Finance and Government Services - Number 16 - Wednesday, October 24, 2001, p.m.

2001 Legislative Session: 2nd Session, 37th Parliament
SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES
MINUTES AND HANSARD

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES



CONTENTS

		Page

Presentations		549
	G. Furney	549
	R. Hellberg	552
	D. Blackburn	555
	K. Dyson	558
	D. Burrows	559
	R. Mealey	559
	K. Carson	561
	C. Ross	562
	L. Lepine	563
	C. Murray	565
	A. Duhame	566
	R. Johnston	568
	C. West	570
	K. Hesselden	572
	K. Morton	573
	F. Poirier	575
	N. Evers	576
	R. Gerstmar	577
	E. Dutcyvich	579
	L. Marcil	581
	R. Fleming	581
	S. Coe	582
	D. Berkshire	582

Chair:	* Blair Lekstrom (Peace River South L)
Deputy Chair:	* Tony Bhullar (Surrey-Newton L)
Members:	* Harry Bloy (Burquitlam L) Jeff Bray (Victoria–Beacon Hill L) Ida Chong (Oak Bay–Gordon Head L) Brian Kerr (Malahat–Juan de Fuca L) * Kevin Krueger (Kamloops–North Thompson L) * Lorne Mayencourt (Vancouver-Burrard L) * Barry Penner (Chilliwack-Kent L) Ralph Sultan (West Vancouver–Capilano L) Joy MacPhail (Vancouver-Hastings NDP) * denotes member present

B. Lekstrom (Chair): Good evening, ladies and gentlemen. I will call our public hearing to order at this time. My name is Blair Lekstrom, and I am the MLA for Peace River South. My home is Dawson Creek in the northeastern part of the province. I am Chair of the Select Standing Committee on Finance and Government Services.

I'll start off by just mentioning a few things about our committee and how things will operate this evening. Then we'll move on to ask the other committee members to introduce themselves. Tonight the presenters are given 15 minutes for their presentations — usually ten to 12 minutes on the presentation and then a couple of minutes for questions from committee members if they have any. At the end of the session we will go to what we call an open-mike session for people that were unable to be fit into the slots of the time frames or for people that have sat through the hearings and have come up with some thoughts they would like to share with our committee.

Everything that is said here this evening will be recorded and transcribed by our Hansard staff. Hansard staff with us this evening, over to my right, are Catherine Schaefer and Virginia Garrow. Also with us we have our assistant at the back table, for many of you that have walked in, Jacqueline Quesnel. To my left is our Committee Clerk, Anne Stokes.

Our job this evening and throughout the foregoing days is to travel around the province to hear the input from British Columbians what their priorities and ideas are for next year's budget. I think it's no secret that British Columbia is facing some significant challenges financially as well as a number of other issues that we have to correct to get our house in order if we're going to move forward as a province. We're here tonight to hear from you on what those ideas may be and what your priorities are.

Our mandate is to examine, inquire into and make recommendations with regards to the prebudget consultation paper that was put out by the Hon. Gary Collins, Minister of Finance. Once we have concluded our public hearings, we are scheduled to report out no later than November 15. That is our mandate. We are covering 16 communities across the province. Following today we will fly over to Terrace and then Prince Rupert tomorrow, which will conclude the 16 hearings around the province.

There's also the ability for people that are unable to attend any of the public hearing sessions to submit written submissions to the Clerk's office. The information for that is on the back table with Jacqueline as well. For any of the presenters that present here this evening, if anything comes forward after this evening's presentations, they can forward further recommendations and issues to our committee.

With that, I won't take up too much of your time. I will begin on my left and ask Mr. Barry Penner to begin with the introductions.

B. Penner: My name is Barry Penner, and I'm the MLA for Chilliwack-Kent. It's a pleasure to be here again.

T. Bhullar (Deputy Chair): I'm Tony Bhullar. I'm the MLA for Surrey-Newton and the Deputy Chairman of this committee.

K. Krueger: I'm Kevin Krueger, the MLA for Kamloops–North Thompson. I've never actually lived in Port McNeill — I've lived in a lot of other places in B.C., and I have a wife from Courtenay — but I've fished out of Port Hardy. It's good to be with you all tonight.

B. Lekstrom (Chair): What we will do this evening is begin our presentations. Our first presenters this evening are His Worship Gerry Furney as well as Al Sweet. I would ask you to come forward at this time, and we'll begin our proceedings.

Possibly just one word, as well, before we do kick things off. Because of the schedule we're working, as Chair of this committee I haven't allowed any dinner breaks for members of the committee, so on occasion you may see one or two committee members leave the table. I've asked them to get dinner on the run. So if they are out of the room, everything is recorded and transcribed, and our committee members will go through every presentation — just for the notification of the people in the crowd. Sometimes it looks as though they're uninterested and are leaving. That's not the case. I get in a little trouble because of how hard we're working them, but that's part of the job.

G. Furney: Welcome to Port McNeill. As you can see, the weather committee has been rather busy today. We got rid of most of the clouds, and the sun is shining. It's kind of nice to be able to welcome you to a nice, dry and sunny Port McNeill, but we've had a few rainy days recently.

I'm accompanied this evening by our town treasurer, Mr. Al Sweet, who is a chartered accountant that works for our municipality and has been our treasurer for quite a few years. There is some significance to the fact that he's sitting on my right; you'll have to figure out what it is yourself. However, he and I have worked on some presentations to you. We have five different items that we'd like to present to you. We've got them in written form. I'm not too sure whether your Clerk has distributed them or not.

G. Furney: If you'd like to take the first one, it's municipal income from property taxes. We've looked at some of the challenges that hit municipalities like ours, where you have a situation, in our particular municipality, where 81 percent of the tax base is residential. We don't have a pulp mill or a sawmill here. We're like many other communities that have no industrial tax base.

In fact, we do have some statistics, which Al ran up today. Al, would you like to distribute those? I'm sorry they weren't with your package when I presented them earlier. You'll notice in the list we're presenting, which Al is distributing right now, that it shows some large variations between municipalities, where there are have and have-not communities. The have communities are the ones with pulp mills and heavy industrial assessment. The have-nots are people like ourselves who have mostly residential.

There are some interesting points to be made with that particular list. I won't bore you with going into the details of it, because you can read them as well as I can, but it does show you what the inequity is between certain communities where there is a rather large tax base and other places where there isn't much of a tax base. We have put down the population of each of these communities as well. The percentages are the municipal taxes per capita, which have been used by us for many years to point out the disparity between communities — the product of a mill of taxation divided by the population.

