking the revenues from Tourism B.C. and just putting them into the general idea of promoting tourism, rather than having it dedicated to Tourism British Columbia?

Hon. K. Krueger: To begin, I'd like to introduce the officials who are with me. On my right is Shauna Brouwer, the ADM of management services for the Ministry of Tourism, Culture and the Arts. On my left is Cheryl Hall, the manager of Crown operations for the ministry.

I thank the member for his question. I'd like to suggest with regard to a lot of discussion about the move of Tourism B.C. into the ministry that we might be best to cover those questions in the estimates debate that's upcoming, but I'll certainly give him an answer to his question.

[1550]

Bill 2 before us contains provisions to ensure that the promotion of tourism is maintained and that responsibility is transferred from Tourism British Columbia to the Minister of Tourism, Culture and the Arts.

The Tourism Act provided the Crown corporation with powers and authorities to promote development and growth in the tourism industry in B.C. The Tourism Act provides the Minister of Tourism, Culture and the Arts with powers to encourage development of the tourism industry, to provide information services for tourists, to promote tourism, to encourage the motion picture industry in British Columbia and to reflect tourism interests in land and resource use and management decisions.

Integrating these powers and authorities is intended to better coordinate the province's tourism marketing initiatives. Amendments are being made to allow for a seamless transition of Tourism British Columbia to MTCA and eventual repeal of the act. Specifically, sections 2(2), 2(4) and 2(5) provide specific reference to board composition. These are to be repealed effective August 14, 2009.

The requirement that the chair is to be recommended by the board is repealed effective August 14, 2009, also.
[ Page 819 ]
The remaining amendments provide for the repeal of the act; the dissolution of Tourism B.C.; and the transfer of its rights, property, assets and obligations to the government effective April 1, 2010.

Several other acts require amendments to integrate Tourism British Columbia into the Ministry of Tourism, Culture and the Arts.

Those are the Financial Information Act, to remove reference to Tourism British Columbia, effective April 1, 2010; the Freedom of Information and Protection of Privacy Act, to remove reference to Tourism British Columbia on the same date, April 1, 2010; the Hotel Room Tax Act, which we're discussing here, to change reference from raising revenue for the purposes of Tourism British Columbia to raising revenue for the purpose of promoting tourism, also effective April 1, 2010; and the Tourism Act, to authorize the minister to sell tourism-related products, advertising, and so on, or to authorize a person or organization to do so, and to establish the prices at which the products and services are sold, also effective April 1, 2010.

The reason that the government made the decision to dissolve the board, repeal the Tourism British Columbia Act and consolidate the human resources and financial resources that were part of Tourism British Columbia was to attain the synergies and the administrative savings that are available in this lead-up time to the Olympics by ensuring that the staff of the ministry and the staff who had been working with Tourism British Columbia would work very closely together, assuring that there were no duplications of effort or duplications of use of financial resources for similar purposes.

Any savings that we thus achieve will be directed to marketing itself. We think this is important to capitalize on the huge opportunities that are presented by hosting the Olympics, coming to us very quickly now.

Our government's focus for years has been on the benefits that can and will accrue to British Columbians and our economy after the Olympics, particularly as a result of the huge marketing opportunity that the Olympics present and the fact that three billion people around the world will be watching the opening ceremonies and much of the Olympics themselves. Our focus for many years in preparation now has been to make sure that we maximize all of those opportunities for British Columbians and our economy after the Olympics.

I think that that covers the member's question on this specific section.

S. Herbert: I'd like to thank the minister for that answer. I find it interesting. A couple of the things that are troubling to me are the discussion of synergies and no duplications. "Oh, we'll get these great savings."

I guess the challenge I have is that I'm wondering — we can, of course, take this further in the estimates process — if there were these problems for the last eight years under this government, why it didn't act sooner if it truly believed that. I don't believe these are the real answers here. There's something else behind this, which we'll get to later in the estimates process.

[1555]

The way I understand it here is the minister, by eliminating Tourism B.C., is going to take the hotel room tax revenue and put it into the general purpose of promoting tourism.

In tough economic times funny things, bizarre things, baffling things are known to happen, as we've seen with governments of all political stripes. I think the elimination of Tourism B.C. is one of those things.

I'm curious if the minister might be able to share with me what qualifies as promoting tourism in terms of where the funding goes.

Hon. K. Krueger: Again, in the interests of time, I'd refer the member to pages 5 and 7 of the Tourism British Columbia's service plan, which refer to the core programs of Tourism British Columbia: attracting more visitors; maximizing growth through partnership marketing, and a number of means are set out there; enhancing world-class visitor experiences; and providing value to stakeholders. All of these programs, 146 of the 147 people who worked for Tourism B.C., their corporate culture and their plans, initiatives and goals are all within the ministry presently, and none of that is lost.

S. Herbert: I understand that basically this money, the minister says, is for attracting visitors. There's a range of things that Tourism B.C. did.

Can the minister assure this House that this funding is dedicated to that task, or is it possible that something can change, a Treasury Board decision could change where that money goes?

Hon. K. Krueger: Again, in the estimates debate we'll be able to go over the ministry's budget. The numbers are set out there. We actually have a very substantial lift in the budget this year focusing particularly on the post-Olympic marketing opportunity. That's a $38.6 million lift. So the sum of $92.6 million is set aside this year for these purposes.

S. Herbert: I wasn't asking what the size of the budget was. I was asking, as many tourism operators are as well, what assurance do they have that this is dedicated funding? When they knew it had to go to Tourism B.C., they knew Tourism B.C. had it. It was theirs. It wouldn't be touched.

[1600]

I'm wondering, now that it's within this ministry for the vaguer vision of promoting tourism — which,
[ Page 820 ]
arguably, could be many things — what assurance do they have that it's dedicated and it can't be touched by Treasury Board to take it to some other pot of money if they so desire?

Hon. K. Krueger: The incoming funds are, of course, managed by the Ministry of Finance. The Minister of Finance and I have, separately and together, met with the Council of Tourism Associations, which the member referenced.

We stand on our record of having increased funding from $25 million per year when we became government to $65 million per year presently and, as I earlier mentioned, a lift in this year as we approach the post-Olympic marketing opportunities. We stand on that record. We certainly intend to continue using the portion of the hotel room tax for the marketing of tourism.

S. Herbert: I hear the minister say he would stand on his record. Unfortunately, when I talk to tourism officials, they say to me that that's not good enough. They need to know that the funding is dedicated, that it's locked in, that they're going to know they're going to get it next year and know that money is the year after, and that they can do that long-term planning.

It's concerning to me that the minister is unable to say that the funding is dedicated, because we all know…. We've seen it happen before with any number of taxes, where originally they're brought in to say, "This is dedicated for this" — as we've seen, for example, with gaming moneys. "This is for community charities." Now we're seeing the government dip into that pot, taking $77 million out for their own purposes, and the charities are very upset because it was supposedly dedicated to them.

I'm wondering: would the minister explain to me why he won't commit and the government won't commit to dedicating the funds as they were before under Tourism B.C.?

Hon. K. Krueger: I'd refer the member to the words of section 13, where the legislative direction is very clear: "...amended by striking out 'for the raising of revenue for the purposes of Tourism British Columbia' and substituting 'for the raising of revenue for the purpose of promoting tourism'." The amendment confers a legislative obligation to promoting marketing with this money.

S. Herbert: Would the minister think that using these funds for, let's say, cost overruns on the trade and convention centre would be seen to be marketing or promoting tourism?

Hon. K. Krueger: The answer is no.

S. Herbert: Okay, so the minister says it feels like an obligation. As we've seen in the past, governments say they have obligations, and they break them. Is this mandatory? Is this mandatory that this go to tourism promotion, as in marketing, or could it be used for other purposes which the government could then claim was about tourism promotion, if at all?

Hon. K. Krueger: It's the former.

[1605]

S. Herbert: So the minister is stating to me that there's no possibility that this money in any sense, if Treasury Board made a different decision, could be taken to use for something else. There's no possibility.

Hon. K. Krueger: It's very clear that the amendment makes the use of this money for the purposes of promotion of tourism a legislative requirement.

S. Herbert: Well, the minister says that. I think promotion of tourism, as it's not defined — as in, who gets to decide what promotion of tourism is except for the minister and, I suppose, the cabinet…. This money, as we've seen in years past with other funds which are supposedly dedicated, has been used for other purposes. They may try to argue that they would be for that purpose — I think of the legal services tax; I think of other taxes as well — but they're not.

I'd like to ask the minister…. If a treasury board decided that promotion of tourism included paying for cost overruns on a project interesting towards tourism — say, cost overruns for the convention centre…. Maybe this minister wouldn't be on that treasury board. Would that legally be possible?

Hon. K. Krueger: The answer is no.

S. Herbert: The minister is telling me that there's no conceivable way the money could be used for a convention centre. Is that correct?

Hon. K. Krueger: That answer is yes.

S. Herbert: That's an interesting one. So it can't be used for cost overruns, because it's just not possible because that wouldn't promote tourism, but it is possible that it could be used for a convention centre. So we're seeing a bit of a cognitive…. The answer is yes, that it could be used for….

Hon. K. Krueger: No, no.

S. Herbert: Okay, maybe the minister could restate his answer to my question.

Hon. K. Krueger: I want to remind the member — I thought I had his agreement when he nodded at me
[ Page 821 ]
across the chamber — that we would cover this matter in detail in estimates, but in his question, he's asking about capital expenses for a building, and we're talking about operating expenses for marketing tourism. The legislative amendment is very clearly worded.

S. Herbert: I believe it's important to cover this piece of where the money is going here, because that's what we're debating here. So I will continue to ask questions about that.

My question to the minister: for example, is it possible that this money could be used for operating expenses of B.C. Place in order to promote tourism?

Hon. K. Krueger: The answer is no.

S. Herbert: Could the minister tell me: are there operating expenses…? Could the minister tell me who decides what classifies as tourism marketing, tourism promotion, within his ministry? Who makes that final call?

Hon. K. Krueger: Presently the interim CEO of Tourism British Columbia is Deputy Minister Lori Wanamaker, who oversees the operation, which is comprised of 146 of the previous 147 employees.

S. Herbert: I assume that decisions your deputy minister makes are cleared with the minister.

Hon. K. Krueger: Not on a day-to-day basis. Ministers set policy, and deputy ministers and their staff implement policy.

[1610]

S. Herbert: I'm curious if the minister is concerned. The words "promoting tourism" are so broad that a future minister might read them a different way or a future government could read them a different way.

Hon. K. Krueger: No.

The Chair: And I would caution the member on the repetitiveness of the question.

S. Herbert: Thank you, hon. Chair.

I am concerned about future possibilities of this. With Tourism B.C., you knew what you got. The funding was dedicated. It had its own independent board of directors who made decisions about where that money went.

Under this change here to the Hotel Room Tax Act, basically this decision will be made by the minister with his colleagues about where that money needs to go, and his deputy minister responds to him, to his direction. So should it come to a time, as we've seen with many other taxes, that the government of the day needs to take some money to fill a hole somewhere else, I am very concerned that this minister and this government may respond that way.

I think back to the words of the member for Oak Bay–Gordon Head and the member for Saanich North and the Islands who made these same arguments when this original bill to introduce Tourism B.C. was enacted, they said very strongly that this needed to be dedicated funding that went to a group independent of government so that government couldn't basically monkey around with the situation.

This section here, section 3.1 with these amendments, is making it so that this can be a political decision and not an industry decision. So I'm wondering, under this section, what kind of direction does the tourism industry have? What kind of ability will they have in terms of deciding where the funding goes, or does this just rest with the minister and his deputy?

Hon. K. Krueger: The authority rests with the minister and his or her deputy. We are creating a minister's council on tourism. It is not completely finalized yet who the members will be, but two or more of them will be former members of the Tourism British Columbia board, which was recently dismissed. I say two or more because two have been approached and two have agreed to serve on the minister's council on tourism.

S. Herbert: I hear the minister state that this will be an advisory council, not a board of directors in terms of they're the ones who make the decisions. They can give advice. They can be listened to, can be ignored. The politics of the day could change the situation. It really is uncertain, when the industry has been calling for certainty, that they know how much money they will get year in and year out. They know how it will be spent because they're involved in deciding how it would be spent, not a political decision on how it would be spent.

I guess I'm curious about what would prevent a future government from deciding that promotion of tourism meant something different than what's currently laid out in the Tourism B.C. service plan.

Hon. K. Krueger: Governments are accountable to the electorate. The electorate includes the taxpayers. The revenues that flow to Tourism British Columbia are from taxpayers. They are tax revenues.

S. Herbert: I'm given to understand from the minister that, basically, it would be up to the voters to say: "Okay, you're not spending the money wisely. You're spending it in a way that it should be for." So you have to turf a government out of office in order to make these changes. I don't see that as the dedicated, consistent funding that the tourism industry is asking for, because it really can
[ Page 822 ]
change as a whim of the day under these changes the government is bringing in.

Can the minister tell me how making it more open for possible changes, whether it's a different minister…. Maybe the minister changes his mind. How can making this more flexible and not consistent, how is that good for marketing tourism to the world?

[1615]

Hon. K. Krueger: Tourism is a tremendously important industry for British Columbia. We think of it as our fourth-largest export industry, using the consideration of exports because it brings in a lot of currencies from outside of our province and outside of Canada.

The numbers spent and how they're spent is subject to legislative scrutiny in the estimates debate. I continue to urge the member to go to the estimates debate, which he and I are scheduling our sequence of debate on, for some of these answers. All expenditures will be listed in public accounts, and that's not what happened under Tourism British Columbia. Tourism British Columbia was a separate Crown corporation. So I'm not sure why the member would think that there'll be less accountability for a ministry than there was for the Crown corporation.

S. Herbert: I have concerns because the industry has concerns because people whose livelihoods rely on the industry have concerns. They knew what they got with Tourism B.C. They don't know what they're going to get year in, year out with the minister being the one who makes the political decisions under tourism promotion.

For example, I've heard people out on the streets talk about it. When they come to me they say: "Our streets are dirty. That's a bad thing for the world population to see." "Oh, it's bad for tourism. We need support to clean up the streets, and that will help us promote tourism."

There is a whole bunch of various ways that government could — and I say could — decide to spin stories to say: "This money is helping promote tourism by being used for patching up potholes so that the streets are safer to drive on. And oh, isn't this great?" And on and on and on. With this legislation, with this change, with this amendment, we've taken out the certainty and opened it up to the winds of politics for governments to make the final political decision.

So my question is: will the hotel room tax continue to be viewable, to be seen by the public — exactly how much is coming in, let's say, on a quarterly basis? Will that continue to be shown as, I'm assuming, a line item within the Tourism budget so that we can see exactly how much came in and where it's going?

Hon. K. Krueger: Under the NDP government — who, of course, were the government of the '90s — the funding of Tourism B.C. was at the whim of Treasury Board.

It was under the B.C. Liberal government since 2001 that a revenue stream was provided as a share of the hotel room tax for tourism promotion. So it's ironic that a member from the NDP would ask a minister from the B.C. Liberal Party that question.

We established this means of funding tourism promotion, and that's what we intend to continue.

S. Herbert: I appreciate the minister's history lesson. He seemed to be defending Tourism B.C. and talked about what a great organization it was. Now they're eliminating Tourism B.C. and eliminating the certainty that was provided to the tourism industry because of Tourism B.C.

In this answer the minister has not answered my question, which is: will the hotel room tax be shown as an individual line so people can see how much has come in and see that all of that will be going to tourism promotion? Will that be viewable?

[1620]

Hon. K. Krueger: Given the wording of this provision of the legislation, it will be incumbent upon the Ministry of Finance to disclose precisely the revenue stream.

S. Herbert: It'll be incumbent. Am I given to believe that that will be legally required and that it will be given out, I guess, on a quarterly basis?

Hon. K. Krueger: Yes, it's a legal requirement, and it'll be published in the budget documents.

S. Herbert: I'm just thinking back to the minister's comments earlier. He seemed to be giving a defence of Tourism B.C. and its dedicated funding. As it was a spirited defence, I'm wondering why he seems to be contradicting himself with the elimination of Tourism B.C.

Hon. K. Krueger: It was actually what the member referred to as a history lesson. He clearly didn't seem to realize that it was this government that created a formal revenue stream for what we have called Tourism British Columbia. That revenue stream remains in place. We've changed the delivery model in order that we consolidate our resources and eliminate any duplication, and we've used the savings for marketing purposes. If the member would like to refer to page 208 of the estimates document, he'll find further illumination.

[H. Bloy in the chair.]

S. Herbert: Am I given to believe that if Treasury Board decided to say that tourism promotion, through a decision, meant something different than what's currently
[ Page 823 ]
discussed as tourism promotion, it could be enacted in such a way that it was funding something which we might not today think of as tourism promotion?

Hon. K. Krueger: If the member will just read the three-line amendment, he'll see that it is much more specific in the new wording, when it says, "raising of revenue for the purpose of promoting tourism," than it was in the previous line: "raising of revenue for the purposes of Tourism British Columbia." The new wording is much less flexible than the previous wording.

S. Herbert: Well, I'm not sure if the minister is understanding the concerns correctly about the elimination of Tourism B.C., because Tourism B.C. made the decisions based on what the industry was saying. They had a board of directors from the industry who established what the priorities would be and where that money would need to go.

That's been eliminated. Basically, we're seeing dedicated industry professionals whose voice will now just be advice, no longer direction, and it will be up to the minister to set the final course of where that funding goes — based on his discussions with his colleagues, with other politicians, not with the industry making that decision.

So would it be fair to say that the industry making the decisions about where the marketing dollars need to go, as in Tourism B.C., is a more dependable process than a minister and a bunch of politicians?

Hon. K. Krueger: I'm not sure why the member believes, except based on the experience of the '90s, why it would be less preferable to direct the accountability to the people who are elected by taxpayers and the electorate, rather than by an industry. We are the government that was elected to be the guardians, the stewards of the public purse. We have made a decision to change the delivery model because we believe that it will produce better results, particularly given the opportunity that is presented to us by the Olympics. The member's questions seem to me to be speculative and repetitive.

[1625]

B. Ralston: Just to begin to close on this section, what the minister seems to be saying is that the amendment that's proposed eliminates "the raising of revenue for the purposes of Tourism British Columbia" — in other words, dedicated revenue for a specific agency with an industry-specific board dedicated to marketing British Columbia — and replacing that by "the purpose of raising revenue."

I just want the minister to confirm that the revenue will be raised for the purposes of general revenue and that the wording "for the purpose of promoting tourism" is directory and not mandatory. It's not the same as dedicated funding that's referred to earlier in the same amendment.

We're replacing dedicated funding, a board of professionals independent of government and dedicated to marketing British Columbia with a directory recommendation, the revenue going to general revenue, depending on the political winds of the time.

Would the minister not agree — given his support for an independent agency in the '90s that he refers to, his praise for the changes that were brought about in 2001 — that his defence is simply a seething mass of contradictions and doesn't really address the question?

Hon. K. Krueger: The amendment makes it very clear. It imposes a legislative obligation on where the revenues will flow, and that is to the promotion of tourism.

B. Ralston: So perhaps the minister can take some advice on this. Is this the minister saying that the wording "raising of revenue for the purpose of promoting tourism" is mandatory — that it is obligated to be spent in that broad area? Or is it simply discretionary, as is most expenditure that a minister or a ministry would preside over? It's discretionary spending like any other. It's not mandatory.

Hon. K. Krueger: The obligation is clearly imposed for the promotion of tourism.

B. Ralston: Is it mandatory or discretionary? Can the minister answer the question, please?

Hon. K. Krueger: It is a legislative obligation.

B. Ralston: Is it mandatory or discretionary? I suggest that it's merely discretionary. The wording is directory. It's not mandatory. It doesn't have to be spent. The money raised by this tax does not have to be spent, or money in that general area doesn't have to be spent, in a mandatory way. There's no compulsion to do it that way. There's no legal obligation to do it that way. The section is satisfied by the exercise of the discretion of the minister.

Hon. K. Krueger: Mr. Chair, this question has been answered a number of times now. It's becoming very repetitive. There is nothing clearer than legislation that puts an obligation on government for where a stream of revenue is going. This is a legislative obligation.

B. Ralston: Well, if I may comment. The minister hasn't answered the question. I think anyone who reads the transcript or views the video will agree that the minister has not answered the question. His answers were not responsive. They were not clear, and I'll leave that to the public to decide.

Given the hour, I move that the committee rise, report progress and ask leave to sit again.
[ Page 824 ]

Motion approved.

The committee rose at 4:29 p.m.

[1630]

The House resumed; Mr. Speaker in the chair.

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

Hon. K. Krueger: I call second reading of Bill 8, intituled Strata Property Amendment Act, 2009.

Second Reading of Bills

Bill 8 — Strata Property
Amendment Act, 2009

Hon. R. Coleman: I am pleased to move second reading of the Strata Property Act, Bill 8.

As we end in a riveting debate with regards to this very compelling piece of legislation, I'm sure everybody will be very excited about its contents, especially those who are new in the House, who weren't here for the last time this bill was actually introduced in the spring. At that time I was not the minister responsible, but I did speak to the bill in second reading.

Now the world has changed, and I'm back here to introduce this act. There've been a couple of changes to it since the spring as a result of consultation, also because of some of the concerns within the marketplace that we felt needed to be addressed.

Basically, it significantly improves the dispute resolution process for strata corporations and strata owners. It enhances consumer protection and increases accountability, improves certainty regarding the ability to rent a strata unit — which is the most important, probably, change to the legislation that we saw in the spring. It creates more availability of housing for rent as a result, which is important in our tight housing market. It provides a framework for the creation and operation of strata developments in the province, sets out guidelines under which the strata corporations must operate.

The amendments are actually the result of consultation with key stakeholders — condominium associations, strata managers, developers, the Real Estate Council of British Columbia and strata property lawyers.

The dispute resolution process will be improved in three ways. First, small claims court will hear many strata property disputes so that the disputes can be resolved in a more timely and cost-effective way and don't have to always go to the British Columbia Supreme Court. Second, the amendments provide the authority to rewrite the regulations to improve the existing arbitration process, a workable and inexpensive alternative to going to the courts to solve disputes. Third, the amendments will allow us to establish new mediation processes and mandate mediation for certain disputes.

Other amendments may prevent disputes from arising in the first place. Democracy within strata corporations will be improved by lowering thresholds required to call a meeting or propose a resolution. Improved conflict-of-interest rules will ensure strata council members act in good faith and in the best interest of the strata corporation.