These are for your background information. We have a recommendation on the second page of our presentation. The system of calculating the revenue-sharing grant needs to be continually reviewed to ensure that it recognizes the changing patterns of industrial development. That's the essence of the recommendation and the background materials in the page before that.

If you'll look at the second one, it says: "A 'Fair-Share' Approach to Municipal Income." This one relates to communities such as ours, which serves a large population of workers who work in businesses such as forestry, mining, fish processing and other activities in the resource industries that are located outside our municipal boundaries. We believe that some of the taxes that are paid at the present time on the improvements in the electoral areas directly to the provincial government should be transferred to the community that services the people who work in those resource industries.

Our recommendation on that one is that this brief is not suggesting that there be any extra property taxes charged to the industries that function outside municipal boundaries, but it requests that the property taxes paid by these industries be allocated to the community that provides all the normal community services to their employees. That's the essence of that one.

The next item that we have is on homeowner grants. Homeowner grants at the present time, as far as we can determine, end up as a wash. The only thing about homeowner grants is that they are not given to renters of any kind. We believe there's an unfair system at the present time. It only gives a homeowner grant to the person who actually owns a house and lives in the house.

We suggest that the homeowner grant be eliminated and that the residential school tax be reduced by the same amount, mainly because of the amount of paperwork involved in trying to collect the homeowner grant. The taxpayer has to sign the back of the form. It has to be presented to the municipal office. In some cases it's sent in unsigned with a cheque to pay the taxes. The person takes off on holidays because it's the end of June or the beginning of July when they make their payment. They have to sign the thing before we can get credit for the homeowner grant and deduct it off our cheque to the school board. There's a considerable amount of unnecessary paperwork involved. If you read the background information that precedes the actual recommendation, you'll understand exactly where I'm coming from. I won't bore you with the details.

Our next one is on straight school taxes. We recommend that school taxes be collected and remitted in the same way as taxes for other agencies that are collected by municipalities. In other words, at the present time when we collect taxes for the regional district, the regional district tells us the amount that we have to charge. We put it on the tax notice. We do the same thing for libraries, regional hospital districts, the assessment authority and the MFA. Each of these is collected. The school taxes are different. We get the taxes paid, we make out a cheque for the regional district by August 1, and we send them their full amount for the year.

It's the same thing with the other agencies, except for school taxes. For school taxes, we've got to go through a rigmarole that is absolutely ridiculous. The amount of paperwork that we have to put into that probably consumes…. I'm not sure exactly what the percentage of time involved for our treasury clerk is, but it is a considerable amount of time. It's an absolute waste of time to do it the present way. It would be much cleaner if we collected the taxes and sent one cheque for the amount collected to the school board by August 1. That's the end of the issue. Our recommendation is to collect and remit school taxes in the same manner as is done for all the other agencies — i.e., simply, efficiently and paid in one cheque.

The last item that we have — you'll be glad to hear that we're at the fifth item — is headlined "Change of Waste Management Act Fee Structure." We have a treatment plant in Port McNeill that costs around $3 million. We put it in about two and a half or three years ago. It functions exceptionally well. It produces an effluent which is almost potable and discharges into the ocean. At the present time permits are issued for treatment plants and effluent going into the ocean or into a receiving environment, whatever that may be.

In our case, a sewage treatment plant is charged by the ministry of environment for the volume of product

actually emitted from the treatment plant. You're also charged by a factor that considers the density or the quality of the material actually ejected from the plant. What that amounts to is that there is absolutely no reward for a municipality to lower the negative nature of some of the effluent or to lower the volume going through the treatment plant. In other words, if a municipality has a drain with storm water getting into the system, for example, there's no inducement at the present time to reduce the amount of storm water getting into the system. Under the present system we have to pay for the volume that goes through the treatment plant and the quality.

In our particular case, we're at a 130-130 rating for our permit, and our actual effluent is about ten times less than that. It's a considerable amount less than that. It could be put into virtually any kind of environment, but instead it goes into an area of the ocean between here and Sointula, about halfway across, where there are not just gallons of water passing the end of the pipeline but cubic acres of water passing the end of the effluent. There's absolutely no effect whatsoever on the environment, but there's no reward for us for having such an efficient plant, and I believe there should be. In fact, our recommendation is that the Waste Management Act should be changed to charge only for the actual volume and strength of effluent discharged, which would reward the permittee for their efforts in reducing volume and improving quality of the effluent, thus contributing to a better environment.

B. Lekstrom (Chair): You did very well. Thanks very much, Gerry. What I will do is look to members of the committee if there are any questions surrounding your presentation. I see no questions.

Having a background in municipal politics, like yourself, I certainly concur with many of the issues you've brought forward here and understand them fully. This last one is something that we have to have a serious look at. Municipalities right across this province face the challenges that you've brought up here and are addressing many of these, so I would like to thank you for not only bringing the issue to us but bringing solutions and recommendations as well. I think that's really what it's all about. It's far too easy most times for people to come and point out a problem without bringing a solution to the table. I want to thank you for bringing solutions as well.

G. Furney: Thank you very much, Mr. Chairman. I appreciate the attention that you've all given to me. I know you haven't heard a thing of what I said, and you're going to read this on the way home tonight.

B. Lekstrom (Chair): They'll get them from me. Your Worship, thank you very much.

G. Furney: You'll find the numbers on the comparative list that we presented here rather interesting too. It may tie in with some of the other presentations you get from other resource communities. Resource communities do need every bit of help we can possibly get, believe me.

K. Krueger: Mentioning that, Gerry, maybe I will just ask you, because Taylor sticks out like a sore thumb there: what is happening in poor old Taylor, where it's…?

G. Furney: It's not poor old Taylor; it's rich old Taylor. If we had Taylor's big budget, we could probably help to run…. Well, we could run the whole province.

G. Furney: Actually, if you look at the end one, Kevin, under "Percentage of Tax Base — Residential," you'll notice that Taylor is only 19 percent residential.

G. Furney: It's 81 percent industrial and commercial, so that's the reason for that particular situation. Whistler is another one that's rather interesting. Mind you, they've got such high value assessments on their homes there. They're 82 percent residential, which is about the same as Port McNeill, but their average amount per capita is $1,669 compared to our $214.

There's food for thought in these numbers, and they're out of the municipal statistics book. They're available to anybody, and everybody's well aware, I'm sure. The trouble is that very few people do anything about it.

B. Lekstrom (Chair): What you've put forward here is something, as you know, we've dealt with in the northeast of the province and faced the challenges there for all of the industry. Especially the oil and gas industry, for instance, doesn't fall within municipal boundaries, yet the municipalities in the region support those workers in the industry. We've had to reach an agreement, and we have done some work towards that. I fully understand the challenges you're talking about with this.

G. Furney: It's a big one, and it affects every one of our communities. It affects Port Alice, Port Hardy, Sayward, Tahsis, Gold River — every one of the communities. It affects them all to some degree or another. It certainly affects us here. We can see it as clear as can be.

B. Lekstrom (Chair): Okay. We will move to our next presenter. From the district of Port Hardy, His Worship Russ Hellberg.

R. Hellberg: Just a little bit worn out. Anyway, welcome to the North Island — the host of the best party during the convention. It's nice to get a comment from the Premier right on the opening day. You guys did an excellent job at that.

I'm going to take a slightly different tack in my presentation. I'm going to concentrate on section C of the prebudget discussions that went around. That's the need to ensure that B.C. has the leading economy in Canada. One of the aspects that's in our…. Sorry, I'm going to tackle this as a local, North Island proposal of what we would need to get communities back and viable. The secret of a province like B.C., which is resource extraction to a great extent, is the healthy and vibrant resource communities. In the last few years a lot of things have happened to us that make us much less viable. If you want to extract resources and do it in a sound and economical and environmental way, you have to have communities out near the source of the resource extraction, and they have to be healthy.

The one thing that I find we need in communities especially is a good infrastructure. I'll start with highways. Throughout B.C. we have a stretch of what they call the international coast highway. It starts in San Diego and runs through to Alaska, and it's a combination of road-type highways and marine highways. On Vancouver Island a lot of work has been done to ensure that the highways are up to a good state. We made a stab at ferries, and that didn't work out very well. I'm sure you fellows will look at getting the right ferries across from the mainland to Nanaimo. The Island Highway is very nice. It's just excellent. It opens up our commerce a fair bit.

There's one stretch left on the highways, and that's about eight kilometres between the cutoff to Port Alice and what they call Rupert 400, on the way to Port Hardy. I would certainly like to see that left in the budget — that there are highway improvements to finish off that particular highway. You get people in their nice, big, 40-foot motor homes whipping up, and everything's at least a 100- or 110-klick limit. You come there, and the first thing you hit is a 60-kilometre corner. That's really taxing a motor home, and he's doing 60 kilometres. We would like that part finished off.

To go along the other part of the international coastal highway, in the capital budget for 2004 is an additional vessel for what they call the northern fleet. We would really like that to stay in there, and the reason is that it finishes off the servicing requirements for ferry traffic on the central and north coast in the Queen Charlottes. If that's there, we have really good, reliable ferry traffic. It's very good for tourism in the summer when the route actually pays for itself quite handily and in the winter will be able to service especially the first nation communities on the central coast. That's one part I would like to see left in.

Another headache that a lot of us in the area have had is the divestiture of ports. That is a divestiture from the federal government, but the trouble is that they gave a lot of communities a little bit of money to get them through the five years, and then they're going to be in trouble. If you look at ports, they're very expensive to maintain, and what I would like to see is the introduction of a taxation regime that maybe makes these things a little more viable. What I mean by a taxation regime is that we could have an expanded area that could be taxed for the ports. There are also some breaks they could have, possibly in either the PST or fuel taxes, etc.

The same thing occurs in the airports, but it's much more critical. When you get the gift of the download of an airport from the federal government, you are picking up one hell of a liability. Most towns are running anywhere from a $250,000 to $500,000 loss a year. They can't do that. It comes right from the taxpayers. It's an asset that's used provincewide. What we've been lobbying for, for awhile is for the provincial government to gently talk to the federal government about some of the profits from YVR, or Vancouver airport, and have some of the immense federal profits from that support some of the local airports. We need that as a province.

A lot of you are from more remote areas in the province, and the only way you can get around is by airplane. It's expensive enough now, but if the communities don't have the money to maintain the airports, we're going to be into one hell of a crunch on airports, safety-wise, in five to ten years.

Another favourite topic of mine is parks. We're blessed with an abundance of parks up here. We have too damn many parks up here, and we don't have any money to make them work. We're trying to get a trail in the Cape Scott Park, and everyone agrees it's a good idea, but there's no money. One of the sources we've identified for money is private operations in the park, and if there were some fiscal changes in a few of the acts, that would allow for private operations in provincial parks.

The other thing that would allow us some money to make these parks work is if we were allowed to do some selective harvesting in the parks. A lot of other provinces have that around. When you're doing your core reviews, maybe we could do some core reviews of parks and throw them into three classifications.

One is your typical class A park — that is, really an exemplary park. No. 2 could be a park that has some activities in it, some commercial activities. No. 3, for want of a better thing, we'll call a community forest or a demonstration forest or whatever and get some use out of it. Those are real problems.

Everyone thought it was nice to have parks around, and for the people down south, it's nice to come up to them. But for us up here, it takes them out of the operational land base. There's nothing we can do with the parks, so we need some method of money flowing back

One of the other points that we and especially the first nations need — and I use "communities" to include both the first nations and the non–first nation communities — is water and sewer infrastructure. You've seen the problems around with a lot of the communities that run into, basically, operational problems.

In Port Hardy we've got a triple P — a public-private partnership — that allows us to operate. The city of Edmonton actually operates our water and sewer system. I want to see a lot more of that in communities. It's a good way of doing business; it works. The only thing we need is a continuation of the federal-provincial-municipal grant structure, and people can get that to work.

There are a few problems we've identified with the triple P. We were the first ones in the province to have a water and sewer public-private partnership, and we've been seeing some of the problems in it. The main problem we've found is that our municipal employees, when they went over to the private partner, weren't allowed to carry over their B.C. municipal pensions. Really, it's a municipal function, and we would like to find a way that that could happen.

The other thing that Victoria could do…. We are getting better relations with the feds, but I think that some pressure should be put on them again to provide adequate funding to the first nations for their water and sewer upgrades.

One final point is that when a community enters into a service agreement with a first nation, we really have no security in how the moneys are collected. If there could be some work done on that — Burns Lake ran into that problem, and a few of the others; I'd say that so far we've been very lucky — it would help to foster better relationships.