New strata corporations won't be able to change rules about units that were already designated as rental. They can't impact the rights to the owners and purchasers for the marketability of the units. Owners will be able to continue to rent their units until the date the rental period originally disclosed by the developer expires. Existing strata owners will not be affected by the change. Previously the ability to rent a unit designated by a developer would expire at the time the first purchaser sold the unit or at the date that the rental period expired, whichever occurred first.

The bill also contributes to better strata relations by addressing requests for greater clarity, flexibility and accountability. Clarity by affirming the ability of strata corporations to pass age-restriction bylaws. Flexibility by allowing notices and other documents to be e-mailed to strata corporations or owners who consent to that form of transmittal. This new delivery option encompasses the most current mode of giving notice and provides an economical option for many strata corporations and owners.

[1635]

Amendments strengthen fiscal stability and accountability in strata corporations by requiring depreciation reports and audited financial statements. The requirement for depreciation reports will help strata corporations understand the magnitude of future costs of replacing or repairing depreciated assets. These amendments will provide owners with the protection of regular reports and audited statements and give them the flexibility to override these requirements by a three-quarter vote where they consider it appropriate.

Finally, this bill enhances consumer protection. It gives owners, former owners and potential purchasers greater rights to access additional information. It ensures that special levies can't be mingled with other strata funds and are only invested in appropriate, insured accounts. It allows the courts to break a deadlock when the strata can't quite get a three-quarter vote needed to make a crucial repair via a special levy.

In conclusion, the proposed amendments will improve ways for owners and buyers to protect their hard-earned investment. At the same time, it will create needed housing for rent in British Columbia.

I look forward to the member opposite's comments and will conclude my remarks after second reading debate.
[ Page 825 ]

S. Simpson: Thanks to the minister for his comments.

I'm pleased to have the opportunity to arise and speak to Bill 8, the Strata Property Amendment Act, 2009. This piece of legislation is essentially bringing forward, almost in its entirety, Bill 12 from the spring, from March of this year, prior to the election, when the government introduced Bill 12. That bill, of course, as you know, died on the order paper and has now been brought forward in the form of Bill 8.

[H. Bloy in the chair.]

The purpose of this piece of legislation, I do believe, really is to strengthen procedures in the operation of our stratas and to make the sector somewhat more self-regulatory than it has been in the past.

It is critical legislation. It's legislation that affects, probably, upwards of a million condominium owners and renters across this province, people who reside in condominiums and who experience the relationships of strata councils and all those things that are entailed in condominiums.

Certainly, a number of the changes that are proposed in Bill 8 are positive. They're changes that the sector has asked for. They are changes that the sector is looking to move forward on.

Having said that, we also, though, know that there are a number of questions that have been raised with me by folks in the condominium sector — questions about things that are omitted from the bill, about the clarity of some of the pieces of the legislation, about whether the content and the initiatives that have been put forward in this legislation will in fact meet the objectives of the people in the sector who are looking for improved operations of their stratas.

Lots of that probably leads to the comment that I think I've heard more than any other since the legislation, Bill 8, was introduced. What I've heard more than anything else in this has been a concern about the lack of consultation in this process and particularly an open consultation.

We know that when Bill 12 was brought in, there were some groups that were asked to sign confidentiality agreements. Some organizations chose to do that. Those ones that signed those agreements had some discussion, certainly with the ministry, about the content of this bill. Other organizations, for any variety of reasons, were not prepared to sign those confidentiality agreements, and they were not part of that conversation.

Now, that's fine. That's what occurred leading up to the introduction of Bill 12 — the predecessor, or the first version of Bill 8, which was introduced back in our session in February.

At that time, when that legislation was introduced and there was a brief debate here in the chamber around it, the Minister of Finance, who was the minister responsible for the introduction of this piece of legislation at the time, made a comment in closing the debate on second reading of Bill 12. What the Minister of Finance said at that time was:

[1640]

"We should go out and invite feedback from organizations rather than pushing this bill through to a conclusion in a rushed manner.

"I certainly invite that feedback in the weeks and months to come. This is a bill that obviously will not complete all of its stages before this House rises. But it is certainly a piece of legislation that if we are re-elected as government, we are committed to bringing back into this House. We're committed to assessing the constructive feedback that comes from condo owners and strata property associations, property managers, the general public and anybody with regard to what's in the bill.

"If there are changes that are desirable, then we would certainly consider incorporating those changes before the bill would be reintroduced."

That was the commitment that was made by the Minister of Finance when this bill was under his purview. He was shepherding what was Bill 12 at that time through the House on second reading. Those are the comments that he made to close debate on second reading at that time.

I've had the discussions with folks around this issue, whether those folks are with the Condominium Homeowners Association of British Columbia — they spoke about this — or the Vancouver Island Strata Owners Association. Both those groups — and I'm sure the minister has heard from both of them — have raised issues in regard to the level of consultation that took place and to the level of consultation that they had expected based on the comments of the Minister of Finance at the time of Bill 12.

Based on those comments, they had anticipated that there would be a broader discussion, a more formal consultation, a consultation that would allow those groups to talk about the bill, to engage in a discussion around some of the specific content and some of the specific questions that they had. I know there is real disappointment among those organizations that that consultation and discussion, in a more structured and formal way, didn't occur — certainly to their satisfaction in any way, shape or form.

I've heard from individuals as well, but certainly both of those significant organizations, when it comes to stratas and condominiums in this province, have raised the frustration in the last few days about that lack of consultation and discussion. As I said, they believed they had a commitment that there would be that discussion, and they don't believe that it occurred. I know there was a disappointment — and there's real disappointment about that on the parts of those groups — that there was no formal process, no discussion document, no ability to work with Bill 12 prior to having it come back in the form it is as Bill 8.

We'll get to talk a little bit more about that in a bit, but I'd like to talk about some of the aspects of the bill and
[ Page 826 ]
some of the observations that I have about the aspects of the bill and certainly some of the comments that I've received from those who are active in the strata movement as condominium owners or activists on strata councils and who do and entertain that work.

One of the areas that the bill deals with, of course, is particularly the whole case of rental disclosures and developers, and the opportunity for developers of condominiums to be able to make those disclosures, that certain numbers of units will be available for rental purposes. People will be able to purchase those condominiums with confidence that they can put them on the rental market and use them as rental properties and that a strata council won't be in a position to be able to block that for a period of time.

It's an interesting idea. It's an idea that I certainly think is worth discussion, and that opportunity is one that is worth looking at. I know, though, that it does raise questions for folks in condominiums and in stratas as to how that will work and under what circumstances and how they will deal with that. I know that they would have liked to have had an opportunity to have more discussion about it.

One observation I would make is that I believe the minister…. Suggestions have been made that by opening up these rental units, this will play a significant role in starting to address the housing issue. I'm certainly always happy to put more rental accommodation on the table, but I would make the observation that in new construction, these units are not likely to be cheap by any means.

[1645]

We're going to be talking about pretty expensive housing, and we're also talking about condominiums that — not in all cases, but in most cases — certainly don't meet the needs of families because of the nature of the units. They're one bedrooms; they're one and a den; they're two bedrooms. They don't meet the requirements of families.

One of our biggest challenges right now is meeting the needs of affordable rental for families, and that's a critical need in this province. While this will put, I suggest, in many cases some units on the market for rental that will be not cheap, they also won't be units that will really meet that requirement that most families have when they're out looking for housing. I think that it is a move that certainly has some merit, but I don't think it's going to necessarily deal with that housing issue.

Other parts of the bill that are introduced bring in requirements around depreciation reports, which would better inform owners, certainly, and prospective buyers of the value of the strata and how it's valued based on its depreciation. And that's a good thing. It adds to the transparency, I think, for owners and for strata members as to what's there, and putting that on the table is a good thing. The same with requirements around audited financial statements, again, improving the quality of information, and I don't have a problem with the notion that you can exempt out some smaller condominiums where the price of an audited statement may be onerous.

Those are two pieces that I think are good additions and good changes. If I have a concern about those, though, it's that the decision, as is the decision with a number of things in this bill, will be done by regulation and not by legislation. There will be a regulation and there will be an OIC, and at some point that will all be done. We'll, in fact, see those changes at some point by regulation, rather than after a discussion here around the specifics of what that might look like.

Those concerns have been raised to me, again by people who are active in this sector, that it would be much to their preference that these be legislated changes and not ones that can be dealt with at the whim of regulation and changed at the whim of regulation at some future time. There is concern about that. I think it's a fair concern, and I think it's a concern that we should respect.

It would be preferable, I believe, to have had those changes. To have those pieces included here is a good thing, but it certainly would have been preferable to have the specifics of what those requirements around audited financial statements or the requirements around depreciation reports might, in fact, look like written into the legislation itself.

There are other pieces of this that I think are pretty important. It does have requirements around mandatory reserves, and I know that there are people who have concerns about the additional cost pressures of putting mandatory reserves in place. But in terms of protecting the long-term sustainability of stratas and properties, I think that it probably makes good sense to have some obligation, to have reserves in place that ensure or provide some additional protections in terms of the strata councils and in terms of the actual physical plant.

I do wonder about the decision, about the 75 percent rule to be able to spend. I wonder if that's a bit high. I wonder if maybe two-thirds is better than 75 percent. I think that's a fair debate, and we'll get to engage in some of this discussion when we get to committee stage on this piece of legislation. I'll look forward to that.

One of the other changes, and the minister spoke to this in his opening comments on the bill, is the shift in terms of where strata issues land if they end up in the courts, and of course that shift is to move them out of the Supreme Court and into the provincial courts. There are some positives for that. Certainly in terms of the cost it's much more economic, much more affordable to put these matters in the provincial courts. I don't think there's any question about that.

[1650]
[ Page 827 ]

Some of the challenges, though, and the concerns that have been raised to me…. These are from people who are supportive of the principle of getting it down into the provincial courts so that the costs do get cheaper, But there are concerns about the potential for nuisance claims because it is cheaper and you don't get costs, as a rule, in the provincial courts, whereas you can get costs in the Supreme Court. There are not costs there, and there is some concern about that.

I think there's even a bigger concern about the backlogs in the provincial courts. It can be up to a couple of years to get cases before the provincial court because of the situation within the courts and the demands on the courts. Concern there is that people will have issues that they may end up seeing heading for the courts and being tied up for significant periods of time before they ever get any resolve in a courtroom. I know that is a concern, and it's a concern that's been raised to me.

The other concern about moving to the provincial courts from the Supreme Court is that the provincial courts don't have the authority to give injunctive relief. If there are matters going on in a development, possibly with a strata member who is not trying to find solutions with the strata council — or vice versa, for that matter — the ability for somebody to take the matter and get injunctive relief is not there if they're dealing in the provincial courts. That's a bit of a concern for folks and something, I know, that people wanted to speak to and wanted to be able to talk more about.

All of the people that I talked to were glad, of course, that you'd reduced the costs from the thousands of dollars it would cost to end up in Supreme Court, but they were looking for other ways. The minister talked about other forms of dispute resolution.

I know that some of these organizations and the groups — these people who are very engaged in the issues of stratas and how they work and how they engage their members — would have liked to have had more conversation about alternative dispute models and about whether there were other tools that were also economic, were maybe more timely than the courts at any level and were able to find resolutions they could bind people to that would help solve these problems.

There certainly is a challenge there, and I think it would have been worthwhile to have been able to have that conversation.

I've had a lot of people talk to me about this legislation. Some are concerned that maybe it doesn't go far enough in terms of dealing with obligations around strata management groups, management companies that provide those services, of putting in place a proper code of conduct for those organizations and doing that, again, in conjunction with people who live in stratas, who sit on strata councils and who live with this experience every day. I know that some of them have frustrations. Some of them are pretty satisfied; others, not.

Again, there are questions about strata management groups and organizations and some of the strata groups wanting to be able to have that bigger discussion about how that might occur and about how they'd put those controls in place.

Much in the same way, there's been some discussion about a definition. Somebody said to me: "You put this legislation in place. You self-regulate. You have to put in place some kind of consequences for people who breach the Strata Property Act, people who don't adhere to these rules."

Is there a requirement? People have said to me: "Do we have to have a requirement and an identification of what those offences might be? Are there consequences for those offences? What are those penalties or consequences?"

I'm not sure what those would be, but I do think it's a reasonable discussion to say that if you want this legislation to be effective, you put some teeth in it — whether it's individual members, strata councils or other parts of that community that are required to, in fact, meet certain conditions. And if they don't, there is some consequence for not putting that in place.

[1655]

The other issues, of course — there is some reference to this, certainly — are transparency issues. I hear that a fair amount, the right for people to attend meetings. In fact, it should be inviting members of stratas to attend strata council meetings and be able to participate.

Of course, there are times when there need to be in-camera sessions, particularly if they're dealing with matters of breaches of strata bylaws by individuals. That doesn't need to be a public discussion. I think those areas quite rightly have some confidentiality to them, and they need to do that. But generally, stratas should be inviting their members to come and be part of those discussions and part of that process.

In the same vein, it makes sense to have strata minutes with some expectation or some uniformity in terms of what they include, their availability and the timeliness with which they're produced. Again, and maybe this comes back partly to the questions of confidentiality, there are issues, obviously, around privacy. Those issues could be reflected in the minutes as well, and I think that's reasonable. You need to ask yourself: what does that look like, and what do those minutes look like? But they should certainly be available and able to be dealt with.

There are also questions here that have been raised to me sometimes about uncertainties within stratas around common property and issues around common property — about how those get dealt with and how decisions around common property get made. It could be crawl spaces, it could be common window areas, it could be foyers, or it could be any number of things. I'm told by people in the sector that they sometimes create complications or challenges and that we need to find better
[ Page 828 ]
ways to deal with that. It would have been good to have had some focus on that.

You hope it's not too often, but there certainly are times when people are delinquent in paying strata fees. The question is around the obligations that a strata council has to be able to move forward and make an effort through small claims to be able to collect those fees, what the requirement and the thresholds for votes are to do that, and whether that 75-percent threshold should be reduced and brought down to a smaller number in order to be able to move forward so that strata councils can ensure they can collect delinquent fees.

I know that the bill does deal with some questions around how conflict of interest is dealt with. The issues have been raised, of course, about members of strata councils who, if they make decisions that affect the values of their properties or other people's properties in any differential way…. There is a need to be clear about that and to be sure that there is a conflict policy in place that not just allows but expects and obliges people to excuse themselves from those conversations or those decisions so that in fact there are no conflicts there. There clearly needs to be some rules around that and some decisions related to that and to how that works.

It will be important for us to be able to put those on the table in that sense and to be able to have those kinds of conflict rules. I know that's another area, as we've spoken to before, that many of the organizations that are involved around stratas and who are very keen about Bill 8 and this particular amendment would like to have had more discussion around.

They would like to have been consulted in a better way, would like to have had the opportunity to have that discussion among themselves and with officials of government about how best to get at some of those issues, how best to address and resolve some of those issues. Unfortunately, that doesn't seem to have occurred.

[L. Reid in the chair.]

Part of that challenge, of course, is that we now have a situation where we have the piece of legislation that is moving forward, which I expect we will pass in this sitting and end up making the law without necessarily having had the conversations with those people on the ground that they would have liked, that they desired to have and that, more importantly in many ways, they had expected they would have, based on the commitments that the Finance Minister made in March of this year when he spoke to Bill 12, the predecessor of this.

[1700]

He talked again about the willingness and the openness and the desire to go out and have a broader consultation, and the willingness and the openness and the desire to collect ideas and comments from people, which would allow this bill to become more rounded and more complete. That hasn't occurred.

Another concern that has been raised with me about this, in my conversations with groups and individuals who are looking at this, is the reliance on regulation. It's like a fair amount of legislation that comes out of the government side. It's a bill that, on many of the critical questions and the key questions, relies on regulation to be able to put the content and the substantive parts of the law in place. It doesn't require our legislation.

Most of the people that I spoke to — the vast majority — have concern about that. They have concern that discussions around regulation are obviously confidential — they're private discussions; they're discussions behind closed doors at a cabinet table — and that the results of those discussions are some kind of regulation that we essentially know little or nothing about until we read about it in the Gazette or somebody issues a press release to tell us what will occur.

That's a situation that is problematic — there's no doubt about it — and I think it's increasingly problematic with the growing skepticism and cynicism that the public has in regard to how the government chooses to conduct itself.

We see that in a number of other areas. We've spoken about many of those before, and we'll speak about many of them again, I'm sure. But it also raises some concern for folks as it relates to the Strata Property Amendment Act and with all of those areas that will now be dealt with through a regulatory approach rather than through a legislative approach — a legislative approach where those matters would need to come to this House, where we would all have the opportunity to engage in full debate about those matters, where it would require a vote of this Legislature to be able to approve those matters and make them law in British Columbia.

Equally, or more importantly in some ways…. Clearly, that's important because it's much more transparent. It's much more open. People get to see the discussion. They get to make their own determinations about the merit of the arguments of all sides of a debate.

It also allows outside, extraparliamentary commentary to be had from those groups and organizations that are interested or concerned about these matters — to be able to make those comments and move forward and talk about their concerns as it relates to these matters and how they might affect the lives and the activities of a strata council or of a condominium owner.

Those folks have, in large part and almost without exception, said to me that they would be much more comfortable if, in a more substantive way, Bill 8 was about legislative change rather than regulatory change because of the concern about how that might be seen and how that might affect itself with these groups.

The other thing, of course — one of the other reasons for wanting it to be entrenched in legislation rather than
[ Page 829 ]
regulation — is that then once pieces of the law are in place, once the procedures and the processes are in place, people can be confident that those cannot change in any substantive way unless they're brought back through a legislative amendment and a change is made here.

Hon. Speaker, I would say that while I've not got very much longer to go, I do have a few minutes, and I am the designated speaker on this.

So those changes can occur. We would certainly encourage that there be less reliance on the regulatory change.

The last comments I'd like to make around this really are that there has been a concern. First of all, the legislation clearly needs to go forward. There are changes in the Strata Act that need to be made. There are issues around the Strata Act and around how it affects people and their lives and their assets and their homes and the governance of their buildings that need to be changed.

[1705]

A number of those things are addressed in Bill 8, but there are issues that Bill 8 has not addressed, has not dealt with in a thorough way, and they should be. There also are issues here, as I've noted before, where there's concern that too much of the substance of Bill 8 is regulatory and not legislative in nature, of how it will be affected.

There is also a very large concern, as we know, that the process that the government has gone through to get from Bill 12 to Bill 8 is a process that was not what people had envisioned. It was not what people thought they were getting. They thought they were getting a much broader discussion and conversation. They thought they were getting a more formal consultation out of this process, and I know they were looking forward to that.

That's why organizations like the Condominium Home Owners Association, which represents the province…. While they certainly are supportive of many things in Bill 8, they have made the public comments that they are frustrated about that lack of what they would call a substantive or meaningful consultation. I think those comments are fair, and I think people deserved that consultation.

The question is: how do we do that now, now that the government has introduced this legislation? How would we allow for that consultation to occur and go forward? It's a pretty difficult challenge to make that occur at this time.

I do look forward, as we head later on into committee stage, to the opportunity to go through in some detail some of these questions, to probe some of those areas where regulation is going to be used to flesh out the details of matters.

I'm hopeful, and I'm sure the minister will be able to enlighten us at that time about what that content looks like and what those expectations are, so that if we can't have the debate here in the Legislature and entrench it here, we can at least get it on the record and in Hansard and then go back. When those regulatory changes come forward and those regulatory changes are made, we'll be able to look at the Hansard record to satisfy ourselves that what the minister has to say about the content and intent of this is in fact what the results look like. I look forward to having that conversation.

So a piece of legislation that absolutely is necessary — one that I think there's a little bit of disappointment and frustration about the way that it's been gotten to and a little bit of uncertainty around some of the pieces and how they will actually play themselves out when it comes time to put them on the ground. With that, I'm happy to take my place and follow the rest of the debate.

S. Herbert: I rise today to speak about Bill 8, the Strata Property Amendment Act. I rose in this House this spring to speak about the act when it was known as Bill 12. At the time I spoke about how condo owners that I had spoken to — strata property owners — were concerned that it had taken so long to get to that stage, referencing how in November 2003 the provincial government had made a review of the Strata Property Act and at the time had said they thought that was something that needed to be done. That hadn't changed for five years. The act still remained the same and needed to be looked at over that period — five or six years up to today.

When the bill was introduced this spring, I spoke about how we needed to move forward on it. But I also spoke out, I believe, about consultation and about the need to speak to those who would be affected by this bill before it's passed in this House. There has not been a public consultation on this bill.

Now, in my previous time involved in municipal politics, I can't think of many decisions that we made which weren't open for public consultation. Very small items — maybe a spending of $30,000 — we would have a public consultation on. Do you put a small marker of remembrance of somebody in a small park somewhere? There would be a public consultation and public notification.

[1710]

There's a real principle there that the people an act affects, the people a motion affects, should be spoken with, listened to and responded to — because, after all, it is the people who send us here to look out for them. Certainly, if we're to do our job of looking out for them, we need to hear what they have to say in a structured way.

For something like this Strata Property Amendment Act, Bill 8, I would think that a fulsome public consultation would have happened. That's what I thought would have happened this spring.

When speaking about this bill, as noted by my colleague from Vancouver-Hastings, the Finance Minister
[ Page 830 ]
said it wouldn't pass the House this spring. It would give the opportunity over the summer and into the fall to have a public consultation, to have that discussion, to listen to the people who would be affected by the bill, so that it could be modified, I would assume, and so that it would work better for everybody.

I'm supportive of this bill for the most part, because I think it has needed changes, which has been known for a long time. It's surprising to me that it has taken so long to get to this point, but what's even more surprising to me is that these changes which have been brought forward have not been talked about publicly with the people they will affect.

You know, I think one of the challenges with this bill is the fact that a strata property could have a meeting of the strata council about decisions relating to the membership of that strata council, to the individual condo owners, and could easily make it so that those condo owners couldn't attend. They wouldn't be able to listen to their council members discuss what was going on here.

That little piece seems to be an example of what is happening here in this bill, the lack of consultation regarding this bill. It was put together in private without open discussion, without the ability for the people it would affect to see and to speak on how they think it should be enacted.

It's troubling to me, but I guess I shouldn't be surprised, that the bill still has this possibility that a strata council could — and it doesn't say for what reasons — still continue to meet and make decisions about a strata without its members being involved and being able to watch its council make those decisions.

That seems to be pretty par for the course with this government. It is not known for being open and accountable. It's not known for reaching out and listening to people, and in the few instances where they have done that — I think of the Conversation on Health — the responses of the public have not been listened to either. I guess it shouldn't surprise me, but I continue to believe that we will listen to people as government and that we will respond to them.