I think B.C. is going to be a great province again, and we're going to be the leading province in Canada. In order for us to do that, we have to have strong rural communities. It's fine to have the big operations in Vancouver, Victoria and up into the Okanagan, but you need the other communities to keep you going. When you announce that we're lifting the moratorium on oil and gas, which should be quite shortly, then we can get at communities that will be out on the west coast for you to operate from. We can all have a good future.

B. Penner: I'd just like to encourage you in your effort to raise the issue of portability of pensions from the municipal sector to the private sector. I know that John Les, former mayor of Chilliwack and now MLA for Chilliwack-Sumas, has been attempting to get some movement on this issue with Ministry of Finance officials. I think he would appreciate your assistance in keeping their attention on that issue. I think it's safe to say that it's not top of mind right now with all of the other issues confronting the government in terms of the looming deficit and the restructuring of government that must take place. I encourage you to not remain silent — I know you aren't silent — but to keep active on that issue. I think that's a very worthwhile one to pursue at no cost to government that I can tell.

B. Penner: The one question I do have for you, though, is: do you have any specific suggestions other than selective logging in parks in terms of generating revenue from private activity? Do you have any other suggestions?

R. Hellberg: The private activities…. What I was referring to there is that, for instance, in Cape Scott Park there's a number of blocks of private land. People are quite interested in putting in chalets, putting in servicing structures, that would meet the requirements of B.C. Parks. But Parks doesn't want it.

There's a lot of things that in building a good type of park…. There's a lot of costs that wouldn't be there, because they'd be carried by the private sector. It's a stupid little thing. Even building a trail, in theory, we can't use the cedar that's in the park to build a cedar sub-base on the trail. We have to move the cedar somewhere off in the park and then bring in new materials. I think someone has to take a look at the financial thoughts around that.

L. Mayencourt: You mentioned that you've got a P3 partnership for your water and sewage treatment plant. You mentioned only one problem that you've had with it, and that's with the portability of the pensions. Were there other areas that you had problems with P3, or has it just been a roaring success?

R. Hellberg: It's a good, mature relationship. There were problems as we went along, but we worked them out. It's been a very good success. We went from having very close to the worst water in B.C. to the best water in B.C. at no extra cost. The price to us is the same now as it was before.

L. Mayencourt: Could I ask one more question? That's to do with the airport. Are you saying that the infrastructure at the airport is good at the moment, but it needs to be maintained and properly looked after over the next few years, and you don't have the resources to do it here? How do you envision you might do that with YVR?

R. Hellberg: With YVR…. What happens with most of the municipal airports is that people scrape enough money to keep them operating, but they don't look after the replenishment, the refurbishment — the depreciation, in other words. When they come up and all

of a sudden you get a runway in need of a complete resurfacing, which is a $2 million job, you don't have the money there. The runway continues to deteriorate.

Before these things were given to us as gifts, the federal government looked after the infrastructure and maintained it. They get — the last count I had — $67 million profit from YVR. You really only need somewhere in the order of $15 million to $20 million a year, as long as it's put in on an ongoing basis, to meet a lot of the capital requirements at smaller airports. What they would be doing is returning B.C. money to B.C. airports.

L. Mayencourt: So your suggestion is that we go to the feds and say that we need about a third of what they're making to come back into the community?

K. Krueger: With the tragic events of September in North America, I think there's a new recognition throughout the United States and Canada that our countries, our people, are best friends. We're in places where we each want the citizens of the other country to feel very secure. There may well be economic activity that results because people are not as willing to travel internationally outside North America.

In my previous life my family and I made the Circle Tour out to Prince Rupert on the Queen of Prince Rupert and down Vancouver Island a couple of times. What are your thoughts about the ferry system? I know that people in the Highway 16 corridor have expressed a desire to have the service doubled. They've said that their motels tend to be full every second day as a result of the way it's been in the past. Do the communities here have any input about what you'd like to see from that ferry run?

R. Hellberg: We work with those people on Highway 16, Kevin, and we have exactly the same problem. Every second night we're 105 percent, and the other night we're 50 to 55 percent. You can't make money like that. It's a fairly short season, and that's why we had lobbied for a long time, and it took a lot of effort to get that third ship in the capital budget. That third ship would actually double the capacity, because what it would allow is a daily run in the summertime. There would be a ship each way, each day, from Hardy to Rupert.

For example, the ship holds roughly 600 people. You get one coming down with 600 on it, and they arrive here about 11 o'clock at night. Those people want rooms. You've got people catching it the next morning, so they get here the night before. All of a sudden you've got 1,200 people in your town. Sure, some of them are motor homes and that, so they'd go into RV sites, but a great number of them use hotels. It's a real problem. That's true all the way up and around the route.

K. Krueger: I'm an inlander, being from Kamloops, and ever since I've been in Kamloops, people have been brainstorming on how to persuade the tourists to stick around for another night or two rather than just buy a burger and some gas and keep on going. People have come up with a lot of good things. There seems to be a new golf course every year, pretty much. People are sticking around.

I can't be an expert on all issues. I'm not sure what the state of sport fishing is for the area. But how is it going, as far as developing attractions to keep tourists in this area as they take part in the Circle Tours?

R. Hellberg: We've been doing quite well. There are a number of new hotels. There are a number of high-end tourist operations — fishing. There's a fair amount of hiking, a lot of kayaking, etc., and high-end ecotourism tours. The problem is — Kamloops would feel a bit of it too — that if the ship only sails every second day one way, and they're booked solid in about April, and you're warned that you have to meet that boat-sailing time or you're s.o.l., you probably won't get on for another three to four weeks.

R. Hellberg: Something like that, yeah. I'm trying to be couth — very uncommon. What happens is that once those people start setting out on their trip, they know they have to hit Rupert or Hardy on that certain day. So if they stop by a place that has a real good thing that they like, they know they can't stop because they're going to miss the ferry.

Whereas in our business plan, the ferry would end up at roughly 75 percent occupancy each day. People know that the maximum they might have to wait is another day or two, but they can take in that event. People come in, get off the boat, and the next day they look around and say: "Boy, I'd like to do that." They've got one day of grace. They can go in there, and they can get another hotel room. The next night the hotel rooms are all booked, too, and have been for a long time.

K. Krueger: Is there any way, Russ, to stretch the season, or is it just that short?

R. Hellberg: No, it can be stretched. But the first thing is to get rid of that bottleneck in the centre and get a nice tourist experience going. By the way, that would also help our commercial traffic, because right now there's no room for commercial traffic in the summer because of the constraints on the boat.

B. Lekstrom (Chair): Russ, I would like to thank you. I'm certainly all too aware of the issues you brought up. That great gift of the airport — I went through that in Dawson Creek. I'd like to give that gift back, actually.

One of the most important things you've touched on is the issue of the resource communities and what

they mean to this province. You, Gerry and I working over the years recognize it, and we have to make sure that the people in the southern part of our province recognize what drives the economy in this province. I can tell you that there's a good number of voices in Victoria now making sure that's heard. I thank you.

R. Hellberg: I find it very friendly to visit down there now. And by the way, I didn't have to take my airport.

B. Lekstrom (Chair): We are going to move on to our next presenter this evening, who is with the Stolt Sea Farm, Dale Blackburn. Good evening, Dale.

D. Blackburn: Good evening and thank you. I believe you are just receiving the presentation I have for you, so at this time I would like to thank all members of the committee on behalf of our staff for the opportunity to speak to you.

If you go to the first page in the presentation, I'd like to acknowledge the significant tax reduction — 18 percent — which the government provided to corporations. We also appreciate the elimination of the capital tax. Both those issues will help us to remain competitive in a very, very difficult world, made even more so by the events of September 11. Lastly, as individuals within our company, we would all like to thank you for the reduction in personal taxes. We do note that we are getting down to amongst the very lowest in Canada. Those incentives you've provided to us are greatly appreciated.

The purpose of my talk this evening is to give a very brief overview of our operations, to touch on some of the constraints we face as a company and, lastly, to leave some recommendations with you that will help make our industry sustainable and competitive in the long run.

Incidentally, this was prepared for PowerPoint, and I wasn't able to give it to you in that format, so you have to pardon me shuffling for papers this evening.

I would be remiss in giving you our presentation if I didn't touch on the global situation. Many people think that salmon farming in British Columbia is a very, very big industry, but if you go to the next page, I have listed production estimates for various countries on a worldwide basis. You will note that B.C. is now No. 5 in the overall world production of salmon. This year Norway is going to produce approximately 540,000 tonnes. I've rounded these numbers down because they are only estimates, and it's hard to get the exact numbers from those countries. But you will see Norway at 500,000 tonnes. Chile, which began producing salmon at the same time as British Columbia, is going to produce 400,000 tonnes. Scotland is going to produce over 140,000 tonnes, and the Faroe Islands, which are tiny specks that you can barely find on the map of the North Atlantic, are going to produce 60,000 tonnes of salmon this year. British Columbia is going to produce 55,000 tonnes. You'll see that there has been a lot of fuss over our industry, but in the global perspective we're barely a blip on the horizon.

Our company began operations in British Columbia in 1985. We only had six employees at that time. Today we employ over 140 people. They work throughout all our operations — hatcheries, sea sites and in our head office, which is situated in Campbell River. We are an international company, and we do have operations throughout the world. In addition to salmon, we produce such items as turbot, which is farmed in Spain — and, I might add, very profitably at this time. We've been on the forefront of halibut research and development in Norway, and we have sturgeon operations in California which produce caviar. To support this, we have an extensive sales network in Europe, North America and Asia. I would note that in Asia we have five different offices operating. That's significant for us in British Columbia, because we are producing a commodity that is shipped 85 percent out of the province. The revenues we generate are dollars coming back into B.C. They're not recycled dollars as some of the other industries have.

I think direct contribution in British Columbia is best shown by several factors, but I have on the next page just some salaries. These are taken straight off our payroll in Campbell River. In 1998 the salaries our company had were $4.5 million. You will see that year-to-date — and these are for a fiscal year ending on November 30 — salaries for our operations this year will be $6.5 million. Those people live from Courtenay to Port Alice and Port Hardy. We do have one hatchery in Duncan, so we're not totally North Island, but we're pretty close. Those are direct revenues injected through families here.

I might add at this time that there is a processing plant, which Gerry would like to tax or get some of the revenues from, at nearby Ingolet. That's situated here in Port McNeill. Those salary figures are exclusive of those generated at Ingolet. There we have between 100 and 120 full-time employees working, and our salaries this year are budgeted at another $4 million. All told, from our company's operations there's over $10.5 million in salaries put back into the local economies each year.

The next page shows where we are from an operational standpoint. I guess the most significant graph is the market crisis. You'll see that in 1998 we were getting just under $2.50 (U.S.) per pound for our product. This year we're looking at getting just over $1.50 (U.S.) per pound. What this translates into is a very, very tough environment, and like many of the resource industries, we are facing hard times. There is no question about it. On the left — and I won't go into these numbers; they are there for your perusal — it gives you an idea of the earnings for our company as well as our annual production. Those, again, are in millions of pounds and millions of dollars. You will note that this year, in spite of a significant increase in production, our gross revenues have dropped to below 1998 levels. That doesn't bode well for a business trying to work in rural coastal areas.

Cost of doing business in British Columbia — fortunately, it's not all bad news. In fact, there is some

very, very good news. We do have an extensive coastline, and we have some of the best growing conditions that you can find anywhere in the world for producing salmon. More importantly, we are strategically located close to the United States and, with thanks to YVR, some of the best access to Asian markets. Unfortunately, to balance this — and Mayor Hellberg touched on this — we do have a distinct lack of infrastructure, so anything you can do to support this will be greatly appreciated.

Although we have some of the best growing conditions, at times we're faced with some of the most difficult conditions. We have plankton. We have several different species of noxious plankton, which actually kills our fish. We've learned to work through this, but again one of the issues that we face is lack of support and less research and development. The federal government has come to realize the tremendous contribution our industry can give to the community, and they've put $75 million into that. We're hoping to solve some of those problems with the use of this money.

There are other issues, such as high-energy sites. We have a lot of current. Our waters are extremely nutrient-rich throughout all of British Columbia. That's not because of the farms; it's just a natural phenomenon. Because of that, we get tremendous amounts of growth on our nets and our cages. It does take a lot of money and lot of effort to deal with that.

Last but not least — and this is where you come in — the regulations that we're facing are often burdensome and expensive. As a quick example, I've given you a graph or a chart showing some of the mandatory training that we face within our operations. You'll see that right now there are 11 — and again I apologize because this is a combination of federal and provincial, but the lion's share of these courses that we are required to put all in place are provincially driven — and those do not include a vast myriad of other courses that we have as part of our internal operations. Basic cost per employee is $1,600. That may not sound like a lot, but when you have 100 sea-site employees, that's $160,000 that we're spending on training our employees. That's just so they can get up and go to work each morning, and we're not faced with charges to WCB or other regulators.