I'll go to the Strata Property Amendment Act and to some of the good things I like about it. Although there are some challenges which need to be worked out, I think they could be, if we worked with the public and we listened to them.

I think about providing broader access to the Provincial Court. If you get into a strata dispute…. We all have neighbours. We've all seen these things spiral out of control in certain communities. It happens. Not everybody can be the best neighbour or is the best neighbour, unfortunately, and sometimes there are disagreements, so you need to have some sort of dispute resolution.

In the current legislation you'd have to go to the Supreme Court. This bill would bring you access to the Provincial Court, which is cheaper — which opens up that accessibility — although there are challenges with the amount of time it takes to get into Provincial Court, and there are other challenges around that whole process. I think if we listen to the members, if we listen to the public, they could be addressed and worked out. I would hope that would happen, because I think it's always better to listen first and then act, rather than act, injure or make an error and then go back to listening and then trying to repair the error after you've already put it through.

[1715]

As we've seen, this bill has taken so long to get here — really since November 2003 — when there was the first discussion around the need for a full review of the Strata Property Act. Now that it's got to here, my concern would be that if this got passed without consultation, it would take many more years before any other changes could be made because there are errors in the bill which would not have been addressed because of the lack of public consultation.

You know, about the requirement for an audit of a financial statement of a strata corporation — that makes sense to me. That's certainly something that I know — the strata corporations that I've been involved with in the past — we have done just as a matter of course because it makes good sense. I know in some other situations where I've spoken with strata owners, there may be a council that's less responsive.

There may be other reasons why groups might not want there to be an audit, and you hear the horror stories of people discovering, after they've bought into a strata ,that it's leaky, that the books aren't quite what they said they were. That leads to much hardship in our communities. Hopefully, this will go a good long way to get there.

I'd like to turn to the next part of this bill — the challenges with this bill, the reasons why I have problems with this bill being introduced in the way that it has. It's the product of a closed-door process. It's the product of a lack of attention to the people who this bill will actually affect. I think of the Vancouver Island strata owners. I think of the comments that the Condominium Home Owners Association has made, the people that speak out for strata owners in an organized way as best they can.

They've spoken out after this bill has been brought here with concerns about certain sections of it. They've spoken about the need to have this bill, absolutely. But if it's going to be done, it should be done right. The lack of public consultation on a bill like this really can taint a process and taint people's vision of what a democratic process is and make them concerned that there may be other reasons things have happened behind closed doors when they may not need to be concerned about those issues.
[ Page 831 ]

I think about the submissions that I've had personally as an MLA from different condo owners and from associations, where they come to me and say: "Well, I want to influence the process somehow, so I'm going to go to you as an MLA since officially there is no public process where we can be heard."

As a private member, I have to tell them: "Well, you know, the government should have a public consultation process so that we can see where we need to go with this, so that your submission can be seen in the fuller light — have that discussion, have that debate so that we can come to a better resolution."

Some of the concerns that strata owners have raised with me….They've raised concerns about licensing standards for strata managers. I've had the luck of having some very good strata managers in the properties that I've been involved in, but I've heard stories from others of a new strata manager every couple of months because they've had to continually seek a new one because the ones they've dealt with are not representing their needs in an accountable way to what their building requires. I think that's an issue which is not addressed in this bill but would be one that certainly needs to be discussed and resolved.

I think about some other challenges with this bill. The bill does not, as far as I can tell, clarify the meaning of common property. In buildings that I've had associations with and friends have had in strata councils, in strata properties they've had, condo owners — constituents of mine — have all raised the problem of what is technically common property. Is that the windows in a strata-apartment-style building? And there has been debate back and forth in councils where they've fought over this. They've gone to seek legal suggestions.

[1720]

Different suggestions of what that common property might be continue. We don't see an answer for that question in here. Had the consultation been done — and, hopefully, this government will engage in fuller public consultation on this bill in some form — we might find a way to end those disputes, stop wasting the money of strata owners. Maybe people would get along a little better because the rules are clearer. Certainly, that's something we should all be aiming for.

I think about conflict of interest. There are some concerns around conflict of interest and where it might crop up in a strata council. What are the provisions to ensure that conflict of interest is not, again, tainting processes of a strata council?

I'm sure that people at home and people in this House will be able to think of occurrences where conflicts of interest have gone forward unchallenged in strata councils just simply because of the inherent difficulties of laypeople, often, in understanding the law but also in terms of their ability to hire lawyers to take these on, especially in smaller buildings where your neighbour and yourself want to get along.

Sometimes things get left unchallenged where really they should be…. But the current legislation is unclear, and this bill, it has been argued, doesn't go far enough in terms of making those kinds of issues clear.

I come to section 6 of Bill 8. I mentioned this in my opening remarks — about the right of an owner to attend a strata council as an observer. Most buildings I believe to be well-run buildings and building or townhouse complexes where people do respect each other. They do want to work together, and they listen to each other.

They consult with each other on expenditures. For example, what should the north garden of the building look like, or what colour should the halls be painted? Things like that. They're open for discussion in a way that this bill has not been — again going back to the fact that oftentimes in smaller democratic associations like strata councils they're more open for consultation, more open to listening to the people than, unfortunately, this government is about very major changes.

I would think that a bill that's introduced in this Legislature should have a provision that members of a strata council should actually be able to attend as observers their strata council meetings. I understand that in camera, sometimes there are things, legally, that you need to discuss which can't be held openly in such an open forum. But that's rare in strata councils, from my understanding.

Certainly, in reading through the minutes and knowing many strata property owners, strata council presidents, treasurers, and on and on…. Normally they want to have people there. But there are cases — I've heard of them, and I've talked to people who have gone through them — where a strata council may believe that it's in their best interest not to let the members know what's happening.

I think of some cases, again, where people have discovered after the fact that a building may be leaky because a few people have decided to hide the facts from that public about what they're buying. That to me is a very disappointing and very upsetting occurrence for those people.

It's disappointing to me that this bill doesn't go as far as it should in terms of making sure that the decisions of a strata council are open and accountable for the members of that strata council by allowing them to attend as an observer. I'm not sure why that is not in this bill. Maybe the government did not think of it. Maybe it's because of their lack of public consultation or regard for the public that this bill is going to affect.

[1725]

I know there are some concerns that have been raised about the number of strata council members required, under section 39 of the Strata Property Act, before they can cancel a contract with strata management services.
[ Page 832 ]
Currently that's a three-quarters vote of owners. In some buildings that can be pretty challenging. In my constituency, there are some buildings with hundreds of owners. I'm sure that's the same in many other constituencies across this province. So sometimes that can prove challenging.

In most occurrences, if it's a management company that the strata corporation does not want to work with anymore, that's clear and it moves on, but not always. That's something that I think needs fuller discussion and fuller public debate.

I think the other challenge we've got is that the bill relies on regulations that aren't yet disclosed, as far as I can tell — regulations which could really impact on a building's ability and a strata council and the members of that strata council to do their jobs and to maintain their properties.

If you're going to be introducing regulations which would impact a group of people around their ability to live their lives in their homes, I would think that would be something that would be discussed with them, rather than something that would be pushed on them or forced on them after the fact without it being open to public discussion.

So there are many challenges with this legislation, but I am glad the legislation is here. I just wish that the government had followed through on its word and actually had a public consultation about the bill so that they could understand where many of these things are coming from. That, to me, is what government should be doing in most cases, especially when it affects people's homes and their ability to live in their homes.

A recent figure quoted to me was about one million British Columbians live in strata properties. That's quite considerable. For a bill that could affect one million British Columbians and their lives and their homes, you would think they would be involved in discussing it. You would think they would have the opportunity to speak on it, to make suggestions, to tell the province — their government — what they want to see. It just makes sense, but that is not what happens here.

If the members opposite are concerned that I'm repeating myself, well, this is what I said in the spring, and they didn't hear it then. So we're trying all sorts of angles to get them to understand that good government is made through good listening, good actions on behalf of the people that we're sent here to represent. That's a theme that certainly I've taken to heart in my role as an MLA, and I think one that we all need to take to heart. That's why I'm so disappointed that this bill has come here without that public consultation.

There are many sections in this bill that we will get to in the process, getting into finer details as we go, but I will just end with one thing. If a bill that's introduced in this House that affects the lives and the homes of one million people has no public consultation, yet is expected to be good public policy, I'm very confused. This is what the government seems to ask us to believe — that somehow they know best. Somehow they know better than the people who actually live in these strata condos and these strata properties.

I would say the knowledge and the wisdom exist in the people of our province, and that it is our duty as legislators to go to them when we're going to be changing regulations which affect how they live, as this bill does.

So on that, I will finish up my speech, Madam Speaker, and I thank you for the opportunity to speak on Bill 8.

[1730]

M. Sather: It's my pleasure to rise and respond to Bill 8, the Strata Property Amendment Act, 2009, at second reading.

Unfortunately, I had a meeting a while ago, so I missed all of the minister's opening remarks. But I think he said something about this being a scintillating subject and that we could all look forward to being kept awake this Thursday afternoon. Well….

An Hon. Member: Not anymore.

M. Sather: Not anymore. Snooze time.

But when I was constituency assistant in the '90s in Maple Ridge — and I've said this many times — of all the issues I dealt with, some of the worst, the very worst, the most difficult to deal with, had to do with stratas. It's unbelievable in some respects, I guess, the amount of angst, the contentiousness, the absolute rancour that occurs over some of these kinds of disputes.

I guess it speaks somewhat to our capacity, or lack thereof, as members of our society to get along with one another. But whether you're in a strata, in a condominium or in detached housing, if you live in a subdivision or you live in Vancouver, there are often contentious issues between neighbours, whether it's the trees on either side or barking dogs or whatever it is. I certainly wouldn't want to suggest that it's only strata property owners that have considerable problems.

Nonetheless, they are considerable. Because of that, there has been a lot of effort on the part of those involved to come up with some better solutions than what we have so far.

A review of the act was promised back in 2003. It didn't happen. I don't know whether that's because the government didn't want to mess with people that are that upset or whether it's just that difficult to come up with legislation that is workable.

The government did come forward in the spring after last year, about a year ago, engaging in private and confidential communications with selected developers, property managers, lawyers and others. They came up with the bill, the Strata Property Amendment Act, Bill 12, in the spring of this year.
[ Page 833 ]

But that one died on the order paper, and we proceeded forth with the election. The government said at that time — I think it was the 31st of March, so only days before the House rose — that the government was committed, if re-elected, to bringing it back. And wow, they followed through on that commitment and are bringing it back.

I just wanted to read, if I can find it, what the Minister of Finance at the time said. He said: "We should go out and invite feedback from organizations rather than pushing this bill through to a conclusion in a rushed manner. I certainly invite that feedback in the weeks and months to come."

Well, I guess that a lot of folks are saying at strata property associations that that didn't happen or that they did get constructive feedback, perhaps, but it didn't have any effect, as such. So we are presented with what we have, and other members have spoken to the lack of consultation or the selective consultation that apparently took place.

[1735]

You know, I do look at developers and property managers, and the cynical side of me would say: "Well, those perhaps tend to be supporters of this government more than your average regular folk that are living in a strata." So maybe that's why they went to them and left out the million or so people that live in a strata.

But that may be just my natural tendency to be a little bit negative about the government. In fact, that's perhaps not the reason at all. When we get into further discussion, the minister can perhaps enlighten us on the process that took place or didn't take place.

One of the things that this act provides for is broader access to provincial court. I think, by and large, that's seen as a good thing. I think it's probably a good thing. Going to Supreme Court is expensive and difficult. Small claims court is going to be more affordable and accessible. That should be an improvement, and I expect it will be.

However, I heard a comment earlier today from the member for Nanaimo. I don't know. I don't want to usurp his great ideas or anything, or his wonderful thoughts, as he does tend to have a lot of those. Maybe he's going to speak to this later on.

I'll just say briefly that he mentioned that perhaps the downside, though, of greater access to the courts — knowing the contentious nature of the kinds of disputes that happen — is that that process could be used to bog down resolution. Hopefully, that won't happen. Hopefully, it's going to be a very positive development.

There's a requirement under this bill for a depreciation report, and that's a good thing. That gives repair and replacement costs for major items. That kind of openness and transparency will be helpful, I think, particularly to folks wanting to acquire a strata property. On the other hand, some have expressed concern that a three-quarters vote of owners can waive the requirement.

I've looked at the various bars that have to be achieved throughout this bill. Sometimes it's a 20 percent here, three-quarters there. Like I say, having dealt with these kinds of issues a fair bit, I'm loath to say whether the levels are appropriate or not.

Be that as it may, that is one of the concerns that has been expressed — another being that the regulations, which have yet to be disclosed, could allow exemptions from that very requirement. We'll have to wait and see what the regulations do hold so that we know what will be the case in fact.

Other criticism has been that this bill doesn't address the weak licensing standards for strata managers. If you're on the individual owners side, I guess sometimes you feel, and experience in actuality, that management has been perhaps less well informed than they need to be or sometimes perhaps don't have the communication skills that are required to deal with the kind of issues that result. I don't think it's debatable that it's not uncommon for the manager to become the subject of the debate of the dispute.

The Real Estate Council of B.C. — they're the ones that license the strata managers — has not responded to the concerns that property owners have expressed with that regard. The owners' associations, as I alluded to, feel that managers oftentimes wield a lot of power, and they're concerned about the licensing standards.

[1740]

Another objection that's been raised is that there are no offence and penalty provisions in this bill, unlike Alberta and Ontario have with similar-type legislation. But I guess that, in some respects, is in keeping with the general tone of self-regulation that our government and our provinces want to pursue.

There is some clarity that's provided in the bill re conflict of interest, and that's a good thing. But it doesn't address the situation where a developer of a strata property is also an owner and, therefore, a member of the strata council.

I'm going to talk more as we go on about the problems, the difficulties, with developer-owners. We've got a horrendous situation in Maple Ridge that I will make some reference to later.

If you think about it, if there's a discussion of a contract, for example, that the strata corporation is involved in, where the owner-developer is a party to the said contract, I think there's a strong case to be made that the owner-developers should be required to recuse themselves from the discussion, such as one would see in local government.

That's something that could have perhaps been resolved in a number of these objections, be they relatively minor or not so minor. I guess that's one of the
[ Page 834 ]
overriding — well, it is one of the overriding — concerns that we have: that the government didn't get the kind of feedback, broadly based, that we had hoped that they would after they brought the bill in last spring.

Section 6 of the bill embeds in the act the right of an owner to request and receive a hearing within four weeks. It says under subsection (2): "If a hearing is requested…the council must hold a council meeting to hear the applicant within 4 weeks after the request."

That adds some certainty, I think, for members. They know that if they make a request, it can't be delayed through various means. Inevitably, the act says that they must hold a council meeting within four weeks after the request is made. I think that's a good thing because as it stands now, some of the standard bylaws that strata councils had developed — some of them — had amended that to remove that surety that the complainant can proceed to be heard in due course. So I think that's a positive move.

Section 11 gives the council president or, in certain circumstances, the vice-president a casting vote in the case of a tie vote, if the bylaws provide for it. There's a feeling amongst strata property owner associations that this section neglects the issue of the number of votes that may be controlled by an owner-developer through unsold units. If you build a 20-unit building and, in the early stages at least, depending on the economy, if there are only nine sold, then de facto the owner-developer is still the majority owner of the council. That gives them some rise for concern.

[1745]

As I will proceed to discuss, I think there are probably some more serious issues than that with regard to that issue of owner-developers' involvement in strata councils. The feeling by the organizations is that limiting the owner-developer to one vote in council elections would support accountability. That, on the face of it, might seem drastic, but as I talk more about the kinds of things that can happen….

I'll mention right now that we have a situation in Maple Ridge that has been in the news over the last number of years and continues to be. We have an owner-developer that has been so difficult to deal with, has caused so many police resources, so many fire department resources, so many hours by the local government officials to try to deal with this strata property….

If there's anything in this act that helps a situation like we have in Maple Ridge — and those in Maple Ridge will know very well of whom I speak — it will be a vast improvement to our lives, because it seems to affect each and every one of us.

Interjection.

M. Sather: Yeah, the member for Maple Ridge–Mission knows of whom I speak.

The majority owner. This is a little bit of the history of what's going on, to inform the House on how hopefully useful this legislation is going to be. Through his lawyers, he informed the existing strata council that they were being removed through a vote of non-confidence by the majority owner. At the time, the owner and his family owned 12 of the 20 units, so they just manifestly said: "You guys are out of here."

Moving on to a couple of other things that happened. All motions from the floor to put money toward roof repairs and other issues were defeated, and the building is a disaster site. It's run-down. One section of it was burnt-out. The municipality, finally, after years and years of litigation and attempted action, were able just in the last couple of months to get that burnt-out skeleton demolished.

It's been the site of not only a lot of drug dealing and other illegal activities but some very deplorable conditions that people have been living in down there. It has certainly been distressing to us all.

The said meeting ended without a budget being passed. He then went on to use his majority of votes to increase the monthly strata fees, and he informed the other owners that he will become the general contractor in regards to repairs of the building — not to worry about any sort of conflict or anything like that.

It's been particularly contentious in Maple Ridge. As I say, I've met — and I know the member for Maple Ridge–Mission has met — citizens groups that are concerned. Fire, social services — you name it. Local government people just tearing their hair out on how to deal with a strata where the owner-developer simply refuses to cooperate, is litigious, goes to court, fires his lawyer at the last minute, and the process has to start over again. He's very adept at keeping everybody off balance, no doubt about that.

[1750]

Looking at section 24, which provides exemptions from restrictions on renters of the strata property units…. Basically, it says that an exemption to that restriction is allowed if a hearing is held. It says: "the strata corporation does not give its decision in writing to the owner, (i) if a hearing is held, within one week after the hearing, or (ii) if no hearing is requested, within 2 weeks…." So basically, there are some minimal requirements or whatever, but you can proceed.

If one looks at the current act, section 141 says: "The strata corporation may only restrict the rental of a strata lot by a bylaw that (a) prohibits the rental of residential strata lots, or (b) limits one or more of the following." So if the council wants to permit that, they can.

In the situation in Maple Ridge it's been alleged, I think with a certain considerable probability that it's true, that this same…. The modus operandi that this strata owner-developer has employed is to buy a unit — this one property in case, but there may be others, as I
[ Page 835 ]
understand it — to rent it out and to be not particularly choosy about — I don't know if quality is the correct word; it's probably not — the willingness of the individual or individuals to care for that unit. In fact, the feeling is that he's done quite the opposite.

You then have a neighbour who is "undesirable." What does that do? Well, it does two things. It drives down the value of that property, and it affects the other strata property owners. In other words, they're, like: "Well, do I want to live here anymore? I mean, this place is getting to be bad news." This is exactly what it's alleged happened there. He subsequently bought one unit after another cheaply because the place was getting so run-down that it didn't demand, didn't fetch a very high price.

I'm saying this to explain how some of what is allowed, like having renters in a strata property…. I'm not suggesting that that shouldn't be the case. It's a free world, and renters, as much as anybody else, need places to live. I used to be one. I understand that.

But how the situation can be manipulated by an unscrupulous person to, well, spread chaos in a whole town is unbelievable. I don't think this act is going to be able to address that. Maybe it can't. Maybe it's too much to ask.

What it does speak to is that wider consultation really needs to take place, and I would really encourage the minister, if he hasn't done so already — I don't know if he has — to discuss this issue with the local government, at least in Maple Ridge. They can tell him in detail about the problems that they've had. Hopefully, it might inform some revisions to this bill, if they're ever going to take place.

With that, I'll take my place. I think one of my colleagues wants to have a few words.

M. Farnworth: It's my pleasure to take part in the debate on Bill 8, known as the Strata Property Amendment Act, 2009.

[1755]

It's funny, listening to some of the comments, because they sound familiar, and in going back through Hansard, I was struck as to why they were familiar. Some of us had spoken on this piece of legislation once before, as the minister….

Interjection.

M. Farnworth: That may well be correct, Minister. I may well have spoken to it when it was introduced before, but I can certainly tell the minister who introduced it this time, as opposed to the minister who introduced it last time….

Interjection.

M. Farnworth: It makes a little more sense this time than last time, but it still has a few things, I think, that could be done to it that would improve it.

But, no, what is interesting is that this bill is one that had been introduced before it had died on the order papers. At that time, there were comments made that there would be an opportunity, or it would be a good opportunity, for further consultation and public input to determine how to make this a better piece of legislation.

I think that in some ways, the passage of time has resulted in some things that are an improvement, but still there are questions that are raised about the amount of consultation that's taken place and the length of consultation and just who was consulted. A number of those questions we will put on the record in our second reading debate, but they also will be addressed in terms of committee stage.

But I think one of the things we need to remember is that this piece of legislation deals with a very important topic — and that is, the relationships between where people live and the strata in which their unit happens to exist. Whereas your home, a single family home, is relatively simple when it's a fee simple piece of property. It's your property. You're responsible for the maintenance. The only strata or council you have, so to speak, is either you as the individual who owns it or you and your family in terms of, you know, who's making sure that….

Interjection.

M. Farnworth: Yes, as the minister says, that can be a challenge. I was just about to say in terms of: "Yes, you are cutting the grass this Saturday morning. No, you are not going out to play. You will cut the grass, and then you can go out. And you? You want to come home at three o'clock in the morning? Fine. But guess what. You're still painting the fence this morning and making sure the place is maintained."

That's how a single family house operates. That's how it's maintained and, as the minister says, not his, but the House that I grew up in. I remember my father was particularly…. On a Saturday morning, it was: "Where do you think you're going? Out? No. There are things to be done around the house."

[Mr. Speaker in the chair.]

That's the point. It's the family, the individual, who owns the property, who makes sure that their place is maintained, and if it's not, they're the ones who bear the responsibility. They're the ones who suffer the impact financially, and they're also the ones who, if it's left in extreme cases, suffer the potential of having the local government and municipality come after them, using the various laws and bylaws that are available to them to either clean up a property, or in extreme cases, the property — in the case of a grow-op, for example — can be taken away and confiscated.
[ Page 836 ]

But when you're in a strata unit, it's different. You own your unit, or you're renting in your unit along with a number of other people. It can be a small strata — ten, 12; one I once lived in was 18 — or it can be a significantly larger one — 500-plus units.

Each of those has their own problems, because you're dealing with individuals. You're dealing with contracts. You're dealing with maintenance. You're dealing with issues about what happens when people aren't able to pay their maintenance, aren't able to pay their fees. You're dealing with issues around who gets a contract, who can attend a strata meeting, under what basis can you terminate a contract, under what basis must a meeting be called, who's entitled to vote, who's not entitled to vote.