Workers Compensation costs. I hope I'm not offending anyone by putting this front and centre. You have the numbers in front of you. You'll see that in 1998, our assessment rates were 1.97, and they've jumped up to 3.76. The only time that as a company the claims we had were more than our assessment rates was in 1999, and that was a scant $1,000 difference. In 2000 you see our rate at 2.68 and a cost to our company of $153,000 in direct WCB versus a payout of $88,000. This year things have gotten even worse. Where 3.76 is our assessment rate, we're going to spend well over $230,000. Thanks to a lot of the work that's gone on, our claims have fallen. That is the good news, but there seems to be a significant disparity here when we're claiming $73,000 and paying $233,000 in premiums. I don't know if anybody would want to do that for very long.

There are other areas we're faced with, and our costs seem to be escalating. I've got a page on leases and applications. Before the year 2000, it cost us approximately $3,000 to $5,000 to file a lease with the government. Last year it cost us anywhere between $60,000 and $100,000. The variation is because there are a lot of requirements that are site-specific. This does not even guarantee that we will be granted the lease. This is just what it costs us to make the application for the lease.

Going along with the increase in lease fees are the costs for sampling around our sites. Again, the numbers are right there — $500 approximately per site before 2000. Last year we were looking at about $5,000 per site, and next year we're looking at between $10,000 and $14,000 per site just to do the sampling. We're not in total disagreement with this, but we believe there has to be a way to make these costs more reasonable for the outcome.

In summary, I think it's fairly obvious — you have our gross sales, and you know what our salaries are — that we are making a significant contribution to local economies. The production numbers, the tonnage, clearly indicate that in British Columbia we lack the economies of scale. If this industry is going to grow and remain competitive, we are going to have be bigger. If we're bigger, we're going to provide a much broader and better tax base for you to draw on. We can only do that if we have new sites. It's critical that you work with your cohorts to ensure that new sites, both for our hatcheries — that's on the freshwater side — and on our marine site, are made available to our operations.

There are many regulations — and you have a glimpse of some of them — that need to be rationalized. Again, we're not opposed to regulations, but the requirements are so stringent now that it is unlikely we'll hire summer students. That's simply because we can't afford to train them if they're only going to be there for one or two months. That's a travesty. We don't get to look at our workforce or our future employees simply because of ergonomics, hazardous materials, the courses that are required…. And the list goes on and on. We can no longer take the chance. We were written up at one of our sites last year because we hadn't fully trained the student. The person was new on the job. We were inspected just days apart. The inspector arrived just days after the student arrived. That's a difficult situation to put our managers in, and we won't do it.

Lastly, we believe our salmon farming should be reclassified under the farm act. We were taken out of that a number of years ago, and as farmers we are producing a crop. We're working in an environment that is very forgiving and friendly at times, and other times the environment we face is downright hostile. The only thing we can say for certain about the environment is that it is totally unpredictable. Because it's unpredictable, we're forced to work long and varied

hours. Because we're not classified as a farm, we no longer have the flexibility to work and structure shifts to reflect the changes or the requirements that the environment brings upon us.

What I've presented to you is a very brief overview of our company and some of the issues that we face. The lists that I've given you are by no means extensive or exhaustive, but there is one issue that is very clear to all the people involved in salmon farming here in British Columbia: we do need regulations, and we need sound regulations. We need regulations that are based on science, and we are working to come forward with those. As we need regulations that are based on science and that protect the environment, we also need regulations that recognize the unique needs of a unique industry.

Fifteen years ago there was virtually no industry in British Columbia. What I've presented to you is all developed on individuals' money, with no grants, subsidies or anything like that. This is money coming into the province. We'd like to have more opportunity to spend it here, but our shareholders, like any other shareholders, want a return on capital. The cost of business in British Columbia is getting to the point that we're no longer able to deliver an adequate return to ensure that we have the investment to keep our businesses going. I encourage you to get to know our industry better and to support those of your MLAs who are working tirelessly on our behalf to help get this industry going. That is my presentation.

B. Lekstrom (Chair): Thank you very much, Dale, for your presentation. I believe we have a couple of questions. I will go with Tony first.

T. Bhullar (Deputy Chair): Dale, you indicated that at one time your business was classified under the farm act. Can you indicate why it was removed from the farm act?

D. Blackburn: I do not know the reason behind that, but it happened eight to ten years ago. We were taken out of the farm act, and I believe we're under general manufacturing — production and manufacturing.

K. Krueger: Thank you, Mr. Blackburn, for a really interesting presentation on a fascinating industry. I've been intrigued by it for so long. I was amazed to hear years ago that we had one fish farm that was producing more salmon than our largest wild run, which I think is the Adams River run up through my constituency.

I was looking at your page about your other activities around the world and noted that you're producing halibut in Norway. I wondered if you could produce halibut here. Perhaps there are the same constraints as in game farming, where indigenous species aren't farmed for fear of causing population problems. Can you do halibut in British Columbia? And if not, could you possibly do non-indigenous species like sea bass or sea eels?

D. Blackburn: Well, to answer your first question, we have worked on halibut in British Columbia, and we worked with a commercial fisherman. We had a project that worked for two years. We brought live halibut. We held them in farms, and the goal of the project was to sell these halibut off-season to the commercial catch so that we could realize the increased price during winter months. There was difficulty with the biology of the animal, and as a consequence, any gains that we were able to realize were lost through mortality in the fish.

We're considering various things, but one of the areas that there's a significant lack of is support — the research and development, the educational institutes that are necessary to provide the backup for this work we're doing. We are a production company. We can only play at things for so long. If they don't make money, we can't continue to play. After two years we had to shut this project down, because it just wasn't economically viable.

K. Krueger: Is there any future for other species that aren't indigenous, like sea bass or sea eels?

D. Blackburn: There may be. We are currently doing some work with black cod and sablefish in British Columbia as well. When times are very difficult, as they are now, we have to concentrate on our core business, and that's the production of salmon. So we're pulling in our horns and looking at what puts the dollars on the bottom line.

K. Krueger: A word of encouragement on the WCB and Employment Standards Act issues. We are going full-bore on reviewing those problems. There is currently a full review underway with regard to WCB, and your submissions are welcome there. With regard to the Employment Standards Act, we're determined to rewrite the act to allow employers and employees to work out relationships that work for their industry. If you've hung on this long, you've already reached the light at the end of the tunnel. We want your input on those things, so feel free to do a subsequent submission.

B. Penner: I noted some interesting concern that market prices seem to have fallen off dramatically in the past year or so. Is that a function of a large increase in world supply of salmon, a drop in world demand or some combination of those two factors?

D. Blackburn: It's primarily a function of an increase in supply. Chile, which began operations at the same time as British Columbia, is our main competitor in the American market. They've jumped up over 100,000 tonnes in one single year. Back in 1985 British Columbia was actually producing more salmon than Chile. Now you can see the significant difference. The seafood market in the United States has been fairly

constant and growing at a reasonable, steady rate, but there is a tremendous worldwide supply which has been basically depressing prices.

B. Penner: Is there a ballpark price that we have to see on the world market in order to justify further investment in fish farms in British Columbia?

D. Blackburn: Well, at the current levels right now the industry is not sustainable. There are anti-dumping suits being launched in the United States against the Chilean industry. We have reached the crisis level.

B. Lekstrom (Chair): Mr. Blackburn, I want to thank you for your presentation. As Kevin said, it was very interesting. The issues you have brought forward are issues that the government is looking at and dealing with. Hopefully, they will be resolved in favour of a better future for the business that you're in. I thank you.

K. Dyson: Good evening, Blair and the rest of your group who have come up to northern Vancouver Island. Welcome, and I hope you enjoy your short visit.

My presentation tonight will be verbal. I'm going to take more of an overview position. I'm a logging contractor at Englewood. That's the valley just south of here. Our company employs about 50 loggers. I've lived in the Campbell River area all my life, about 52 years.

One comment I want to make before I start is that I am proud this government has kept its promises. However, there's a lot of work left yet, and I know there's going to be some blood on the streets, but I want you to stay focused.

My first issue is that government must get its fiscal house in order. We need to balance budgets and reduce debt. I believe we can't spend our children's future. We have missed a real window of opportunity over the last ten years to address this issue. I'm quite choked about this. There's nothing we can do. We must get on with business. The longer we wait, the greater the pain. We must realize that we need to be competitive, just like Dale said earlier, especially with our closest neighbours, Alberta and Washington.

Government must stay focused on core services such as education and health care, which I believe have been run right into the ground both federally and provincially. Core services need to be reviewed to get the best bang for our dollar. I don't think we need to be everything to everybody. Throwing more money, say, at the health care system won't fix it. I believe the system is broken. I don't have a quick fix for it, but I don't believe band-aids will do any good. I also believe that any service we can do privately should be done privately.

We need to stimulate the economic climate in this province. Your tax reduction for small business and the PST exemption on some of our logging equipment certainly help us to operate in marginal times like right now. We've probably only worked about 50 to 60 percent of the year this year. We've been up and down. It's been a very dismal year for us as contractors.

You may want to revisit the PST and put it over some of our other costs we have — for instance, the roadbuilding and the hauling. It is on some of the hauling, but it isn't on highway hauling. It makes it rather difficult — but we do it — to keep the harvesting part of it separate from the hauling and the roadbuilding. There's a lot of it we can't allocate, because we don't hire warehousemen as such to allocate it at the purchase. It would sure be great if we could get the exemption over the rest of the operation.

Tax reduction is a must for the individual. I've noticed our fellows get about $50 to $75 more a paycheque now, and they really need it. They've worked a much shorter year this year, and they're the ones that are really hurting, as well as ourselves. I really appreciate that tax break you gave us and them. I believe that money left in the hands of an individual or a corporation is far better spent than in the hands of government. Don't forget it — eh?

This province needs good, long-term, well-paying jobs so that we can be able to afford these core services. We don't need government jobs; we need private enterprise jobs — for instance, like Dale was saying, with the fish farms. There's great opportunity in the harvesting in our forestry sector. If instead of us getting residualized, like we have been in the last ten years…. Our land base has been shrinking, and parks have been growing. We need to get some of that back and get our harvest up. It is a core business of this province.

I would like to see our government stay focused and work quickly and diligently to get our province back on track. Government must stick to governing. I really don't like to see government getting involved in private enterprise, like the Skeena fiasco, or trying to build highways.

Government should attract and assist small businesses and not bury us in regulations and red tape. For instance, we have our Forest Practices Code. For instance, we'll haul rock out of one spot to dump it in another spot to build a mountain. I don't know why we do this when we can just set it over the edge of the bank. Anyway, we build mountains. We spend a pile of money, and I don't see that there's much gain. Somehow we've been inundated with regulations, and I really appreciate your regulation review that's going on.

There are a couple of topics that are near and dear to me, and I can't let them go. One is that being a logging contractor, I know you're going to look at your forest policy. I believe we don't need any more band-aids in our forest industry — little stumpage breaks and this kind of stuff. It's time to rebuild our industry from the bottom up.

We need to address the tenure system, stumpage, manufacturing, value-added, marketing including the softwood lumber agreement, and research and development. I don't think you need to listen to some of the

other major companies, especially the ones that have come from the United States, talking about us playing jump-ball, where we bid on a tenure and small operators like ourselves won't be community based anymore. We'll maybe work here for a few years, and then, by God, we'll manage to scrape up a job in Terrace, so we'll run up there. We'll maybe log for a couple of years. That does nothing for our communities and nothing for our people.

I also have trouble with this corporate concentration in our industry. I don't believe we need major forest companies to own all the tenure, the rights to the trees, when the trees are actually ours. They can buy the trees off of us after we harvest them.

We also need a secure land base, which was one of the promises that Gordon Campbell has made to us. I want to talk on that land base. If we're going to change how we operate on that land base — and they're talking about eco-based forest management, which will probably reduce our cut somewhere between 10 to 20 percent — then I believe we should look at some of that parkland to harvest. If we're going to manage biodiversity over the whole landscape, then give us back some of those parks that were taken away from us. I really agree with Russ on getting access into the parks.

We also need regulations that are performance-driven, not these penalty-driven regulations that we have with the Forest Practices Code and this type of thing. Let's get something that we can live with out there. I know the people we work with — Canadian Forest Products — are just inundated with regulations.

Now, my favourite subject is the WCB, and I don't have any solutions. I used to sit on the employers forum, and some of those different labour-management–type ways we operated that beast…. Anyway, I believe WCB is totally broken. You've got to start right from scratch and rebuild it. We pay good money into that. I believe our assessments are somewhere around 8 percent right now, which is a big number we pay those guys.