[1800]

All those things come into play, and whenever you have more than one owner, quite often the potential for problems arises and the potential for disputes and the potential for, God forbid, lawyers to get involved, even though some of my best friends are lawyers, but the opportunity for….

Interjection.

M. Farnworth: The member says, "Name names," but I'm not supposed to comment on the presence or absence of any members in this House.

The point is that disputes can be expensive and can create an unfair advantage on individuals who sometimes have deep pockets and on others who don't have deep pockets. We need legislation that provides a framework in which disputes can be resolved, individuals know their rights and responsibilities and a strata can function in a proper, businesslike but also open, transparent and democratic manner. That's why this piece of legislation is important.

There are a number of areas in this legislation where I think there have been some positive changes. I think that those are a good thing, and I want to comment on what I see as some of those positive changes — you know, adding the requirement for an audit of the financial statement of a strata corporation, unless it's exempted. This will ensure that the financial statement of a strata corporation has been audited by a qualified person and according to appropriate standards.

That's a perfectly reasonable requirement, one would think. Well, it didn't exist in the old legislation, so that's a significant improvement. One of the biggest disputes that often arises in a strata is around the statements — who is doing the auditing and who gets to see them — because the size of the reserves and how often payments are being made in terms of expenditures on repairs are very significant components of the cost of operating and the cost of living in a unit.

I see by the clock on the wall that my time is somewhat limited, but I do note that I have, I think, enough time to make the points that I wish to make today before adjourning the debate in probably eight to ten minutes or so.

The audited financial statement is, I think, a very important addition to this bill, as is the requirement for a depreciation report. One of the biggest factors in terms of people, in terms of expenditure…

Interjection.

M. Farnworth: The minister wonders if I'm talking out…. No, I'm actually pointing out to the minister the areas of the bill that I think are really good. As the minister responsible…. I know that sometimes some members think that I'm not very positive, that we in the opposition are negative. I just want to tell you that we're not always negative, that we are positive.

I know the Minister Of State For Mining is concerned about the length of my remarks and, as I said, probably in eight to nine minutes of remarks on this piece of legislation, I'll be ready to adjourn the debate, and then we can….

Hon. R. Coleman: Well, I won't be.

M. Farnworth: And the minister isn't…. I know he's looking forward to more discussion and wants to go. Some of his colleagues may not be ready to hear him speak, though. Some of his colleagues may have different ideas about what they would like to see happen.

The point is that the depreciation part is very important when you have an asset and you're part of that joint ownership. The value of the building, whether you decide to stay or to sell, how much you're going to invest in repairs or the length of time that you're putting aside revenue for — whether it's for a new roof, for landscaping, to replace boilers, heating systems or air conditioning systems — all those things require an informed decision.

Key to that is ensuring that there is a depreciation report — not only that but a depreciation report that is accessible to all members — and that they have a right to see one. I think that that is a key change that is positive.

[1805]

There are some things that are not positive about this particular piece of legislation, where I think that there are some changes that need to be made. In the limited amount of time that I have available today — I know that when we come back, we will have more scope and more time to debate this particular piece of legislation — I want to draw attention to one of my own, from experience. The bill doesn't clarify the meaning of common property. This may seem like a small item, but in fact it's not.

Besides your unit, most areas within a strata have areas that are deemed to be common property. They are
[ Page 837 ]
for the use and enjoyment of all members of the strata, or they serve a purpose within the strata that provides for the safe operation, maintenance and the running of the complex and the buildings in it.

I lived in a small strata in which there were relatively small patios and a back yard on a number of the units. On the original strata plan it showed an area as being a common area, which was to remain open. One of the individuals who purchased one of the units decided that that common area meant that they were free to build a structure on it which allowed them to store their bicycles.

Some people thought: "Hey, that's fine." Others looked at that structure as an eyesore. As a result, there was a dispute as to: "Look, there's nowhere to put our bicycles. This is a logical place to put it. So what's wrong with having this facility, this bike shed here? It abuts and, in fact, is on part of my property."

But there wasn't really a definition of that area as being common property. The way that it was in the plans gave rise to some confusion. As a result, there was an internal dispute that took some difficulty to get resolved.

That type of dispute would have been much better resolved and could have been resolved far more easily had there been a definition of common property. Along with that definition of common property goes: what are the uses for that?

Now, it makes sense to allow some — the strata council — to decide what are the uses within the common property, but certainly there should be a definition. If I were to suggest to the minister that one of the ways in which we could strengthen this piece of legislation is to look at that particular section that deals with common property and to strengthen that, I think we would have a better piece of legislation that would serve the public much more effectively than the current piece of legislation.

I know that in terms of time we are somewhat limited, but I would like to touch one other section of the bill before committee — the little House — adjourns and comes in here to rise and report progress. I see they're not here yet, so I know I have a few more minutes yet.

Interjection.

M. Farnworth: There are plenty of speakers after me, Hon. Minister. There are plenty of speakers.

The question, though…. I don't know if the Minister of State for Mining is quite thrilled with the idea of speakers getting up, or the minister responsible wanting to move, to speak after I speak and finish my remarks momentarily.

Interjection.

M. Farnworth: But there are other speakers. There are many other speakers. The real question is: do I, as standing speaker here, wind up my remarks at the time it adjourns and reserve my place to speak again, or do I continue speaking for probably another 15 minutes, until 25 after?

Anyway, as I said, the issue of common property, I think, is an important issue that needs to be addressed in this bill and isn't.

The other one is the right of an owner….

Interjection.

[1810]

M. Farnworth: It's still a problem. There are problems around the issue of a definition of common property, Minister. You may be satisfied with the definition that's there. We're not satisfied with the definition over here. That's why we're having this debate.

The other is that it fails to embed the right of an owner to attend a strata council as an observer, as provided in section 17(3) of "Standard bylaws." So again, as an owner, you should have that right. You should have that right.

Hon. R. Coleman: Why didn't you do it?

M. Farnworth: The minister says: "Why did you not do it?" Well, one could easily just say to the minister: "Why have you not done it in this piece of legislation?"

As we know, that side of the House does tend to think of themselves as knowing everything. If only they were in power forever, all things would be solved, and all problems would be corrected and all wrongs righted. But as we know on a day-by-day basis, that is simply not the case, and the fact is, this proves that they don't know everything. That is, the right of an owner to attend a strata council as an observer is not embedded in this piece of legislation.

Hon. Speaker, noting the hour and the fact that I note the Committee of Supply has risen and not wanting to keep the committee Chair standing too much longer when I know that he does like to be in his seat as opposed to standing, I will reserve my place in the debate and move adjournment of the debate.

M. Farnworth moved adjournment of debate.

Motion approved.

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

Hon. C. Hansen moved adjournment of the House.

Motion approved.

Mr. Speaker: This House stands adjourned until 10 a.m. on October 5 — Monday.

The House adjourned at 6:12 p.m.
[ Page 838 ]

PROCEEDINGS IN THE
DOUGLAS FIR ROOM

Committee of Supply

ESTIMATES: MINISTRY OF FORESTS
AND RANGE

(continued)

The House in Committee of Supply (Section A); H. Bloy in the chair.

The committee met at 2:32 p.m.

On Vote 31: ministry operations, $464,137,000 (continued).

L. Popham: I have a clarification question.

I'm wondering if there's a specific policy within the ministry that directs procurement contracts towards B.C. produce. If there is, I'd love to see that in writing. The reason that I'm bringing this up is because when I've been reading about your legislation for wood first, I think that maybe we could move that way as far as food first in B.C. I'm just wondering if you're taking those steps.

Hon. P. Bell: Both the Trade, Investment and Labour Mobility Agreement and NAFTA would prohibit a requirement for a local food purchase of that nature. However, we do encourage all of our suppliers to purchase products directly wherever possible.

B. Simpson: I'll cede the floor.

N. Simons: I thank the member for Cariboo North, and thanks to the minister for his ear.

I have a question with respect to an ILMB referral letter sent to the Sunshine Coast regional district with respect to Freil Lake, a proposed independent power project. I'm just wondering if the ministry has changed its policy or if it's changed its practices on informing first nations within whose territory those projects occur, because as far as I know, the Sechelt Nation has not received any notification of the plans.

Can the minister explain whether that might have been an error or if that is, in fact, a new policy?

Hon. P. Bell: In fact, our government, the integrated land management bureau, takes very seriously the import of consulting with first nations. I'm not familiar with the specific project nor the letter that the member refers to. If there was an oversight…. I don't know that, but if there was an oversight, certainly that should be corrected and would be corrected. We will follow up for the member opposite and get back to him over the next few days.

B. Simpson: I would like to pursue some questions of a specific nature of files that are active on the minister's desk, or most likely active on the minister's desk. The first has to do with the former Pope and Talbot mill in Mackenzie. I would like the minister to clarify who the current registered owner of that mill is.

[1435]

Hon. P. Bell: I believe there are actually two companies. Worthington Mackenzie Inc. and maybe Worthington Land Inc., or something like that, are the current registered owners of those companies. I believe that the structure is set up in a way that some of the assets are held in one company and some are held in the other company.

B. Simpson: Just by way of context for people who do happen to pay attention to this, and particularly people of interest in the Mackenzie area who are asking us to get some clarification around these things, the opposition had to bring into the Legislature, through question period and other means, the fact that Pope and Talbot, when it declared bankruptcy, declared bankruptcy back east.

There were a lot of small players — community, small business, contractors, etc. — that were very concerned about the fact that they could not file. Pope and Talbot didn't have any assets anywhere in Canada other than British Columbia. So through question period — and it's on the public record — we made demands of this government to actually get them to file in British Columbia, and the government put a motion forward to that effect. It was filed in Vancouver.

We then had to go back into question period and ask questions about the government's position with respect to the bankruptcy and PricewaterhouseCoopers and the court, because there was a lot of public interest that was required to be protected during these proceedings. The particular CCAA proceedings were designed to protect public interests and to protect the non-financial interests. That's why that process was designed in Canada.

The government finally did appoint some lawyers and had some lawyers present to take a look at the public interest.

One of the questions that we have around this — and it's a question that I'm sure is not a surprise to the minister — is how on earth a convicted money launderer ended up buying a pulp mill asset in British Columbia?

I wonder if the minister could answer that question for all British Columbians about the nature of the due diligence that this government did when a major asset in the forest industry was about to be purchased — an
[ Page 839 ]
asset that if not handled well, had all kinds of environmental implications, as we have seen play out since it was purchased by Worthington.

The direct question to the minister is: how did the government allow a convicted money launderer to buy a pulp mill in B.C.?

Hon. P. Bell: I just encourage the member opposite to be a little careful of the language he chooses, or there may be some consequences of that, I suppose. But that's for him to decide whether he wants to follow that advice or not.

I will just remind the member opposite that it was a court-ordered sale, that the provincial government doesn't play a role in those decisions — that there is a division between court processes and political processes of government. The Supreme Court of British Columbia ordered the sale and the transaction. Because there was not a tenure that transferred with the pulp mill, there was no role for me as Minister of Forests to play in that transaction.

B. Simpson: Just to set the record straight, in 1997 Dan White became the principal of Worthington at the time and stated as such on the public record that he was a principal of Worthington, which in the court documents and PricewaterhouseCoopers-monitored documents was a numbered company. It took a while to figure out who the numbered company was.

But this Mr. Dan White was…. Sorry. He wasn't convicted — my mistake. He pled guilty to charges of money laundering and cigarette smuggling in 1997. He was fined $267,000 and received a conditional six-month sentence that he served in Edmonton, which I believe is his home base.

If the minister wants to warn me about something, then I'd like a clarification of it. This is the public record. A small Google search by the government's lawyer who was witness to the proceedings on behalf of the Crown….

[1440]

Now, there may not have been a tenure involved, but two things are at play here: (1) this was a huge potential and environmental liability if it did not go to a company that knew what it was doing; and (2) this was in the minister's own riding, and there were just under 300 jobs at stake if it was not a legitimate company buying it.

Is the minister saying today that this government takes no interest whatsoever in what happens when a major purchase of this nature, with public safety implications and community stability implications — that the government takes no interest whatsoever in looking at who is going to buy those kinds of assets? Is that what the minister is saying?

Hon. P. Bell: The member opposite is a knowledgable individual, and I'm sure that he understands the division between the responsibilities of the government and the responsibilities of the courts and how that plays out. Had there been a tenure involved in this particular transaction, there would have been a role for me to play, and there would have been an opportunity for us to review the transaction in a different light. But this was a court-ordered sale. Certainly, the court had all of the various tools available to them that the member opposite already mentioned.

We respect the division between courts and government. We think that's appropriate.

B. Simpson: I will get to the tenure shortly, because as the minister well knows, this government gutted the government's oversight of tenure in this province. The minister, as his former colleague admitted…. His hands are tied when it comes to tenured transfers, but we will deal with that shortly.

In this case, maybe the minister could inform us, through his staff: what was the contingent liability on the Pope and Talbot pulp mill that existed at the time that was a liability to the Crown? What was that contingent liability that needed to be protected?

Hon. P. Bell: I would just ask the member for clarification. We're unclear what exactly he's asking — a contingent liability…. Perhaps he could clarify what he's trying to get at, and we can answer the question more fully.

B. Simpson: In Pope and Talbot's report to shareholders…. It reported to their shareholders, prior to declaring bankruptcy, that it had a liability to the province of British Columbia for some environmental complaints and environmental findings that were against the company at the time. It was a real liability that they were holding on the books and had to declare to their shareholders.

It had to do with putting that in abeyance, provided they were proceeding with the green energy company that was trying to put a co-gen into place in Mackenzie. But the issue here is that the Crown is actually a registered entity with the CCAA filings. One of its jobs in the case of the forestry is to look at things like silviculture liabilities and silviculture obligations that move on.

Those are all part of the proceedings with PricewaterhouseCoopers. In this case, there was a Crown liability that was outstanding with Pope and Talbot over some environmental issues that Pope and Talbot had accrued.

Hon. P. Bell: Pope and Talbot in Mackenzie didn't have any tenure, so there'd be no silviculture liabilities. I don't think that's what the member meant. I am guessing that if there is a liability, I'm unaware of it. It could have been a Ministry of Environment order, perhaps. If so, that could be canvassed under that minister's estimates period. But we're not aware, amongst the executive, of
[ Page 840 ]
any contingent liabilities or any liabilities that Pope and Talbot had specifically in Mackenzie.

B. Simpson: If I understand the minister correctly…. I am aware that there was no tenure. There was a fibre supply agreement, and I'll canvas that shortly, but there was no tenure involved in this.

There are, again, the CCAA filing processes to ensure that the public has a voice in the court. The Crown is the agent of the public when it comes to public safety and when it comes to environmental liabilities and Crown liabilities. The Crown would have been there, for example, on any back taxes that were owing or anything like that to protect those interests.

[1445]

In this case, the argument that is being made is that the Crown had an obligation to find out who this numbered company was. I guess the minister is saying that the Crown has no obligation. So the people of British Columbia have no protection in a bankruptcy case with a major liability, an environmental catastrophe in the making, if you get somebody in there that doesn't know what they're doing. I guess from the minister's own words — oh, well, let's see what happens.

This case gets curiouser and curiouser. The minister, who was not Forests Minister at the time, made a public statement. I believe it was August 12, 2008. The numbered company, listing Dan White, president of Worthington Properties as the sole director…. This is the man that pled guilty to money laundering, etc. So that's August 12.

On August 21 in a radio interview, the minister said: "We have a new player in the pulp industry. I think it's particularly good news and adds value to Mackenzie and certainly to the entire province." In that clip the minister actually indicated that Worthington was a very credible new player in British Columbia.

My question is: on what basis did the minister make the determination that this was a very credible new player in the pulp industry?

Hon. P. Bell: Worthington had expressed a very specific operational plan to get the mill up and running. They paid $6½ million to acquire the asset, and they did have a history of some success in property development and particularly over contaminated sites in Alberta. We were hopeful that we'd see things move forward. Of course, that hasn't been the case.

B. Simpson: Was this a meeting in person with Mr. White?

Hon. P. Bell: I'm not entirely sure how this relates to the estimates of the Ministry of Forests, but I'm happy to answer the question for now, anyways. I have met with Mr. White probably four times or so, I believe, in that range, including most recently with legal counsel in attendance.

B. Simpson: It does relate to the minister's actions during this last fiscal year. It does relate to the operations and the cost to government, because as we have argued in the House, if the government ends up with this asset because they mismanaged the transfer of the asset to a numbered company, then the taxpayers are on the hook and that impacts all of the government's budget — if we end up with a major liability of having to shut that site down, clean it up, etc., if this whole things comes apart.

It has significant implications that are budgetary in nature. That's what estimates are about. It has significant implications about how the government, under the Ministry of Forests, protects the Crown from a public perspective and protects — as we'll see, because this is all related, as well, to what's happening with the Crown asset — the public forest in Mackenzie.

When was the first time that the minister had the meeting with Mr. White in person? When was that meeting?

Hon. P. Bell: Mr. Chair, I fail to see how this is relevant to the estimates, and I'd ask for direction from you.

The Chair: Member, you have to draw all the questions back to the estimates that we're debating, for finishing this year.

B. Simpson: I just did that. I just made a rationale.

The Chair: I know. I'm asking you to direct your questions, to word the actual question, back to the estimates for this year. That's what I'm asking you to do. Otherwise, I'll rule the questions out of order.

B. Simpson: Okay. With respect, Mr. Chair, let me go, then, to the current status of the mill. I guess my reference to meeting Mr. White in person is because I met with Mayor Stephanie Killam, and I met with the people who were with Green Energy, and they said in both cases that at their first meeting with this Mr. White, they would have never called him credible. This is in the minister's own riding.

With respect to what's happening just now, does the minister consider Worthington to be a credible player today?

[1450]

The Chair: Member, if you'd like to continue with your questioning.

B. Simpson: I did ask a question, Chair. I'm asking the minister if he considers Worthington to be a credible player today.
[ Page 841 ]

The Chair: That's a hypothetical question and….

B. Simpson: It's an actual question.

Mr. Chair, how is this? Does the minister believe that Worthington has a viable operational plan for Mackenzie pulp?

The Chair: If you'd like to continue with your questioning, Member.

B. Simpson: I certainly will.

We don't know if the minister thinks they're credible. We don't know if he believes that they have a viable operating plan. Is the Ministry of Forests involved in any negotiations whatsoever with Worthington pulp about the future of that pulp mill?

Hon. P. Bell: Again, I guess I fail to see the relevance as it relates to the topic of today's discussions, but I can tell the member opposite that we are not in negotiations with Worthington.

B. Simpson: Well, it's very relevant to the 300 or so people — 267, or just under 300 people — that are wondering what the future of Mackenzie pulp is. As far as I know, pulp comes under the Ministry of Forests domain, so one would think that the minister would be highly involved in the future of that mill.

I wonder if the minister could tell us who, then, is the lead in negotiating or determining the future of that mill. For example, there was somebody kicking the tires, representing a Chinese company apparently, recently. Who takes the lead in those kinds of negotiations, those sales pitches, etc.? Who's leading the way on that now?

Hon. P. Bell: Mr. Chair, the member opposite is on a fishing expedition that's not appropriate. This is a very difficult period of time in Mackenzie and in the challenges around Mackenzie, and I would encourage him to move on to other topics of tenure. He indicated earlier that he has questions on tenure or on linkages to fibre supply.

The Chair: Member, the minister has responded to your questions. If you'd like to continue with another line of questioning.

B. Simpson: Again, I will move on to some other questions on Mackenzie. I guess I need confirmation from the minister that this is not an active file on his desk, because estimates debate in its broadest sense is whatever the minister is actively involved in. It's not just what's in their service plan.

If the minister is actively involved in Worthington's operations, in the future of the Mackenzie pulp, that is by all historical evidence that I've seen a legitimate set of questions for estimates debate. So I seek the ruling of the Chair that if the minister is actively involved in this file, I believe I have the right to ask questions about this file.

Hon. P. Bell: The member opposite should know that at this point in time there is an environmental emergency management order in place. That order is in place from the Ministry of Environment, and it is the Ministry of Environment that has the authority to take the actions that they have to this point in time. So the lead minister in terms of the current actions that the Crown is taking on that particular site is the Minister of Environment.

B. Simpson: So for clarification on that, my understanding of this emergency management order is that the Crown has taken over responsibility for this asset, hence, my line of questioning. The Crown is inheriting this asset. They are running it to maintain public safety. They are making sure that that asset is there as an asset that can be used to recoup any costs associated to government.

Maybe the minister could clarify this. Is there any impact on Ministry of Forests operational budgets of continuing this emergency management order?

Hon. P. Bell: No, there isn't any impact against the Ministry of Forests budget.

[1455]

I should clarify for the member opposite, though, that the Ministry of Environment is in there to mitigate the risk of any environmental impacts. They do not have the authority to stay on that site and to do anything beyond eliminating the environmental impacts, which included removing the chlorine dioxide, the black liquor, the green liquor, the white liquor and other associated chemicals and making the plant safe. So they do not have the authority to spend ongoing funds on that site beyond those processes.

If the member opposite wants to get into a kind of detailed line of questioning, that would be more appropriately asked of the Minister of Environment.

B. Simpson: So for clarification for the public record, the minister, either in his capacity as Minister of Forests or in his capacity as the MLA for that area, is not involved in attempting to find a buyer for Mackenzie pulp. Is that what I'm hearing him say?

Hon. P. Bell: That would be incorrect. That is the first time that the member has asked that question. We are certainly very interested in trying to find someone who would be interested in purchasing that mill.

B. Simpson: So is that an active role? Again, I'm trying to understand the government's role, because my
[ Page 842 ]
understanding of how this has proceeded is that the deal has closed as far as the bankruptcy was concerned.

Worthington now is the registered owner of that entity, and it is a pulp mill, which then crosses the bounds between the Ministry of Forests and the Ministry of Environment. As far as I understand it, it's out of the hands of PricewaterhouseCoopers, and it's out of the hands of the court. It's now in the hands of — who? That is what we're trying to understand. That is what the community is trying to understand.

This Worthington company appears to be a shell that is amorphous and nobody can pin down. We've got lawyers looking at the legal ramifications of it, etc.

What people want to understand, through us asking the questions in here, is: who is looking after the interests of that mill, and who is actually actively seeking a buyer for that mill?

I'm hearing the minister is involved in that, but is the government actually taking the lead in some capacity on that?

Hon. P. Bell: Mr. Chair, I'd ask for a five-minute recess.

The Chair: Committee A will recess for five minutes.

The committee recessed from 2:57 p.m. to 3 p.m.

[D. Horne in the chair.]

B. Simpson: Chair, welcome to the chair.

I'm going to stay in the Mackenzie area, and for a variety of reasons, we're going to move beyond Mackenzie pulp at this moment. I do want to take a look at another company in the Mackenzie area that is in serious trouble, AbitibiBowater.

I want to talk to the minister about the status of AbitibiBowater as he understands it. Again, there's lots of disinformation, incorrect information, out there. What is his understanding of the status of AbitibiBowater's assets in Mackenzie?

Hon. P. Bell: As a matter of public record, of course, AbitibiBowater is in creditor protection at this time. The Mackenzie asset is impacted by that. I understand that Abitibi is actively seeking a purchaser for the sawmills, in particular. It is a little less clear to me whether they are as actively seeking a purchaser for the paper mill or whether the paper mill will be disassembled at some point in time or in some way made incapable of utilizing it as a newsprint mill.

But my understanding is that there's an active process going on in Abitibi in the restructuring effort to sell that asset.

B. Simpson: My understanding is that Abitibi has been fairly explicit about the paper mill. They don't want it competing with them when they've got a demand-side issue in the marketplace.

With respect to Abitibi having licences in that area, I'm wondering if the minister, for the sake of the public record, could indicate the nature of the licences that Abitibi has under its control, the volume it has under its control and what the status of those licenses are.

Hon. P. Bell: Just coming back briefly to the paper mill, the reason why I said it's a little less clear to me is for two reasons. One is that when I originally discussed the opportunity for the Abitibi mill with the CEO of Abitibi, he indicated to me that if the paper was to go offshore, he would be willing to at least consider a sale of that particular property. Second of all, it's a little unclear to me in a creditor protection type of arrangement if the company has the same authority to place criteria of that nature.

Although I think that the member has correctly articulated that in all likelihood Abitibi would prefer to not see that mill back up and running, there are, for a variety of reasons, I think possibilities still around that, although nothing may come of that.

The member asked specifically with regards to the Abitibi licences in Mackenzie. Abitibi holds a replaceable licence for 932,500 cubic metres per year. At this point in time, all of those forest licences are in good standing, and the silviculture obligations have been met.

B. Simpson: A couple things. I was referring to what Abitibi had initially indicated, so I appreciate the minister's clarification of the nuances around the deal.

Now the minister, I just want to clarify, said "all of those licences." Is it a single replaceable forest licence that they have, or are there multiple licences involved?

Hon. P. Bell: I'm advised that it is a single licence.

B. Simpson: That's my understanding as well — just under a million cubic metres. It's a replaceable forest licence, expiry out to February 2022.

With respect to being in good standing, I wonder if the minister could clarify for the public record what the requirement is to remain in good standing with a replaceable forest licence?

[1505]

Hon. P. Bell: There's a series of things that are required in order to maintain a licence in good standing, from initial silviculture requirements right through to free growing. So there's a variety of time frames that are associated with that — different surveys that take place during that period of time, all fees have to be fully paid, the annual rent needs to be fully paid and any compliance and enforcement actions would have needed to be acted upon. So all those kinds of things would be necessary.
[ Page 843 ]

If the member would like more detail on that, we could provide that to him.

B. Simpson: What are the harvesting requirements during the time that they hold a licence?

Hon. P. Bell: It's what I refer to as five years. Use it or lose it. So if they haven't harvested some of their annual allowable cut during that period of time, then it goes into undercut volume, which can be disposed of in a number of different ways by the district manager or through B.C. Timber Sales opportunity.

B. Simpson: Again, this may seem to some people in this room as splitting hairs, but as the minister well knows, it's not up in that area because there are a lot of people who are not working.

The document that I have in front of me indicates that in '07, Abitibi harvested 541 million cubic metres — give or take.

Interjection.

B. Simpson: Oh yeah. Sorry, I didn't see the dot. So just over half a million cubic metres.

They've now, in '08, harvested about 10 percent of that. So what constitutes a "use it or lose it" for the ministry? When do you kind of kick that in?

Hon. P. Bell: The cut control period is defined in the licence. It's five years, and there would be a specific date at which they would hit that cut control period. I am really getting into dangerous territory here because I'm going off the top of my head on that particular licence.

I think its cut control period comes up in the next year or two, and they do have an undercut situation which would then return to the Crown at that point in time, whatever the volume happened to be. The member opposite said that there was about 10 percent. I'm guessing that is 50,000 metres or so.

That would indicate an undercut volume in that year of about 900,000 cubic metres. That 900,000 cubic metres would come back to the Crown for disposition under the direction of the district manager.

B. Simpson: But the licence would still remain with Abitibi as an asset on their books. Is that correct? It's only the undercut that would be pulled back, and they would still continue to have the licence as a defined asset on their books.

Hon. P. Bell: That's correct.

B. Simpson: So what I'm getting at — and the member is well aware that this is the buzz up through that area — is that the forest licences in the province of British Columbia…. The Crown acts as the agent for the public. The public owns the forests. The public has an expectation of deriving benefit from the forests at the community level — jobs, good environmental stewardship, good silviculture, etc.

We have a company that is going through various forms of financial struggles, bankruptcy protection, etc. It has got assets in Mackenzie that it has got up for sale, but — critical to the people in Mackenzie — it's sitting on wood. It's sitting on a licence that is not accruing any benefits to that community.

We saw what Danny Williams did back east in terms of Abitibi immediately when he believed that Abitibi was not fulfilling its side of the social contract.

Has the Minister of Forests had any discussions with Abitibi about the nature and the future of those forest licences, and seeking from them a commitment that the community of Mackenzie and other surrounding communities would begin to get benefits from that forest licence? Have any of those discussions occurred?

Hon. P. Bell: Yes, I have.

[1510]

B. Simpson: What's the nature of those discussions that the minister can share with people on the public record? Is the minister asking them for their go-forward plan, for their harvesting plan? What's the nature of the discussion?

Hon. P. Bell: I have been encouraging Abitibi to find a way either to bring that asset into production or to sell the asset to someone who is prepared to bring it into production. We've had a series of discussions, or a number of discussions, along that vein.

B. Simpson: Let's be really clear. What asset are we talking about? Are we talking about the forest licence as an asset? Or are we talking about the mills? It has to do with the next line of questions that I have. So what does the minister mean by asset?

Hon. P. Bell: The mills — a little less clear again on the paper mill. I understand that there are mixed feelings in terms of the reopening of that particular operation. The bulk of the discussions have revolved around the sawmills specifically. Certainly, we would be encouraging them to consider the paper mill as well, but I do understand their circumstance.

B. Simpson: Under the current Forest Act, what is the minister's understanding of Abitibi's ability to either sell the sawmills as entities without fibre or sell the forest licence without the sawmills? Does Abitibi have the right under the current Forest Act to sell that forest licence as
[ Page 844 ]
a freehold, quasi-private asset to another company that would be interested in it?

Hon. P. Bell: They do have that authority, subject to a couple of constraints. One of those constraints is that there not be an undue reduction of the competitiveness in the environment — that there needs to be adequate competitiveness and subject to first nations consultation.

The Chair: Member, before we continue, just a reminder of the relevance of the questions as to the minister's estimates and the motion before the committee.

Continue on.

B. Simpson: Thank you, Chair.

It has to do with the government obtaining money from harvesting what is a Crown asset, given that in the estimates this ministry is losing money like crazy. B.C. Timber Sales is losing money, the ministry is not recouping its costs, and you have an asset called a forest licence in the Mackenzie region that is not being harvested, and therefore, not returning value to the Crown.

Secondly, it has to do with acts that are governed under this minister, and acts are part of estimates debate. It's how that act works its way out. In this case, there are serious questions about whether or not this government has privatized the public forests through how they've made changes to the forest licence. So that's the context for asking the questions.

The minister has indicated that AbitibiBowater has the right to sell the licenses. I would like to go to Kamloops and come back, because the minister has in front of him, as I understand it still, the Weyerhaeuser forest licence sales in the Kamloops area. I wonder if the minister could update us on the status of those forest licenses.

Hon. P. Bell: The member indicated that I have a decision in front of me. That's not correct. I don't have that in front of me yet. It is in the ministry, and the ministry is reviewing the application for tenure transfer. It involves the Weyerhaeuser licence transfer, and the two companies that are currently looking to purchase that tenure are Interfor and West Fraser.

B. Simpson: This is a very important line of questioning for the public to fully understand the nature of forest tenures in the province of British Columbia, because the changes made in 2003 are now beginning to be put into play. What's happening is that we're seeing a major concentration of the forest licences, which has significant implications for operational mills in communities, for community benefit, etc.

[1515]

In the case of the Weyco licence transfers, I think that it's news to some people that the order isn't sitting on the minister's desk, that it's still making its way through. But that one caught everybody by surprise in the area of Kamloops, because Weyerhaeuser announced the sale of those licences when they announced the closure of their mill.

It was the first time that anybody found out that that licence was even up for sale. They announced they were selling it to West Fraser.

Now, in my canvassing of that with the previous Forests Minister — again, through question period and other means — I was told that if there was no partitioning of the licence, the minister had no say in the transfer. I seek clarification on that from the minister.

The only reason, I was told, that the Weyerhaeuser licence wouldn't possibly have to go to first nations consultation was because West Fraser indicated they were going to partition the licence off right away and split it up with Interfor. I would like clarification on that. What is the trigger for first nations consultation on licence transfers?

Hon. P. Bell: The competitiveness aspect of tenure transfer has been there all the way along, and that review takes place. So when a licence is transferred — just as an example, in Mackenzie….

I know we're going back a bit here, but in Mackenzie, if Canfor were to apply for that licence, it would be challenging, because that would give them two-thirds of the total volume in the Mackenzie TSA under their licence. It would be a challenging one to approve.

In terms of the decision-making process…. In terms of the competitiveness aspect, that's been there all the way along. In terms of first nations consultation, that has very much been an evolving process.

Two or three years ago when the member opposite asked the minister of the day whether or not…. I don't know whether the question was whether he was consulting with first nations or not; I haven't looked it up. But he would quite correctly have said no at that point.

So first nations consultation is an evolutionary process. There have been a number of decisions in the last year or so that led me to believe, upon that request of the first nations in the Kamloops area, that it would be appropriate for us to engage in a consultative process.

We did start that process, but then the potential individuals that were involved in that tenure transfer asked us to stand down. The dynamic of the transaction changed, and so we backed off. Now we're back into that consultation process.

It is very much an evolutionary process, and each court decision, I think, guides us and directs us more effectively in where we need to go around consultation. What we know today…. We could be sitting back here a year from now, and I might provide the critics with a
[ Page 845 ]
new and different answer. It wouldn't be because I was wrong this year or that I was right next year. It would simply be the state of case law and the evolution of that case law.

B. Simpson: I want to be crystal clear on the first nations issue. As I understand it, there's no legislative requirement for first nations consultation on licence transfers or purchases.

What the minister is indicating is that they have to go to jurisprudence and figure out what the lay of the land is. But I want to be clear that it's not a legislative requirement, either in the tenure or in the Forest Act — is that correct?

Hon. P. Bell: That's correct.

B. Simpson: And there is no legislative requirement for community consultation in the Forest Act — is that correct?

Hon. P. Bell: That's correct.

B. Simpson: Yeah. Well, there was. And that's the rub.

[1520]

When this government took away appurtenancy and when it took away all the requirements for public consultation…. What is happening now is that they have effectively made these forest licences freehold assets for these companies. There used to be a 5 percent clawback. There used to be a requirement for an examination of the job impacts and the community impacts.

All of those things were mandatory requirements. And what we have now is the end-game playing out, where these licences are going to be collapsed down into one or two companies that move wood around. And that's where I want to go.

Before I go there, I want to clarify on the competition component, because the minister says that he might struggle if Canfor was looking at Abitibi. But again, his predecessor established one of the worst forms of monopoly on the coast with Western Forest Products by allowing Canfor and Cascadia Forest Products to collapse into Western. Now you've got a significant problem on Vancouver Island and the whole coast because the minister didn't get involved at that time.

But maybe if the minister could let us know: is he aware of West Fraser having negotiations with Abitibi for that licence?

Hon. P. Bell: I have heard through third-party interests that West Fraser has had discussions with Abitibi, but I have not been a party to any meetings or direct discussions or anything of that nature. So when the member…. I always try and answer a question truthfully. Am I aware of it? I have certainly heard the rumours that West Fraser is interested. Do I have direct knowledge of a negotiation going on between Abitibi and West Fraser? No, I don't.

B. Simpson: With respect…. Again, the context for this is that the future of Mackenzie is dependent upon what happens with the fibre. So whether sawmills can operate or whether pulp mills can operate, it's all about the fibre. If that fibre is free to move, the capitalized mills, the new mills, the mills that have had all the upgrades, are on Highway 16 and Highway 97. They ain't in Mackenzie. And it's within the domain of the Forests Minister to make determinations about the future disposition of that public asset in the Mackenzie area.

There will be decisions potentially forthcoming that have impact for all of the people in Mackenzie, and the people of Mackenzie want to know the disposition of those licences. So it's within the purview of the minister's current operations that these take place.

I know it's a bit of a scenario, but let me see if I can ask the question in a specific fashion. It's almost a million cubic metres of wood, which most people say is good, healthy wood. What part of the problem is with operating up there is that the stumpage tends to be higher because the wood value is higher. It's just out of the mountain pine beetle zone for the most part. So there are a lot of companies salivating over the nature of that wood and the licence that Abitibi is sitting on.

If another company, another entity, purchases that licence…? Let me ask it twofold. Can they purchase it without the sawmills — and I know that the minister has already indicated that — and can they move the wood out of the Mackenzie area?

Hon. P. Bell: I previously answered the question in terms of, "Can they purchase the licence with or without the sawmill?" and the answer to that is yes. The second question is: "Can they move it out of the Mackenzie area?" I suppose the answer to that is that technically, they could, but there's a significant economic disadvantage to that. There is a system that we have in place called point of appraisal that allows a company to reduce their cost of that wood through the transportation of that wood to the closest mill.

That closest mill in Mackenzie's situation, of course, is Mackenzie, because the wood that is in the Abitibi licence is located on the side of Williston Lake, so it has to flow through Mackenzie. If a company were to purchase that wood and transport it beyond Mackenzie, 100 percent of the cost of that transportation would be borne against that wood, so it would significantly increase the price of the delivery of those logs to wherever they were to take them.

[1525]
[ Page 846 ]

The point-of-appraisal system has been in place for some time, and we strengthened it in 2003. The criterion around that now is that a mill has to…. There cannot be a mill at the location of the point of appraisal that is capable of producing lumber for a minimum of five years before that point of appraisal can be removed.

So in Mackenzie's situation, Canfor is currently operating, and Abitibi is capable of producing lumber. So that five-year clock would not have started to tick. Even if someone were to go into Abitibi, remove all the assets or make them incapable of producing lumber, the Canfor mill would still be there, and so the wood would still be linked to that location.

The point-of-appraisal system protects the interests of the communities and ensures that that wood will flow into the community. I would expect to see lumber manufacturing continuing in Mackenzie for well into the future.

B. Simpson: With respect to point of appraisal, is the minister in discussions with Council of Forest Industries or any of the other forestry associations or companies about changing that point of appraisal and removing that requirement?

Hon. P. Bell: No, I'm not.

B. Simpson: Well, the member for Columbia River–Revelstoke and I had some discussions with some folks who suggested that there's some form of discussions going on. Down in the Kootenay area, there are certainly some serious problems with point of appraisal with respect to B.C. Timber Sales. It was raised with us three or four years ago.

There are discussions in that whole Prince George area about collapsing wood flow to Prince George, so I find it a bit surprising that there are no discussions of that nature. Again, with the point of appraisal, it's the last legacy of appurtenancy. That's what it really is, because it at least attempts to keep wood where there's manufacturing capacity. But are there ways that companies have found around it?

I want to clarify something that the minister said, because the full cost is from the mill to the next mill. My understanding is that they still get the benefit of moving it to Mackenzie, and it would only be beyond Mackenzie that they would have to pay the incremental costs.

We know that Dunkley Lumber, for example, has been able to absorb that cost into their mill operations for a long time and has very high landed wood costs as a result of that. That doesn't stop people from shipping the wood out; it just makes it financially a problem.

Are there ways around that, which are currently active? Canfor, for example. We hear lots of complaints about wood from Mackenzie — Canfor's operations moving down into the Prince George area and not feeding the mills in Mackenzie. Maybe the minister could explain how some of that wood flow occurs, because the wood does flow out of one timber supply area into another on a fairly regular basis. Is it all punitive? Is it all based on point of appraisal?

Hon. P. Bell: I want to just take one quick step back to my previous answer in terms of whether I was in negotiation or in discussion with COFI or any of the licensees over point of appraisal. My answer was correct. My staff have indicated that oftentimes they are approached by industry to talk about point of appraisal, but it's not on my agenda or my discussion at this point in time. Nor have I been asked to have that put on at a senior level — at an industry, kind of COFI CEO, level.

The second thing I wanted to point to. The member mentioned Dunkley Lumber. Dunkley does not hold any licences in Mackenzie. The wood that the member is referring to, unless they're purchasing wood off of other licences that I'm unaware of, would be sold competitively through the B.C. Timber Sales program.

[1530]

It's a credit to Dunkley Lumber that the Novak family, their loggers and their operation are able to compete in that way with other purchasers of logs and haul it that incremental distance. But I can assure the member that they do not hold licences, and therefore point of appraisal doesn't apply to them.

The second question the member asked was: is there any way around the point of appraisal? I think that was the way he put it. The short answer to that is no. If the volume is coming off of a specific licence, and that licence is designated as a Mackenzie licence, then the point of appraisal goes to that mill in Mackenzie.

If the company elects to move logs from that licence to another mill that they own, or sell it to a mill that they don't own, they would be able to do that, but their stumpage allowance for the trucking component of it would only go to the mill that that licence was assigned to. So there's no kind of way to skirt around that.

I would point out to the member, though, that this has been going on for a long time. Mackenzie was actually the recipient. I was looking back at the statistics for the amount of volume that was cut within the Mackenzie TSA against the amount of volume that was scaled in Mackenzie scaling units, which would tell you how much wood was processed at those mills.

There was quite a number of years where the volume of wood that was scaled in Mackenzie far exceeded the amount that was actually cut there. So wood does move back and forth from time to time between TSAs. The critic, the member for Columbia River–Revelstoke, has a large cedar mill, probably the best cedar mill…. Well, I'd better not say that. Interfor will probably give me a tough time if I said the best cedar mill is Downie cedar in British Columbia — certainly one of the top two in British Columbia.
[ Page 847 ]

I know that particular mill acquires cedar logs from as far away as Haida Gwaii, all up and down the coast. I know that member…. I shouldn't put words in his mouth, but I'm pretty sure the member thinks that is okay — that that is an appropriate model to follow. I support that, because there is only enough cedar in the province for a few good cedar mills. I think Downie does a tremendous job in Revelstoke. I hope they continue on for a long, long time.

So there is some kind of logical shift that goes back and forth between sawmills with regard to the quality of the log, the size of the log, all those sorts of things. We encourage that because it creates a competitive environment.

B. Simpson: The minister must know that the people in Mackenzie are very concerned about part of that natural evolution and transition. It will leave them high and dry with no fibre if they're not careful, if they're not paying attention to what's going on around them.

If I understand the minister correctly, based on what he has said, that Abitibi basically in that area…. It isn't Canfor buying it. It will probably meet the competitive test, and it's really only an economic question of whether or not the company that wants that wood can afford to transport it from Mackenzie to wherever they want to mill it, and that wood isn't available to Mackenzie. That's my understanding of what is potential in that area.

It's a fear that people have in that area, and the minister must know that. The reason I raise Dunkley is not because they had forest licences in that area. It is because they have proved there's a business model that works, which pays more for transportation of logs. So it's not impossible for that Abitibi licence….

I guess what sticks in people's throats is that these forest licences were never supposed to be cash-accruing assets for companies to use as part of bankruptcy proceedings to pay off Wells Fargo, in the case of Pope and Talbot, or whoever it is AbitibiBowater owes money to. They were supposed to accrue benefits in the way of jobs and community benefits, etc., and that's what the fear in Mackenzie is.

The minister has mentioned Canfor a couple of times, so let's turn to that. Twice now the minister has made arrangements in some capacity — and that's what I'd like to explore — for Canfor to get access to wood to keep their mills running.

[1535]

Once, when they first announced that they were going to shut their mill down, the minister as MLA intervened in some fashion, got some wood available to them, I believe through B.C. Timber Sales, and got an announcement that they were going to run again. Then they shut down.

Secondly, during the election window, an announcement was made that Canfor was going to take one shift back up again, and there was some arrangement made for them to get reduced stumpage.

I'd like the minister to explain on the public record: what was the arrangement with Canfor that caused them to get some kind of a reduced stumpage on their logs?

Hon. P. Bell: First of all, to go back to Canfor and Mackenzie, Canfor and Mackenzie made a conscious decision that they would purchase more volume through the B.C. Timber Sales program. B.C. Timber Sales has a specific quantity of timber that they make available on an annual basis. They've not been meeting their objectives. They continue to put up sales and sell them on a competitive basis, and that was the decision under which Canfor chose to continue to operate the mill the first time around.

The second time around, they continued to look to BCTS as a primary timber supply unit. We've also been looking across the province at all of the modelling around our stumpage system to ensure that the input data is correct and fulsome.

One of the challenges in Mackenzie simply has been not selling enough wood historically and particularly with the mill closures over the last few years. So anything that we have been doing revolves around the B.C. Timber Sales program to simply sell more wood competitively or would be of a technical nature.

B. Simpson: The first time it was characterized to me by people who know that end of the game a lot better than I do, a large volume sale was put out that only Canfor could possibly bid on, and because of the nature of the volume, etc., they were able to get their prices down.

Again, I wonder if the minister could explain the technical adjustments that were made. As the minister well knows, the day after or two days after the minister stood with Canfor and made that announcement, we got an immediate charge by the Coalition for Fair Lumber Imports that this is proof positive of stumpage reductions that are not mandated by pre-existing stumpage rules, and that that's a violation of the softwood lumber agreement.

In their estimation, there was an administrative adjustment to stumpage in order to facilitate a mill opening. The minister has indicated that there were technical adjustments made. What's the difference between those two — administrative or technical adjustments for one company in the minister's riding, during the election, so that there was a good-news announcement that people were going to be put back to work?

Hon. P. Bell: I can assure the member opposite that there were no interventions in terms of the stumpage system. There are from time to time opportunities for us to review and make sure that the input data is correct.
[ Page 848 ]

The member opposite suggested that this was for one mill and one area, and that's actually incorrect, because the critic's area also is an area that is affected by our assessment or ensuring that all the input data is correct. The wet-belt area, which the member's riding is located in, is an area that has had various anomalies over the years, and we've had an ongoing discussion around that.

We have a very prescribed process in inputs, and I can assure the member opposite that we would not tamper with any of those.

B. Simpson: Again, I found the timing of the announcement in Mackenzie, in the middle of an election, to be an interesting one, particularly in capacity as Forests Minister, to be involved in such an announcement. I think there were a lot of questions swirling about the appropriateness of taking such a step.

[1540]

Let me close off some of these things around licence transfers. In the case of Kamloops, will the minister commit today to do a public consultation process prior to signing the licence transfers in the Kamloops area, so that the Steelworkers and others in that area get to have a say? They were damaged by the shutdowns. They're going to be impacted by the licence transfers. Will the minister commit that there will be a public consultation process as well as first nations consultation before those Kamloops licences are transferred?

Hon. P. Bell: I am not in a position to make that commitment.

B. Simpson: Is that a constraint by the act, or is the minister just not willing to make the commitment? Is there a legislative constraint on the minister, or is it just an individual choice that the people of Kamloops won't have an opportunity to be consulted before those licences get transferred?

Hon. P. Bell: There's no legislative constraint against me. If I choose to engage in a consultation process, I would have that ability.

B. Simpson: I just want to clarify, then, that the minister is saying that he would not engage in a public consultation prior to signing those licences. Is that what the minister is saying?

Hon. P. Bell: What I said — and I'll repeat it again — is that I'm not in a position today nor would I be willing today to make a commitment of that nature.

B. Simpson: What are the reasons for not being in a position today to make such a commitment? We used to do it in the past. It used to be mandatory.

Go look at the history of TFL 23, the one that this government allowed Interfor to get with no public consultation whatsoever, no clarification to communities about the disposition of the mills in Grand Forks or Castlegar, no requirement for them to let people know what the future of that industry looks like down there.

Yet you go back to the previous time that TFL 23 changed hands — full public consultation. The community had complete and vested interest in what was happening there. That's how the Revelstoke community forest was put in place. There was a guarantee that the mills would run. There were guarantees that jobs would be maintained. There was guarantee that the log flow would remain for those mills.

Two worlds apart, because one government believed that they were responsible to control and manage a public asset for the public good, and we have a government now that believes it is a private holding, and all the Crown does is put a few rules here and there to keep the dogs at bay.

Again to the minister: what is it that you're not willing to commit to? You're saying here today that — what? — you don't have enough information? You don't know the lay of the land? You don't know the nature of the licences? What is it that prevents you from making a commitment to public consultation on the disposition of those licences?

Hon. P. Bell: You know, if I'm not mistaken, TFL 23, which the member was just referring to in such glowing terms, is the one that Interfor bought out of bankruptcy, if memory serves me correct.

Anyway, I don't have a decision note in front of me yet on a request for a transfer. I would make that decision on whether or not I thought it was appropriate to go to a public consultative process at the time that I see the nature of that decision.

B. Simpson: For the minister — the flippant comment around Interfor buying it from bankruptcy. Pope and Talbot bought it from bankruptcy. That's what I was talking about. But at that point a government was concerned about what the people wanted. A government was concerned that there was continued benefit to communities and workers. A government believed that it was a public asset, not a private asset to be traded to pay off Wells Fargo down in the United States. A government understood quite clearly that the public forests are public.

So the minister talks about it in a flippant tone: "TFL 23 was bought by Interfor out of bankruptcy." Yes, behind closed doors, no public consultation. The minister knows that now Castlegar, Grand Forks and everywhere else don't know what their future holds because Interfor is not required to come into the public domain and talk about the nature of its business and what it's going to do and how it's going to serve those communities.

[1545]
[ Page 849 ]

That's why we're asking the question about Kamloops. It has huge implications for that Abitibi licence if this minister is not going to commit to talk to the people who are going to be impacted about the disposition of their public forests in their communities.

That's the difference, I guess, between that side of the House and this side of the House — because we would. We wouldn't have to vacillate. We wouldn't have to have a decision paper put in front of us. We would restore and put in place the requirement that the public is consulted and that these are not private assets that accrue.

It's very simple. The minister is going to get a decision put in front of him as to whether West Fraser and Interfor should get access to these licences. If they do, the wood goes north and south. Kamloops doesn't get the wood or the economic benefits from the wood. I think the people of Kamloops deserve the opportunity to have a bit of say in that. But hey, what do we know on this side about the public forest?

Let's move on to Hampton group. Now, my understanding is that the Hampton group is in discussions with the minister or the minister's office about the amalgamation of timber supply areas in their area. I wonder if the minister could speak on the public record about the nature of those discussions.

Hon. P. Bell: I did a tour of the Burns Lake–Houston-Smithers area a little beyond a year ago, and I received two presentations, one from Hampton requesting an amalgamation of the TSAs and one from another forest licensee requesting that they not be consolidated. I don't recall which one it was. It might have been West Fraser. I'm not sure. I have not pursued it beyond that, although it is quite conceivable that there have been discussions at a district or at a staff level. But between myself or any presentations that I've received or my deputy has received, that's the extent of what we've seen.

B. Simpson: What was the reason that Hampton indicated to the minister they would like to see the TSAs amalgamated?

Hon. P. Bell: A more robust timber supply availability to Hampton.

B. Simpson: In the amalgamation of the TSAs, would it take away the point of appraisal?

Hon. P. Bell: The point of appraisal is built around the licence and the mill. The mill would still be there, and the licence would still be there. I think maybe what the member is getting at is if there was an amalgamation of the two TSAs, there would be an area outside the original TSA that could potentially have been part of this licence held by Hampton. Therefore, would they be able to pull timber from outside the TSA to that mill? I'm guessing that's what the member is trying to get at.

I suppose, in theory, if the TSAs were amalgamated, that is possible, but we've not pursued that option. I haven't had any presentations on that issue for, I'm guessing, over a year.

B. Simpson: My understanding is that that's the issue. If you do amalgamate TSAs, then wood starts moving, and again, communities may be shut out of that process. Maybe the minister could explain why whoever the proponent was or whoever gave the alternate presentation would not want the amalgamation to occur.

Hon. P. Bell: I think for the reasons the member articulated. There would be a certain amount of fibre in the two TSAs, and if you divide it equally amongst all licensees in the two TSAs, people that were perhaps fibre-rich before would end up with less fibre and people that would have had less fibre would end up with more. But again, this is all hypothetical and not something that we've pursued.

B. Simpson: So was it part of Hampton's proposal that they were actually going to run out of wood if this didn't occur? Were they concerned about not just the robustness of the fibre supply but the actual volume of fibre supply available to them if they were still working in that TSA?

[1550]

Hon. P. Bell: In the Lakes TSA, it is dominant to pine timber supply unit, and it was one of the early epicentres of the mountain pine beetle. Clearly, the wood in that area was killed early on.

There has been a fairly significant undercut in the TSA. It is coming up for timber supply review in 2010. The chief forester is not in a position to indicate what his view of that may be. I understand there is a significant amount of dead pine still remaining in the TSA.

In Hampton's situation, hypothetically again, if they were looking to change the model under which they were operating, it would likely be their objective to add a TSA that had more fir, perhaps spruce and balsam stands that have not been impacted. But this is all hypothetical in terms of the discussion and shouldn't in any way reflect any decisions or requests that have been made or are being contemplated.

B. Simpson: According to an article I saw on ForestTalk, it's exactly what Hampton is saying. If we persist on this path, then they believe they run out of viable fibre for their mill. That's why they're looking at alternatives including amalgamation of the TSAs.

That brings me to some of my next line of questions. I see the chief forester has joined, so it's a timely set of questions.
[ Page 850 ]

The minister made a speech — I believe it was on Monday — with respect to the current state of the mountain pine beetle, in which I believe he indicated that there would be a dramatic falldown in the annual allowable cut.

I think the number I had was eight to 12 mills potentially closing, etc. I wonder if the minister could share with all of us on the public record what the stimulus was for him making that speech post-election when, prior to the election….

Here's a direct quote from March 4, 2009, from the minister, based on the shelf-life news that nobody really understood. "What this says to small communities with sawmills around the province is that you are not going to be dead in four, five or six years."

So we go from "Don't worry; be happy" in Quesnel Chamber of Commerce — "I'll hold up the sky" — to the Vancouver Board of Trade, shock and awe — eight or 12 mills close, etc. Now we're into a debate in the public domain about protected areas and about mining our forests under the guise of a working forest.

What was the shift? What was the data set that caused the minister to have such an epiphany?

[1555]

Hon. P. Bell: No shift at all, actually. The information that I released in March is absolutely the case. We continue to build the model in a way that will ensure that the risks that potentially we could be exposed to — of mill closures, of reduced mid-term timber supply — can be mitigated through key strategies like extending the shelf life of the dead volume that we have out there and bringing second-growth stands on earlier.

I will try and enlighten the member. I'm not sure if he cares or not. The specific comments that the member refers to came as a result of a question after the speech was over, from a member of the audience. They asked me to update them on the status of the mountain pine beetle.

I said: "Good news; bad news. The good news is that generally across the province they're in decline with the exception of certainly the Peace area, down in the Kootenays." I did not mention the Okanagan, but the Okanagan is another one of those zones. "The bad news is it's because they've run out of food." In the central Interior — where the member opposite comes from, where I come from — the vast majority of the pine is dead at this point in time.

The conversation went on, as I was being chased down the hall by a media rep, trying to catch a flight, and I indicated to him…. He asked: "What does that mean in terms of mills?" I said: "Well, we're working hard to mitigate the midterm timber supply falldown. We think we can mitigate that."

He had seen the presentation that I had provided to him earlier in the year that shows that we should be able to mitigate that falldown to about 7 percent of the pre-uplift harvest volume of 50 million cubic metres in the interior of the province. That would be a falldown of about 3,500 cubic metres.

He asked the question: "What if you don't do anything?" I said, "If you don't do anything, the base case right now," which I'm sure the member opposite is familiar with, "is about 24 percent falldown or about 12 million cubic metres." He asked the question: "Well, if you didn't do anything, how many mills would that mean?" I said: "The average mill consumes a million, million and a half cubic metres, so you can do the math for yourself."

Nothing has changed. The way the article was written, I think, at least had some semblance of accuracy. If the member read the entire article, he would note that the reporter did indicate that I said we were working hard to mitigate the midterm timber supply falldown.

We were particularly looking at extending the shelf life of the dead pine as much as we possibly could, including some of the things that the chief forester has chosen: particularly a partitioning in the Lillooet TSA would be an example of an action that has been taken; also some bioenergy initiatives that we have taken to mitigate that midterm timber supply falldown; and then looking at a far more aggressive approach to silviculture and bringing those second-growth stands on.

Nothing has changed. It is as it was pre-election except that we have continued to take more actions and be more aggressive in protecting both the dead pine stands, ensuring that we get maximum value from those stands, and then moving further down the road in terms of taking advantage of more advanced silviculture practices.

In terms of the commercial forest reserve that the member opposite refers to — I don't think those were the words he used, but the title certainly that I'm using is a commercial forest reserve — that is an initiative we announced as a government at the Truck Loggers Association. It was in our platform document. We actually just had an election over that, and it is an initiative that we think is worth pursuing.

That particular initiative really focuses on finding small parts of the province that are suitable for a very aggressive form of forest management where we can grow incremental fibre in that area. It would preclude the idea of going into areas where there is particularly important species-at-risk initiatives, other ecosystem management initiatives, watersheds — those sorts of things.

So we're going to be very careful, and we want to work with the environmental community, first nations and local communities to make sure those are located in appropriate areas.

When you take all of that into context, I hope that that provides the member opposite some comfort.

B. Simpson: The minister has just put a lot into his response. Let's go to the working forest concept. When
[ Page 851 ]
will the public consultation commence on the working forest?

Hon. P. Bell: We're referring to it as a commercial forest reserve. We are doing a little bit of internal work right now. I've met with the First Nations Forestry Council and with several of the lead environmental organizations across the province to initiate some discussions.

[1600]

I am hoping that we could see some pilot projects over the next two or three years, but they would be selected in areas where there is broad community support for the initiative, where there is first nations environmental support.

Interestingly, one of the areas that I think may be very appropriate would be in the critic's riding. Those are very good quality growing sites in that area, and it would be one of the areas, I think, that we'd be interested in looking at piloting something of this nature. It is a different form of forest management that we're considering, but we want to do it in a collaborative way.

[D. Hayer in the chair.]

We want to work with first nations, with the environmental organizations to make sure they have confidence in the delivery of a mechanism of this nature.

B. Simpson: So commercial forest reserve. The minister has already ruminated aloud that in that reserve we may remove things like VQAs. We may remove things like their VQOs…

Interjection.

B. Simpson: That's right. I thought I was ready for that soon — always after estimates.

…visual quality objectives and riparian zone management, etc. As the minister already knows, there has been pushback from some members of the environmental community. It has raised some concerns. It did the first time. It has raised it again.

The minister speaks now to the critic's area down in the Kootenays, but I saw an article today that he also ruminated maybe north Vancouver Island is a good place to put this. Again, my question to the minister is: when will there be a public consultation about whether or not this is a direction the public of British Columbia want to go in?

Because, as the minister ought to know, this was floated during the whole forestry revitalization process, as one of the pieces of forest revitalization that was quickly pulled off the table because there was a feeling that it was too much, too fast. There were already changes going on, and there was already pushback on that.

The premise of a commercial forest reserve is a debatable premise. The minister is suggesting that he's going to go to pilots. The public of British Columbia own the forests, not the minister, not the companies. So when will the public of British Columbia be engaged in some discussion of whether or not commercial forest reserves are something that they are interested in having their forest managed as?

Hon. P. Bell: I thought I answered the question, but I'll have another go at it. Any pilot projects that do move forward will be in specific areas where there is broad support — where communities support it, where first nations support it, where the environmental communities in the areas support it. So we're looking for opportunities where we can look to specific areas, and I'm not anticipating these will even necessarily be very large areas. They could be the size of a woodlot, or even less on an individual site or larger in other areas.

I think there's a lot of work to do. I think that the member does point out that there have been various attempts at this over the years. I think I've actually heard the member advocate in the past for area-based management strategies. He and I see alike in that area. I agree that I think that area-based management tends to provide for better overall forest management and greater investment on the land base — perhaps not in all circumstances, but in many circumstances.

Again, not trying to be evasive in any way, it is early on. We want to be methodical about this process and ensure that people are comfortable with the decisions that are made, and I think that is the objective that the member opposite is also articulating.

So I would say yes. The member opposite asked specifically the question: when would the public be engaged and have an opportunity to have this discussion? I would suggest that as we move down the road of selecting pilot areas there would be broad consultation in each of the areas, that those would come under consideration, looking for community support.

B. Simpson: Just to note. There's a very big difference between area-based management and a commercial forest reserve. Area-based management — high environmental standards, high management standards, visual quality objectives, riparian, etc. — is different than a potential commercial forest reserve where you are effectively only looking at that area for timber value, which is my understanding of the intent.

[1605]

Again, on this side, we're not opposed to the intent of looking at how we maximize fibre supply to our industry, but I want to be very clear that there's a difference between area-based management and commercial forest reserve as the minister is articulating it.
[ Page 852 ]

Let me try one other tack then. The minister has issued a discussion paper on silviculture. There was an internal discussion paper within the ministry on tenure.

It strikes me that because this is a potentially significant shift in the management of the public forests, as a shift — period — that the pilot project approach, whether you get agreement or not…. You can go around shopping for agreement to try and figure out where you can best position it, and out of desperation, our first nations community says: "Yeah, give it a go here."

Or we can have the debate. Is this the direction that the public wants to go with the management of their forests? Regardless of what you do, if you put a line on a map, there are other values. Regardless of where the pilot is, regardless of where it is in the province, there are other values.

If you go shopping around for a pilot project and only go where you're going to get agreement, there's still the principle of: is that the way we want to manage the public's forest? It's a higher-level discussion.

I guess it's a challenge to the minister, since we've got COFI now saying that protected areas need to be opened up. I'm glad that the minister nipped that in the bud fairly quickly. We've now gone to reduced standards of some kind on commercial land base, designated land base.

Can we see a discussion paper that clearly articulates what the minister's thoughts are; what the government's thoughts are on this form of management; what the implications are, pro and con; what the traps are for us; and what the benefits are for communities? I think that's a high-level discussion that the public of B.C. deserves to have prior to going to the pilot stage.

That's our offer to the minister. We would be happy to engage in that. We would be happy to facilitate that. But this is a shift in how we manage a public asset, and I think that the public deserves the right to be involved at the conceptual stage, not at the pilot stage.

Hon. P. Bell: I don't want the member opposite to think that we've ruled out the notion of perhaps an initial broader discussion paper, something of that nature. That's possible. Or conversely, that we would rather go straight to more of a pilot-type model — that's possible as well.

But because we haven't framed really what the commercial forest reserve looks like yet and what all the implications are…. Nor do I expect we will for a bit of time yet, because I want to spend time working with first nations and with the environmental community to better understand their concerns and objectives around this.

Once we kind of get through that process, I don't want the member to think that I have ruled out the notion of a discussion paper or something of that nature, nor have I yet committed to it.

I actually don't expect even a year from now we'd necessarily have a pilot project underway. I think that we need to take our time to work through this. I think that it's a big public policy decision. I think the member opposite quite accurately points that out.

It's not something that I think we do lightly. If you're going to make decisions of this nature, I think it is appropriate to take your time, make sure that you fully engage people that are interested in the policy decision and then make it in a way that can be supported broadly.

I just will step back to the member's point around area-based tenure. The member is quite right that a commercial forest reserve would only be one type of what could potentially be an area-based tenure. I didn't mean to indicate that the member supported all types of area-based tenures. I know he has an interest and thinks that that management strategy is a better one.

[1610]

B. Simpson: We would think it's appropriate, and so I'm happy to hear that the minister is still considering that. I think with this kind of shift public consultation is appropriate, and we'd be happy to help in any way we can with that.

The minister talked about the base case — because I do want to come back to the offhanded or chase-down-the-hallway comments. As the minister well knows, where we live, the fear factor or the pucker factor is quite high. Comments like those cause a ripple effect to go through, when you see a piece in the Vancouver Sun — "eight to 12 mills," whatever the case may be.

The minister referenced the base-case scenario, and I want to talk about that a little bit. For the public record, could the minister state: what is the current base case for mountain pine beetle impact? If in fact the essence of the impact is done — the beetles have run out of wood; they've moved on, and we don't have big flights anymore — what is the damage to our public forests of the mountain pine beetle?

Hon. P. Bell: Two years ago if the member opposite had asked me that question, I think the answer would have been 24 percent, and that number, I think, was kind of out there in the public. It depends on the TSA — on a TSA-by-TSA basis. The member for Columbia River–Revelstoke, I think it's largely zero percent — in fact, maybe a potential for growth. The member for Cowichan Valley isn't impacted either. The member for Cariboo North is heavily impacted. So it depends on a TSA-by-TSA basis.

The initial assessment — and this was actually for the interior of British Columbia, so it didn't include the coast — was a 24 percent falldown. That amounts to about 12 million cubic metres pre-uplift. Today, as a result of the work that we've done, we think that number is likely 7 percent, but I want to make sure that I don't
[ Page 853 ]
create an expectation that all of the work is done to get to that 7 percent yet. I think we've still got lots of work to do. We are going to continue to work, and my objective is to get to zero percent.

I want to continue to work on that, and I'm sure that the member opposite knows, with the dependence of his community, my community and all the communities in B.C…. I'm sure the member opposite would encourage all of us, and I'm sure he would commit to doing anything he could to help us achieve this objective of getting to a zero percent falldown.

It is very challenging. Mountain pine beetle has impacted about 45 percent of the mature pine stands across the province at this point in time. The member opposite has seen my presentation, so I think he knows the three key strategies that we're focusing on right now to try and mitigate that midterm timber supply falldown.

B. Simpson: Yes, I've seen it a couple of times. I recite it in my sleep and see the visuals — you know, the whole works.

So let me get to this, and the chief forester and I have had this discussion as well. What is the basis for that modelling for that base-case scenario of 24 percent falldown in the 12 million cubic metres? And for those not clear, a cubic metre is a telephone pole, so 12 million of those is a lot of fibre that's lost. But what is that predicated on from a modelling perspective?

[1615]

Hon. P. Bell: I'll give it a try. We may have to do this a couple times to get all the information out.

It is predicated on rolling up all the units in the interior of British Columbia that are dominant pine or have significant components of pine. It's estimating all of the mortality at 70 percent for the pine stands; looking at all the residual, non-pine stands: the spruce, balsam, fir stands — there's a little bit of hemlock in the member's area as well, and I suppose a little bit of cedar; estimating the growth of those stands through that midterm timber supply; and then calculating the available residual volumes, assuming all the known land constraints that have been in place.

It is a technical review based on the data that was available to us. That model, of course, we're constantly reviewing, based on updated information.

The Chair: We'll take a five-minute recess.

The committee recessed from 4:17 p.m. to 4:24 p.m.

[D. Hayer in the chair.]

B. Simpson: So 70 percent mortality. I wonder again if the minister…. Let me contextualize this for people again, because it is absolutely essential that the government has good data to make decisions with respect to annual allowable cut. Annual allowable cut is based on the amount of timber we believe that we can harvest and still have a live, sustainable forest. We can harvest that year over year. That's why we think it's a renewable industry.

In order to be able to make an annual allowable cut determination that actually guarantees future generations that they have healthy forest ecosystems, that they will always have an industry available to them in whatever form that industry becomes, you have to have good data. That's why it's important we have a discussion here about the data, because there are lots of questions about it.

[1625]

The minister indicated before the break 70 percent mortality and, if I understood him correctly, some growth and yield projections on the non-pine species — that those two things are rolled up. I've had discussions with the previous minister and the chief forester about how we need a TSA-by-TSA analysis of this now and not two years from now — three years from now, wherever — because it's at the TSA level.

TSAs are timber supply areas. They're lines on maps, and they surround communities.

So some clarification on this so that we understand the modelling. So 70 percent mortality of all standing pine volume? Is it 70 percent mortality of all standing pine volume or of mature pine?

Hon. P. Bell: A couple of points to that. First of all, just to answer the specific question, it's 70 percent of mature volumes.

I want to point out that as we kind of get further into the downfall from the epidemic, we're better understanding it. Originally, we had actually been projecting that 80 percent of mature volumes would be killed. Now the information we have has guided the chief forester's office to reduce that to a 70 percent estimate. The chief forester is constantly reviewing the information that we have available to us out there and then re-estimating the impacts.

The member opposite indicated that he had previously encouraged the Forest Minister and the chief forester to do a TSA-by-TSA review. In fact, that's what we do. The chief forester has the authority to do it whenever he feels it is necessary but at a minimum, under the current legislation, every five years.

That's how we get at the information in terms of the overall impact of the beetle. It's done on a TSA-by-TSA basis. It's not a rolled-up number that we do as one calculation. It's as a result of 22 beetle units across the province.

B. Simpson: I was referring to a public report that went out that rolled everything up, and the public report
[ Page 854 ]
from the chief forester's office talked about all of the other unknowns that we have.

But let's go to the 70 percent mortality of mature pine. Does the model not take into consideration…? Again, we know that some stands were very high mortality rates — approaching 100 percent mortality rates. We know that some stands they'd blow through.

Is the minister saying that we've now downgraded from 80 percent to 70 percent? What we're seeing on the ground is that on average, it's a 70 percent mortality. Is that what I'm understanding? That's why we've downgraded it?

Hon. P. Bell: A couple of pieces on those comments. First of all, if you compare the data originally presented in the early 2000s, it indicated that we thought that the beetle epidemic would peak later than it actually has. The epidemic has actually peaked earlier.

Also, from the earlier information we had we thought that the epidemic would continue on longer and that the falloff would take a longer period of time than it did.

What we're finding, in fact, is that it peaked earlier than we had estimated and that the falloff occurred quicker than we thought it would. What we're also finding is that while the beetle epidemic is still in the fringes around the province…. I should just say, as an exception to that, that the Merritt, Logan Lake, Okanagan areas — there's still a fair bit of activity in those areas.

[1630]

While it has peaked in the majority of the areas, what we're seeing up in the Peace and down in the Kootenays is a much more kind of fringe activity. In that case, it's a number of reasons. One is that the timber supply has more species in it. There are not the monocultures that you see in the central Interior of the province.

You know, this is an extraordinary event and one that we are learning from. We're constantly reviewing and doing our best to estimate the information. We've got a great team of professionals — I know the member opposite agrees with me on that — in the chief forester's office and throughout the Forest Service that spend a great deal of time and effort estimating the impact of this beetle and providing government with good decision-making notes so that we can move forward.

B. Simpson: Again, to clarify why we're having a discussion about a technical issue. If you look at the Quesnel TSA or up in the Lakes District or wherever, it ain't fringe. It's not a small percentage. When you're looking at the modelling in those areas, you know, to say it's a 25 percent falldown overall, because it involves the Kootenays and it involves other areas that have a small percentage of pine….

Do we have documentation of the heart of the beetle? In the Quesnel timber supply area, as a good example: what's the falldown there? What's the mortality rate? What's the falldown in the Quesnel area?

Hon. P. Bell: We do have that information available on a TSA-by-TSA basis. We don't have it here. If the member wanted to tell me.… If there were one or two TSAs — or even three, I suppose — then we could e-mail and get someone to get that information for us today.

B. Simpson: Is that information broken down and available on the government's website?

Hon. P. Bell: No, we haven't posted that information.

B. Simpson: Again, for context, when somebody reads a Gordon Hamilton piece that says a 24 percent falldown but that we can go to 7 percent if we do all of this magic…. We will get a chance to explore that magic shortly. The reality is — and I get it in my constituency office — that anybody who has been out in the bush in Quesnel looks at this and goes: "Is this person who's saying this off their rocker?"

You go out into the Nazko Valley, and you drive for a hundred kilometres or more, and it's grey, red — well actually, there's not much red left anymore — or black, because of the Nazko fire. There's not a lot of live forest out that way. To hear numbers like 24 or 7 percent flies in the face of experiential evidence. That's why TSA by TSA is important.

Again, the government owes it to the public for them to be able to go somewhere on their webpage and look at the implications in their own TSA, because that's also where the mills are. The major mills that were built to churn through lumber and logs are the ones that are going to be the most heavily impacted TSAs in the Interior. That's where all the capitalized mills are.

Let's get back to the base case again. In the base case, where is the juvenile mortality? The minister talks a lot about midterm timber supply. But under the forest health activities that have been conducted out of Kamloops, we know that we have significant areas of very significant juvenile impacts.

[1635]

We have areas of 100 percent mortality in mature and down, in some cases, at least 50 percent up to 80 or 90 percent in the juvenile stands. So if that's not in this model, it does have huge implications for midterm timber supply in what that juvenile impact is.

Again, 24 percent falldown base case, based only on mature pine and based on growth and yield on non-pine that doesn't take into consideration juvenile impact — that's your midterm timber supply. So where is the modelling that includes juvenile impact? Is that at the TSA level, or does it exist somewhere that we can look at?

Hon. P. Bell: Specific to the member's question, the mortality rate in the immature stands that was originally presumed to get to the 24 percent falldown — we will get that information for the member opposite. We
[ Page 855 ]
don't have that level of detail here, but we can get it for the member.

On mortality rates around…. I guess perhaps I'll cover off two areas. Age class 2 stands, which are between 20 years of age and 40 years of age. The highly variable rate of impact…. The member opposite, I'm sure, has seen stands where virtually 100 percent of the stand was killed. Also, I'm sure the member opposite has seen stands where maybe there was a little bit of spotting but not much else.

The age class 2 stands are not a dominant feature on the landscape, particularly in pine, and that's because we really didn't start planting pine in B.C. until kind of the 1970s. That was when we started harvesting. We didn't harvest pine, interestingly, until about 40 years ago. It was considered a weed species and not something that was merchantable.

[1640]

When we started harvesting the pine about 40 years ago, you started seeing some planting activity. And then, as the member opposite knows, the planting regulations changed — I believe it was 21 or 22 years ago — that required silviculture on stands after they'd been harvested. Then you saw the pine activity ramp up.

So the pine stands that are between 20 years of age and 40 years of age — particularly on the tail end of that, more the 30-to-40-year range — are the ones that would have been impacted. Although they certainly jump out at you on the landscape, there are not huge volumes of stands in those age classes.

Pine under 20 years of age, age class 1, have largely been unimpacted. I suppose there's probably the odd one here or there where you will see a few trees that appear to have been impacted in that level of stand. That's pretty minimal.

The real determining factor for mountain pine beetle activity appears to be the diameter of the tree. It's always dangerous to make blanket statements, so I would hesitate to do that, but in our experience, generally beetles leave trees alone unless they're at about a six-inch diameter.

If activity was very heavy in a certain zone and there was a large hatch that year, then it's quite possible they would go into smaller trees than that. But if you tried to build a model across the landscape, the model would likely indicate that that six inch number appeared to be about the right number — which gets the tree, depending on the site, anywhere from 25 to 40 years.

You know, I'm sure someone could show us a tree that's 15 or less, 12-years-old, that's six inches. That would be an anomaly, on average.

We have requested by e-mail from staff the remainder of the information, and we'll provide it when it comes in.

B. Simpson: Again, the critical reason for these lines of questioning is to understand whether the government has actual data that substantiates what's happening on the ground and that the modelling projections are really reflective of reality.

The minister indicated that the very young stands weren't impacted by the mountain pine beetle, but I'm sure there are people on that side who know that they're being impacted by other pests and diseases, and that we have mortality in plantations and various other things that are not mountain pine beetle–related.

I'm hearing the minister say that there's some kind of factor in there. I'd be curious to know what that factor is on the juvenile stand impact. Again, it's really at the timber supply area level that you need to know that, because that's where the mills are. That's where the communities are.

But I want a clarification on the whole assumption that we're getting growth in the non-pine stands. We just had an uplift in Quesnel area for West Fraser to address a spruce beetle epidemic.

Does the growth and yield that the minister is referring to on all the non-pine take into consideration the broad range of forest health impacts that are occurring in all of those species, as well, and the mortality rate of all of those species? Is that factored into the modelling?

Hon. P. Bell: The answer to that question is yes. All of those things are factored in, both in the initial review and then each time a review is done. The chief forester applies reduction factors to ensure that we have an inventory that's accurate.

I'd just mention to the member opposite that under current silviculture standards, we require planting of 1,200 to 1,400 stems per hectare. At maturity, many of those stands will be four or five, six, eight, maybe a hundred stems per hectare, depending on the nature of the stand.

I was in a stand out in the Terrace area about a little over a year ago that would have started out, probably, about 3,000 stems per hectare and ended up being thinned out to 400 stems per hectare, and it was a spectacular volume.

[1645]

When you go in and plant a site, you always plant far more trees than you would expect to harvest at completion. In fact, if all the trees actually survived on the site through to maturity, you might have a site that is problematic, that's overstocked.

B. Simpson: We're going to canvass silviculture a little later on, because there are all kinds of issues associated with what's going on with silviculture — what planting is and isn't being done. I just wanted to make sure that this is a government that actually has good inventory data.

I have to say that I'm not that comfortable, based on the fact that if you go back and look at the chief forest-
[ Page 856 ]
er's report in all of the things that were not factored into the TSA analysis to get the base case — the implications of protected areas, the implications of other pests and diseases at a quantifiable level….

My question is: how is that data collected? Because if you're doing only aerial surveys, you can't tell from the air what species you're looking at necessarily. You can tell dead trees, but you can't tell necessarily what the infestation is, what the disease is, etc.

How is this inventory analysis done on a TSA level? Is it ground-tested? Do we have people out on the ground actually looking at what the implications of this are and feeding that into the modelling?

Hon. P. Bell: I think what the member is referring to is what is in the data package to which the chief forester applies his talents and various formulas to determine the allowable cut in the particular area. There are at least three levels of information that are used in that package.

There's initially aerial work that goes on to collect data. That aerial work is then ground-truthed. So the specific question that the member asked was: do we actually have people go out on the ground and confirm what we thought we saw from the air? The answer to that is yes.

We also use harvesting information, the actual experience of harvesting sites. So you look at those sites, and it gives you incremental data in terms of how much volume came off each hectare that was harvested — the type of timber and all those sorts of things.

For the member opposite, I would assure him that the steady eyes of the chief forester are capable of picking out a spruce tree from 30,000 feet. I have lots of confidence in his ability to review aerial work.

B. Simpson: Well, the people who do it on a regular basis will tell you that they can't. I'm talking about diseased trees, to the minister. You cannot tell a diseased tree.

There's no characterization of either of the trees, so you don't know if you're looking at a spruce epidemic or a mountain pine beetle epidemic. It's very important, because from a modelling perspective, it's hard to discriminate. I'm being told by the people who are doing the inventories that we're not doing enough ground testing.

[1650]

So let me just check the minister on something here. It really gets to the heart of what I'm getting at because, quite frankly, this government has a sordid history with forest inventories since it took power. In taking it away from the Ministry of Forests and trying to do it through giving it to the corporations, through defined area management, in giving it to another ministry, it got lost.

In 2006, as a result of that, the Association of B.C. Forest Professionals gave a warning to the government about the status of forest inventories that wasn't pretty, and it wasn't lauding the government for the status of those inventories. We are now at a point where we have a conversion to second growth on the coast that is problematic, and we have pests and diseases in the Interior that are problematic.

We still have a government that, I think, quite frankly, has not put enough resources in the chief forester's office or enough resources on the ground in the Ministry of Forests to make sure we have accurate inventories so that we're not playing politics on a daily basis with the communities that are impacted by all of the factors on the land base. This isn't a time for flippant comments about what the chief forester can and can't see from a plane.

There was a report done, Assessment of the Status of Forest Inventories in British Columbia, by the Association of B.C. Forest Professionals. Under the results-based code and professional reliance, these are the people that the minister is supposed to actually be depending on out there on a daily basis to give information.

Where can I go and find — because there are a significant number of recommendations in here — an explicit response from the government to the recommendations in this report?

Hon. P. Bell: We did take the 2006 report very seriously. I just confirmed with my chief forester. He's been chief since 2004, and since 2004 there have been no reductions to speak of in the chief foresters' office. They've had a complement of 250-odd staff since that period of time. I'm not quite sure where the member was going on that one.

As a result of the report, the chief forester established an advisory committee that has members from the ABCFP from across the province on that committee. We've also refocused our efforts on what's called vegetation resource inventory, VRI. We now have completed 40 percent of the units in the province under this new VRI model, which provides for a much higher level, a better quality of information for us to utilize.

[1655]

The chief forester's office, under only his guidance — there's no role for the political arm of government in this — determines which units he believes are most important. He may go back and redo a unit prior to the normal period of time, the five-year window under which he would recalculate that unit, if he thinks the information needs to be updated or was incorrect.

The quality of information that the chief forester's office provides is, I think, exceptional, and I have every confidence in the work that they do.

B. Simpson: Statement of clarification and then a quick question. The clarification: I never indicated that the chief forester's budget had been cut. I just simply
[ Page 857 ]
said that the government started shifting inventory responsibilities all around.

The first recommendation on governance from the Association of B.C. Forest Professionals was to give the chief forester full responsibility back for the public forest inventories. It's right in that report. With respect to the vegetative inventory review, is PricewaterhouseCoopers involved in the funding that was assigned for that review?

Hon. P. Bell: The answer to the question is yes, PricewaterhouseCoopers does have a role in the work that goes on.

B. Simpson: Again, we just talked about the chief forester's office and the staff that he's got. We've got Ministry of Forests staff. One of the things that the member and critic will start canvassing is why this government likes PricewaterhouseCoopers so much, especially since the minister admitted that, on advice of one staff member, there were cost savings in pulling some responsibilities back from PricewaterhouseCoopers.

Maybe the minister could explain to the public why instead of giving funds to the chief forester's office — an incremental lift in budget to the chief forester's office — we have to go to a third party. Because the reality is that the minute you go to the third party, you have administrative costs, you have overhead costs that are sucked out of the actual work that needs to be done on the ground.

By way of explanation to start this line of questioning, why does this government like PricewaterhouseCoopers so much, and why don't they like to give the Ministry of Forests that funding to do the work that they can do so capably?

Hon. P. Bell: PricewaterhouseCoopers would have been awarded a contract initially through a competitive bid process, and those are open, transparent processes that anyone can review.

N. Macdonald: I want to spend a bit of time — and it just flows from some of the comments that were made, not only just immediately before this, but also from yesterday when we began the estimates — around PricewaterhouseCoopers and some of the savings that the minister identified in the cuts to his budget.

Just to elaborate, you've indicated that they were the lowest bidder. Still, the question that was asked by the member for Cariboo North was: why was it put out to tender in the first place? Obviously there are additional costs that go with that. Why was it simply not handled in-house? Why did you not simply increase the budget of, for instance, the chief forester so they could do this in-house?

Hon. P. Bell: In some ways I think the minister almost answered his question, in that we do make decisions, from time to time, in terms of getting some services contracted out and having some services done in-house. Recently we made a decision to deliver the Forests for Tomorrow program in-house.

[1700]

We look at all of those things. We could be here next year, and the member opposite could ask me the question: "Why did you decide to bring a component of the business line that perhaps previously was contracted out in-house?" Each year under the advice of the executive team in the ministry, we make decisions on contract services.

Right now one of our focuses within the ministry has been to protect our staff complement wherever possible. So if there is a contract service that is being done outside and there is an opportunity for us to bring that in-house and we have that expertise, we certainly would consider that.

N. Macdonald: Just to follow the minister's lead, I think you do see changes from contracting out to doing things in-house, and I think for each of those the ministry would have a rationalization. So that's just what the public wants to explore.

Just to go back. I think that the minister gave the figure, but just to start me off, what were the savings that the minister identified by moving the Forests for Tomorrow contract from PricewaterhouseCoopers to ministry staff?

[H. Bloy in the chair.]

Hon. P. Bell: There's about a $200,000 savings in that program.

N. Macdonald: So just to understand. Pricewater­houseCoopers was the bidder. How many other contractors are actually in B.C. that are able to do the same work that PricewaterhouseCoopers does?

Hon. P. Bell: Likely any of the top five management accounting firms in the province would have this capacity, so clearly KPMG would have that capacity. Deloitte would have that capacity, and PricewaterhouseCoopers would have that capacity. I can't think of the other two off the top of my head, which ones they would be, but it's organizations of that nature that typically bid on this work.

N. Macdonald: Just looking at the list from the public accounts, PricewaterhouseCoopers received nearly $83 million to administer. I mean, just looking from the list, I see five programs.

I see that $83 million going to administration of the forest science program, the mountain pine beetle — and
[ Page 858 ]
I presume that's federal money? — the forest investment account and the job opportunities program, and we've talked about the Forests for Tomorrow. Are there any other contracts that I've missed there, or is that the comprehensive list?

[1705]

Hon. P. Bell: For the member opposite, inside the Ministry of Forests and Range, which are the only ones that I am capable of speaking to, PricewaterhouseCoopers did have the FFT contract. As I've mentioned, that now has been pulled back and is in-house. They do continue to hold the FIA contract, as the member pointed out — the forest investment account, the FIA contract.

One of the things that the member missed in reading out…. There are some probably very small contracts and probably from some localized offices of PricewaterhouseCoopers for the B.C. Timber Sales program. It's possible that there are some in there.

The contract for PricewaterhouseCoopers for FIA was originally tendered in 2007. That contract expires in 2010, which I suspect are questions that the member would get to at some point. I'll just put that information out there now. The other programs that the member mentions reside in other ministries.

N. Macdonald: Just so that I understand — this just comes from the public accounts — there's about $3,118,646 that PricewaterhouseCoopers handles. Is that an amalgamation of several contracts?

I also see that the forest science program is $9,101,984. This is from last year. The federal mountain pine beetle money — that's $3,217,566. You have mentioned the forest investment account, and that's $41 million and some, and last year there's $21,557,311. Then the job opportunities program, which is with a different ministry, is presumably — and you can correct me — $4,874,979.

So what you're saying is…. Is it just the Forests for Tomorrow that sits with this ministry, and the job opportunities program sits with a different ministry? Could you just identify the other ministries if they're not yours — the other ones?

Interjection.

N. Macdonald: Well, I see the forest science program, the federal mountain pine beetle money, the forest investment account, the job opportunities program. Then I see another figure of $3.118 million. Presumably, that's timber sales. I don't have it identified, or I didn't put down the account. Maybe that's an amalgamation of several smaller ones. I'm not sure where that figure comes from.

If the minister has that information and if he could identify which other ministries the PricewaterhouseCoopers accounts or contracts are located….

[1710]

Hon. P. Bell: The member opposite points out that the forest investment account or FIA is a contract with our ministry. That's a contract that PricewaterhouseCoopers has with us. The forest sciences program was previously with PricewaterhouseCoopers. We also chose to bring that back in-house, and we're delivering that as well now, so PricewaterhouseCoopers no longer has that inside the ministry. PricewaterhouseCoopers no longer has that program. They did last year, in the accounts that the member is referring to.

The federal mountain pine beetle money. We are guessing here. One should probably never do that on Hansard, noting that you're there forever, but we're guessing that that's probably being administered through Community Development. So I'd be warning my colleague, the Minister of Community and Rural Development, that someone from the opposition will probably be asking him about that one when it gets to his turn. The job opportunities program is administered through Community Development as well.

So of the programs that the member opposite mentioned, currently the only remaining one with PricewaterhouseCoopers would be the FIA delivery, and there's only a portion of that.

Now, the member opposite was reading out a series of numbers. That's not the administrative fee that has accrued to PricewaterhouseCoopers; that's actually the money that flows through PricewaterhouseCoopers out to the program. I think that the member opposite was mentioning some numbers in the $40 million and the $3 million. That would be the money that was actually administered on behalf of whichever ministry it was, not the payment for the administration fee of doing that work.

N. Macdonald: Just a couple of questions. In terms of the contracts, what is the set fee? Is that part of the bidding process, to put in place a set management fee?

Could the minister just explain how these contracts work? Is there a percentage? For instance, with the federal pine beetle money, it's $3 million. I know that that's Community Development, but is there sort of a set percentage that the company gets? Is that how these contracts work?

I guess it would be simpler to do it with the forest investment account. That $41 million — is it like 5 percent, 2 percent, 10 percent? What is the administrative fee, or is that not how these contracts work? Maybe the minister could explain how it works.

Hon. P. Bell: The numbers do fluctuate relative to the percentage, and it's a reflection of how much money was actually flowed in any given year. The average for the last six years is 3.6 percent for $9.894 million on the delivery of $276,510,075.
[ Page 859 ]

The high year was 2005-06, where there was just $26.604 million that was managed through Pricewater­houseCoopers. It was 5.2 percent of the account value, but it was also the lowest dollar payment through that period of time. The lowest year was 2002-2003, where they administered $76 million for a $2 million contract price at 2.6 percent. So for that period of time, the average was 3.6 percent.

They also have an auditing function, and that auditing function ranges in price from a low of 1.6 percent to a high of 4.3 percent — again, based on the amount of work that goes on — for an average of 2.4 percent over that same six-year period of time. A total of $6.743 million.

N. Macdonald: So is this information, then, available through public accounts? And would I be able to find it? Is it all on the public record, or is it something that I can ask the minister to break down? This is again something that it would be interesting to have the breakdown….

If it's in Public Accounts, I can go and find it, but if it's something that the minister has in place — some piece of paper — and could provide to me, that would be useful too.

[1715]

Hon. P. Bell: Public Accounts is a little bit higher-level in terms of the information that's presented publicly, although it's pretty detailed in nature anyway. The great news is that this information is now in Hansard, so it's easily available there.

I don't want to be frivolous, so certainly, if the member had any questions on breakdowns, we're happy to provide that. It's information that would be available on request. Otherwise, Public Accounts would get to be a very, very large document if we included information at that level.

N. Macdonald: Well, rather than take a great deal of time and ask to break out all of the numbers, it seems to me that the minister has information broken out year by year. I don't know how much value that necessarily would be, but it certainly would be something that would be useful for me to go through and to understand. So if the minister has that on a sheet and he could share it with me, that's something that I would appreciate. You can let me know if that's something that is easily done or not.

Then just the question. The minister talked about the forest science program as something that is now in-house as well. Just two questions on that. One is: if the program is still ongoing and is now managed to the same scale as it was in 2008-09, what were the savings by bringing it in-house?

I guess the second question is…. I'm presuming that it still exists. If that's not the case, would the minister let me know? So I guess there are three questions in there, if the minister could answer them, please.

Hon. P. Bell: I think I covered this off in my opening remarks, but I'd be happy to do it again. The forest science program does still exist. We are implementing it in-house as opposed to through PricewaterhouseCoopers.

The program was $14 million last year. It is down to about $8 million this year, for a reduction of about $6 million. The areas where we refocused our efforts were particularly on tree improvement, forest health programs. Those sorts of initiatives are where we have chosen to allocate the majority of those dollars.

N. Macdonald: The minister indicated that Forests for Tomorrow…. Moving that in-house saved $200,000. How much did the ministry save by moving the forest science program from PricewaterhouseCoopers to doing it in-house?

Hon. P. Bell: As I mentioned, when I read out to the member opposite the individual PricewaterhouseCoopers contracts that have been managed over the last number of years, the more money that's expended in a given year, the lower the percentage of payment to PricewaterhouseCoopers is. The less money, the higher percentage is paid out.

Just doing some very quick math here for the member opposite, the average through that period of time was 3.6 percent. It appears like we were in about an average year. But, of course, that will be reduced now. Perhaps that percentage will go up. So 3.6 percent or 4 percent of $14 million is about half a million dollars. That range would be the reduction of the contract to PricewaterhouseCoopers as a result of bringing the forest science program inside government.

N. Macdonald: When these contracts were put up, did any other contractors bid on these contracts? If so, how many, and which companies?

[1720]

Hon. P. Bell: We're stretching our corporate memory here a couple years to go back to that. We're relatively certain that KPMG bid on this work as well. We think there may have been a third bidder, but we're not certain of that.

N. Macdonald: I don't completely understand why this would be done in the first place. Clearly, there's a capacity to do this in-house, because you're moving it in-house and you're not adding staff. You're simply trying to retain staff.

Well, let's maybe do it step by step. The minister said that moving Forests for Tomorrow in-house came at the suggestion of an individual that works for the minis-
[ Page 860 ]
tries. Is that the level of consideration that was given to repatriating, or taking back, this contract — that simply one individual suggested it was a good idea? Or was there more of a study as to whether it was a reasonable thing to do? Like, what is the complete process that went around moving this contract back in-house?

Hon. P. Bell: Actually, when I mentioned that it came as a result of the tour that I did through the Clearwater office, a suggestion that came forward, I guess I was trying to demonstrate to the member opposite that there are lots of great people in the Forest Service that suggest things and that I personally take those seriously when someone suggests something to me. If upon review it makes sense, we're eager to take that advice and implement it.

The process though. The member asked: "How did we determine that that was an appropriate decision?" In a round table that I did in the Clearwater office, the staff person suggested that that would be an appropriate thing, that they felt they had the internal capacity to deliver the Forests for Tomorrow program out of that particular office.

I then took that to my executive team. They expressed an interest to review that opportunity to see if it made sense for us. They did that review and determined that it was an area where we could bring something back in-house, that we had sufficient human resource capacity internally within the Forest Service. The decision was made on that basis.

I will point out to the member opposite that in previous years, the amount of volume that was being harvested in the province was significantly higher than it is today. We had total volumes upwards of 75 million cubic metres being harvested. We're now in the range of 45 to 50 million cubic metres, and so we do have human resource capacity.

We're always looking for opportunities where we can utilize that human resource capacity in the most effective way within the Forest Service. This particular decision would be an example of that.

N. Macdonald: So maybe as we go through…. Part of what I want to examine is just the rationale for going to contracting, you know, in general. I don't completely understand the efficiency of that. But before we get there, presumably, this contract was broken in moving it back in-house. Was there any penalty for that? Or am I mistaken, and the contract was finished?

So, was it broken? If it was broken, was there a penalty? Or is it a contract that simply ended?

Hon. P. Bell: The contract stipulated a 60-day notice period for any change on the part of government. We provided that 60-day notice period, and there was no penalty paid.

[1725]

N. Macdonald: The minister has indicated a saving of $200,000. Presumably, there would be additional costs to running it in-house. What was the annual contract for PricewaterhouseCoopers to run the Forests for Tomorrow? I know that you had a percentage, but if the minister has given a hard number, I didn't get it. It could be either from last year or what was going to be the cost for this year.

Hon. P. Bell: My staff advised me that, in the Forests for Tomorrow program in particular, about half of the money was delivered through PricewaterhouseCoopers, which would be the component that they would then charge for the administration of.

The other half was delivered in other ways. So if we're talking about roughly a $40 million total program, about half of that, $20 million, was delivered through PricewaterhouseCoopers. Out of that was an approximately 4 percent administrative fee, in the neighbourhood of $800,000.

The fact that there's just a $200,000 savings this year is reflective of the fact that we've only a partial year. The early part of the year, of course, is when the majority of those contracts are written, because that's when the activity takes place on the landscape. So the $200,000 saving is just representative of a partial year. In future years we would anticipate much greater savings than that.

N. Macdonald: Just to understand. The remaining half — was it delivered always in-house, or were there other contractors that managed that other half?

Hon. P. Bell: The rest of that money was spent in-house through both the Ministry of Forests and Range and the Ministry of Environment. It could be that the integrated land management bureau got a bit of that for support and inventory work as well.

N. Macdonald: Is there any consideration to move the forest investment account in-house? If not, what's the rationale for keeping it still with PricewaterhouseCoopers? Is it a capacity issue? What's the rationale for not moving that back in-house?

[N. Letnick in the chair.]

Hon. P. Bell: We are going through a transition period, and we're reviewing all of the contracts. I wouldn't want to say whether the FIA account would or would not come back in. But right now during challenging economic times in government, certainly, we're looking at how we are more efficient.

I should just point out to the member opposite that historically when the volumes are very, very high, harvesting levels are very, very high. Of course, it takes
[ Page 861 ]
more staff to deliver those services. Now that volumes are lower, we're looking at what sorts of services we can offer in-house that previously would have been outside of government.

[1730]

N. Macdonald: The forest investment account…. There is consideration to move it in-house this year, so this year how much will PricewaterhouseCoopers get for administering the forest investment account? What's the sum? I know you've given me a percentage, but a hard number would be useful, please.

Hon. P. Bell: I want to highlight that we're always looking at all of our options, so if there are opportunities, we're considering those. The amount of money that PricewaterhouseCoopers would administer this year, based on the '09-10 budget, is $35.95 million. Their combined administration and audit fees — I've mentioned to the member that there are two components to that — would be $2.5 million, based on a delivery of $35.95 million.

N. Macdonald: Thank you for that.

The minister has mentioned the auditing fee and then the administration. Can you break down, in any other way, the administration fee? I don't know if that's possible to do, but just to help me understand exactly what is being done for that amount.

I think part of what I'm looking for is just the complexity in some of these programs. It can either be with the Forests for Tomorrow or the forest investment account — just to give me a sense of what the complexities we're dealing with are, what PricewaterhouseCoopers is doing.

You've mentioned an audit. Maybe just a bit of detail about what that looks like. Are they actually going to the people that receive the grants? Just an idea of how much this is broken up into.

For instance, with the federal mountain pine beetle moneys…. I know that that's a different ministry, but I would presume it's just a few of the major companies that are receiving that money. Therefore, you'd be talking about a relatively few accounts that you would have to manage, whereas with the forest investment account, Forests for Tomorrow…. I really don't have a clear sense of just how complex….

If the minister could just find a way of giving that explanation, that would be useful, please.

Hon. P. Bell: I'll read it into the record, but we're also happy to provide the member a copy of this, if he'd like it.

"The administration fee charged by PricewaterhouseCoopers covers receiving investment schedules from recipients through the forest investment reporting system, reviewing and approval of submitted projects, monitoring investment progress, paying recipients, quarterly report to government, ad hoc reports for government and providing program updates to the recipients.

"The audit fee is to undertake annual performance and financial audits of the recipients for the land-based investment program; funding to ensure that the land-based investment program's objectives, standards, guidelines and obligations have been followed and are in compliance with the program."

N. Macdonald: Was there a governmentwide directive to look at all contracts and to see if they could be moved in-house?

Hon. P. Bell: I think the question was: was there a policy direction across government to bring services in-house where that is appropriate, where government has the capacity and the capability of managing those services in-house? The answer to that question would be yes.

N. Macdonald: So there was a directive to look for those efficiencies. I'm trying to understand why the ministry would have gone in this direction in the first place. Was there ever a directive to look for contracting opportunities? Now there's a directive that says you're supposed to be bringing things in-house. Was there ever a directive at any time given to this ministry and across government to look for contracting opportunities?

[1735]

Hon. P. Bell: I'm not, nor are any of my executive team, aware of any directive to contract out extensive services. That said, there is always a directive within our government, most certainly, to ensure that we're making the right decisions for both efficiency of program delivery in terms of cost and overall service to the public.

One of the areas where we do look to third-party delivery is program auditing services. We think that is largely an appropriate model for a third party to review programs and services and ensure that government is getting value for money. That may be one of the areas that we look to more frequently than others.

In my 15 months here I'm not aware of any directives to contract additional services out. In my previous three years as Minister of Agriculture and Lands I am not aware of any directives that were made, nor any directives in my previous year and a half as Minister of State for Mining. There's nothing that we can provide the member through that period of time.

N. Macdonald: When was the decision made that it would be more efficient or cost-effective to move these services out of the ministry and into the purview of PricewaterhouseCoopers or any other contractor? When was that decision made?
[ Page 862 ]

Hon. P. Bell: The land-based investment account for the forest investment account first came into place in 2002. It has been delivered by third party since 2002.

N. Macdonald: I realize that within the memory of the minister and within the memory of the individuals here there was no directive, but would it be possible for the minister to check and see if there was a directive in 2002? I wasn't in the country at the time, but it seems to me that there was the core review that was going on and an awful lot of changes. Philosophically, we certainly heard about the philosophy of the government of making it smaller and moving to this sort of a model. Is that what drove the decision to move to contracting out?

Hon. P. Bell: We can certainly see what's available, but we're getting back to a period that is, well, seven years ago. It may be challenging to find anything that would be helpful, from the member's perspective, in that.

N. Macdonald: I'm still trying to understand the rationale. I can appreciate moving it back. That seems sensible, especially if the contract has no penalties, but I'm trying to understand the rationale in the first place, other than perhaps going back to some ideological idea that came out of 2002.

Why would it have ever been a good idea to put these services with PricewaterhouseCoopers, when simply by moving it back into the purview of the ministry, you can save — just in one year with one contract, in one portion of a year — $200,000? The minister can identify savings of $200,000. It seems to me, and I think to most people that would be watching, not to make sense.

[1740]

There has to be something more than that, that the minister could explain as a rationalization.

Hon. P. Bell: I'll try and be a bit more specific for the member opposite. In 2002, 2003, 2004, 2005, 2006 the harvest in the province ranged between probably 65 million and 75 million cubic metres. We're in a bit of a different world now, unfortunately, due to the U.S. housing crisis and the global, overall economic meltdown, to the point where we're harvesting likely 45 or 50 million cubic metres.

We have human resource staff available to deliver incremental services who were previously busy doing other work. So we've chosen to keep those staff, that staff complement, and put them to work doing other work. One of the jobs that we have been able to put them to is the delivery of programs like the Forests for Tomorrow program.

N. Macdonald: Has there been any analysis or auditing by a party other than PricewaterhouseCoopers on how efficiently PricewaterhouseCoopers was doing the job that you asked them to do? Is there any question at all about the quality of the work that was done, or is it simply driven by the rationale that the minister has given now?

Hon. P. Bell: There was an audit done at our request by the Office of the Auditor General for the performance of PricewaterhouseCoopers, and that's a public document that's available.

N. Macdonald: For the programs that are identified here, I wonder if the minister could tell me for each of the programs that the minister is responsible for — and I realize some of them have come in, obviously, at different periods since 2002 — how many years PricewaterhouseCoopers has been administering the programs.

Hon. P. Bell: The first public tender document that went out was in 2002 for both the forest investment account and the forest science program. It's two separate tenders. PricewaterhouseCoopers was successful on both of those. Both of those were re-tendered in 2007, and PricewaterhouseCoopers was successful in both of those tenders as well.

I will add for the member opposite that Pricewater­houseCoopers does tend to specialize in this work, and they have significant in-house capacity. They apparently seem to have been successful acquiring this type of work and specific to the forest industry. There are other companies, accounting and auditing companies, that also bid on these projects, and they just simply haven't been successful to date.

N. Macdonald: We're just going to leave this for now, and we're going to move into…. My colleague here is just going to ask a few questions, and basically the focus will change to just the employment picture. So we'll spend a bit of time on this.

My understanding is that we're going to finish by ten after here. I've been told that we're to finish by ten after, and then we'll continue, I guess, Monday afternoon when we get back. With that, I'll turn to my colleague.

B. Routley: We've looked at employment impacts in British Columbia, and we're interested in hearing from you how many British Columbians are currently employed in sawmills, if you have that number. It may be that the only number you have is for year-end 2001-2002.

[1745]

The other…. Well, one question at a time. How many British Columbians do you understand are currently employed as of the last fiscal year?

Hon. P. Bell: The information that I'm about to provide the member opposite is collected by Statistics
[ Page 863 ]
Canada. They provide that information to us and anyone else who chooses to want that.

I think the member's question, if I'm not mistaken, was: how many people are employed in sawmilling in B.C.? For the year-to-date number of 2009…. That year-to-date is January to August, so this is the most current information that's available. In wood manufacturing — this is just the sawmill component of the business, which I think is the question the member asked — that number is 26,188 individuals.

B. Routley: Same question: the number of employees that were working in sawmills in the budget year 2001-2002?

Hon. P. Bell: This information all is available on the website. So I'm happy to provide it to the member. The member said 2001-02; this is for the calendar year 2001. That number was 48,900 people.

B. Routley: My next question is: how many British Columbians are currently employed in pulp and paper mills?

Hon. P. Bell: That number — again, as of August 2009 — is 11,413.

B. Routley: And the same kind of question: how does that relate to the 2001 year-end? How many people would have been working in pulp mills in 2001?

Hon. P. Bell: In 2001 the number of people employed in the pulp and paper industry was 15,000 even.

B. Routley: How many British Columbians currently work in value-added wood manufacturing in British Columbia?

Hon. P. Bell: Statistics Canada doesn't provide us with that level of information.

B. Routley: What about remanufacturing plants? Do you have that information available for remanufacturing plants in British Columbia?

Hon. P. Bell: Statistics Canada doesn't provide us that. It would fall under value-added, at least in my view. Statistics Canada doesn't provide us with that information. The only other element of information that Statistics Canada does provide us with, other than a rolled-up number in terms of total employment in the forest sector, is the number of jobs in forestry and logging. I'd be happy to provide that to the member if he cares to ask that.

B. Routley: Well, I'm going to move to question how many sawmills and pulp mills and wood processing facilities have closed permanently between May 2001 and now — current level. So we're looking for the number of sawmills, pulp mills and other wood processing facilities that have closed permanently.

[1750]

Hon. P. Bell: While my staff are looking for that number, I'd just ask the member to provide me with the definition of the word "permanently."

B. Routley: Permanent would have to be an announced closure. There are obviously lots of partial closures where mills are down indefinitely for an indefinite period of time, but when the employer has announced that it's either a closure or there's a bankruptcy or….

[H. Bloy in the chair.]

Hon. P. Bell: The number I'm going to provide the member opposite with is a number that we classify as indefinite closures. I'm not sure that entirely meets the test or the description that he outlined for me. It's probably a smaller number, actually, on a permanent-closure basis. But the indefinite closures….

[1755]

I can walk him through the mills, if he wants, that we have listed here. They include mills like Tackama in Fort Nelson. That's still there. I actually met with the CEO of Canfor recently and asked him what his intentions were with that particular operation, and he indicated that it was either to sell or restart the mill at some point, but the plywood market had to improve substantially before that would happen. That is one of the ones that's on our list here. Another one that's on our list is PolarBoard, the oriented strand board plant in Fort Nelson.

Those are the sorts of items. We calculate 20 in the category of indefinite closures.

B. Routley: On the issue of raw log exports, is the minister aware…? Would he have a number for the amount of the logs in British Columbia that are potentially bid on for B.C. manufacturers? I'm told — it was Reynold Hert that gave me this information — that there are times when they would buy B.C. logs to run through a mill like the Cowichan Bay mill in the Cowichan Valley.

Unfortunately, we don't have a level playing field. If we buy our own logs here in British Columbia and try to run them…. These are logs that are being exported, either private land logs — mostly private land logs — or there's obviously some volume from Crown land as well.

Let's just zone in on the private land logs that are for sale at the international market price. If they buy the logs, as compared to an American company trying to buy those logs…. We're at a disadvantage, because if we buy those logs and run them through our mill here
[ Page 864 ]
in British Columbia, we have to pay up to a 15 percent tariff, as the minister knows. Yet there's this inequity in that an American company can buy our logs — or Japanese or any other country, for that matter, can buy our logs — but they don't pay a corresponding tariff.

I guess the question to the minister is: how many B.C. jobs have we given away to the export of logs out of British Columbia — in particular, with this built-in inequity that exists that prohibits B.C. companies, even Western Forest Products, from buying our own B.C. logs and being at the same competitive advantage as an American company, for example?

There's that built-in inequity. How many jobs are we losing as a result of that inequity? Does the minister have any plans to fix it?

Hon. P. Bell: The member opposite might be surprised that we actually agree on this subject. We'd like to see a balanced playing field, particularly on private lands, with the U.S.

[1800]

Our position through the softwood lumber agreement was consistently that we believed there should be no export tax, regardless of lumber prices or anything of that nature, on lumber produced from logs from private land. So the member…. We are in raging concurrence on that issue.

However, the reality is that trade is a federal jurisdiction. Federal governments are the ones that have the authority to negotiate these deals and make these relationships. Despite our efforts, particularly on that front, it was not embedded in the agreement — except that there was, I gather, negotiated a clause in the agreement that says that the Canadian and U.S. federal governments would negotiate a position on logs from private land, and especially specific to the removal of any tax that would be applied — a border tax — to lumber from logs from private land.

In this area, as odd bedfellows as we may make, we are in raging agreement.

B. Routley: That's indeed wonderful news, that we're in raging agreement on keeping B.C. logs for B.C. jobs. The one small problem is that I don't really see any action being taken by the provincial government to provide incentives or actions to keep logs in B.C.

I'd be interested, now that we're in such raging agreement with the minister that this is indeed a problem…. What actions or incentives can you provide to ensure that B.C. logs in fact do stay in British Columbia and create B.C. jobs and value-added jobs, for example?

Hon. P. Bell: There are a couple of points I'd like to make in this area. The first is that there is actually a fee-in-lieu on logs from Crown land that is attached to any logs that are approved for export. That is intended to level the playing field in terms of the tax that's on those logs. I think the member is probably aware of that. Just on the off chance that's he's not, it's probably good to get him up to speed on that issue.

The second thing I wanted to point out was that, as I think the member is aware, there is a surplus test that is used to ensure that only logs that are truly surplus to the needs of the manufacturing industry in British Columbia are allowed to be exported.

That surplus test is actually a pretty comprehensive test. I think the public, unfortunately, is kind of unaware of the process. It requires a two-week advertising period. If it passes through that advertising period and there are no potential domestic purchasers of that log, then it is allowed to be exported.

[1805]

If there is a domestic purchaser who comes forward and expresses an interest in that log, they then make an offer to purchase that log. That offer is then considered by the timber export advisory committee, TEAC. If it is considered to be a reasonable offer, regardless of whether or not it matches the price that was offered as an export price to that log, then the log is ordered sold to the domestic processor. So it is a pretty in-depth process. If you talk to companies that like to export logs, generally they'll tell you that they think it's way too onerous a process.

In order for the public, I think, to try and get more confidence in the process…. I've spent a good deal of time looking at it and trying to confirm in my own mind if it is a fair and reasonable test. In order to, hopefully, encourage the public to also support that test, I recently appointed two individuals who traditionally would fall in the category of anti–log export people. One is a steelworker — I think that the member opposite is aware of that appointment — and the other is the mayor of Port Alberni, Ken McRae, who traditionally has been an advocate for keeping logs in British Columbia.

My intent with those appointments was to demonstrate that we really only want logs that are truly surplus to the domestic requirements of the province of British Columbia to be allowed to be exported. I should point out…. I think the members opposite know this, but depending on who you talk to, for every job in a sawmill there are typically between two and three jobs in the forest that also add value. The steelworker that I'm referring to, of course, is Kim Pollock, who has been appointed to that board.

The Chair: Member, noting the time.

B. Routley: I do get to ask one more question.

Well, just on the issue of the surplus test and the fee-in-lieu. First of all, the fee-in-lieu is not really an offset tax — I think that the minister would agree with me — on the 15 percent. It's not a complete answer to that.
[ Page 865 ]

On the second part, on the surplus test. The minister may or may not be aware that I've talked to sawmill and other value-added manufacturers that used to be able to get in on the small business enterprise program when it included timber that they could trade.

The issue of the advertising. I'll use my example at the CIPA mill, where the mill manager tried to block the sale of export of logs from…. There were two companies, and they purchased probably 40 percent each from these two different companies. They wanted to fill that last 20 percent of their log requirements to fill out their capacity by blocking log exports.

I was told by the mill manager that, unfortunately, because it's not a blind process in the sense that the buyer and sellers don't know each other…. Because the owner of the logs that they're trying to export can phone up the potential buyer or person trying to block the export of logs and actually threaten…. I would call it threatening or intimidating them, or maybe I'd even go so far as to suggest that it's a form of blackmail.

I've been told that these mill managers are told: "If you block our log exports, you won't be getting the other 40 percent of the wood you require for your mill." So I have actually suggested….

To the minister: have you ever considered the option of having a double-blind process in the export of logs? The logs that should be…. If they're up for sale, the owner and the seller — there is no reason why they need to know each other.

The potential buyer should be able to go and walk the logs. There should be just a number, not any identification on those logs of what company they come from. If a potential buyer wants to bid on those logs after viewing them, there should be no ability of the potential seller to phone up the buyer and intimidate them in any way, shape or form.

Would the minister support such a new strategy to prevent the export of logs from British Columbia?

Hon. P. Bell: I'll just confirm to the member opposite that one of the recommendations in the round-table report was to review the log export system to ensure that it was sufficiently robust to protect that. The round-table report also articulated the desire to keep logs in B.C., so the recommendation that the member opposite has made is, I'm sure, one that will be considered in that process.

With that, Mr. Chair, I move that the committee rise, report a little more progress and seek leave to sit again.

Motion approved.

The committee rose at 6:10 p.m.

[ Return to: Legislative Assembly Home Page ]

Hansard Services publishes transcripts both in print and on the Internet.
Chamber debates are broadcast on television and webcast on the Internet.
Question Period podcasts are available on the Internet.

TV channel guide • Broadcast schedule

Copyright © 2009: British Columbia Hansard Services, Victoria, British Columbia, Canada

ISSN 1499-2175