We can't get them to respond. We've actually been waiting now for 18 months to get them to talk to us on one fellow that's been off, to find out what the status of his claim is. You have to write a letter to the president. We just can't go anywhere there. It also doesn't help our people that are hurt, either. The stuff they have to put up with is just awful. If somebody's hurt, look after them. I want to encourage you to really take a serious look at the WCB. It's broken.

Another one that's really going to hurt us here is education and apprenticeships. We're seeing it in our industry now. We've had lots of people laid off, but we have a shortage of skilled workers around here, believe it or not. To get mechanics, engineers, equipment operators, some of the well-paying jobs that we have…. An equipment operator makes good money. There are very few skilled people around. We've been trying to break them in and train them, but it's very, very expensive. There's got to be a way that we can train these people and have them stay in our industry.

B. Lekstrom (Chair): Ken, I want to thank you. It's tough to get the message across in 15 minutes. I think you've done a very effective job. In trying to get to as many people as we can, we've had to cut it to that, but you've put forward some very interesting information. We do have time for one question, if there are any.

B. Lekstrom (Chair): All right. It looks as though that's the case here. Ken, again, thank you very much.

Our next presenters this evening are with the Canadian Federation of Students: Danielle Burrows and Rob Mealey. Good evening.

D. Burrows: Good evening. My name is Danielle Burrows, and this is my colleague Rob Mealey. We are members of North Island Students Association. The association is made up of students attending all North Island college campuses and centres from Ucluelet all the way up to Bella Coola. The North Island Students Association is also Local 72 of the Canadian Federation of Students, and as such we fully support the petition already articulated to you by the B.C. chairperson, Summer McFadyen.

Rob is going to go over a few key points for the committee to take into consideration during its deliberations.

R. Mealey: I'll try to keep it short and sweet for the committee. I sense short is good.

First of all, thank you for the opportunity to present to the committee. I'm happy that the committee is actually travelling the province and visiting communities such as Port McNeill. I think that's great.

There are a couple of points I'd like to touch on tonight, mainly regarding education. First of all are the tuition fee freeze and the reduction that just recently happened. I want to touch on the need for this committee to recommend that the minister look at maintaining the tuition fee freeze. The tuition fee freeze and the 5 percent reduction have been very helpful to the people in this area in accessing higher education, improving their skill set and becoming better citizens. At a time of major economic upheaval in this region — due to such things as the slump in the forestry industry, the fishing industry and what have you — more and more people need to upgrade their skill sets to get back into the workforce, to open small businesses, to participate in the economy fully.

Any increase in tuition fee levels will be very detrimental to the people and the economy of this region

and the province as a whole. If fees are increased, more and more people will face the prospect of not having access to education, of not being able to improve their skill set and to learn the skills required to move to another industry — if they're fishers or loggers, for example, to open their own business if they choose to become their own employers — or to do things that'll help improve this region. If they don't have that opportunity, how will they be able to give back to the community?

We're not just talking about a certain age group like 18-year-olds, for example. North Island College actually serves a wide variety of socioeconomic backgrounds and age groups — from 18-year-olds attending classes here to 80-year-olds attending classes there. I actually know an 82-year-old taking a class in the Port Alberni campus. He taught me a few things. If the fees had gone up for the last couple of years, people like him would not have been able to access the education.

The second issue I'd like to touch on is regarding core funding for institutions. The recent announcement that funding for health and education is being frozen for the next three years essentially equates to a cut in funding. It doesn't take into consideration such things as inflation, any contractual agreements that colleges or universities may have, increased operating costs — heating, paper, what have you. Without an increase in core funding, colleges such as North Island, among others, will face the prospect of not approving education in the outlying areas. North Island College actually has 13 or 14 campuses and centres, as Danielle said, from Ucluelet on the west coast all the way up to Bella Coola. Without an increase in core funding over the next couple of years, the college will be forced even more to concentrate classes in the larger campuses to the detriment of the smaller communities.

This, unfortunately, brings up a problem. As more and more people need the education to improve themselves in our communities, they'll be faced with a scenario where there are going to be two things they can do. On one hand, they can choose to stay in their communities and not improve themselves and therefore not help the economy by not participating, by not working.

On the other hand, they can choose to move to a larger centre to get that education, but at what price? Unfortunately, this would lead to higher individual debt, as they would be forced to take on student loans and other such things to get that education. At the end of the day, these people will have higher debt loads. They won't have any extra income to spend. Without any disposable income they'll have the education and start working, but they won't be able to buy things to help the economy get going.

Another thing I want to touch on is that I understand there's been some talk about maybe increasing fees to improve the quality of education and access. I just want to remind the committee — and I'm sure that you've already heard from other presenters — that increasing fees will not increase quality or access.

The best example I can give is the case of Ontario. In the province of Ontario, over the last couple of years, we've seen tuition fees go up anywhere from $1,500 and more. The fees changed depending on the program. Because of the increase in tuition fees, access was reduced, which hurt people right there. And what did the tuition fees go toward? The government did not increase funding in Ontario, so the quality of education was hurt because even though students were paying more, less money was spent on classes. In some cases, such as the University of Toronto, even though tuition fees went up, more money was spent on bursaries and scholarships to help access than was gained through increased tuition fees. Again, at what cost? That didn't work at all.

In closing I just want to urge a couple of things to the committee. When deliberating and presenting your report to the minister, it's my wish that the committee keeps a few things in mind. First, we absolutely need to continue the tuition fee freeze, with serious consideration toward reducing fees further than the 5 percent that's already been done to improve access, to improve our communities and to get more people into the educational system so that they later become better citizens and help to improve the economy. The second point is a need to increase core funding for institutions beyond the rate of inflation, to help colleges like North Island provide the services needed in the rural communities so that people don't have to face the choice — the hard choice, in many cases — of moving away.

That's basically it. Thank you very much for this chance to give a presentation tonight.

B. Lekstrom (Chair): Danielle, Rob, I would like to thank you for presenting to us this evening. I will look to members of the committee for questions.

H. Bloy: Thank you very much for your presentation. We have had a number of presentations. Did I hear right? Are you opposed to bursaries and grants? Would you like to see that reduced from the tuition? Is that what you said?

R. Mealey: The problem with bursaries and grants is that many times they don't actually reach the people who need them the most. Many bursaries and grants out there are program-specific and usually go to those who may be doing the best academically, without any consideration to their socioeconomic status. Unfortunately, there are some rich kids out there who, because they're doing well in their certain program, have access to bursaries and scholarships, while there are those from other backgrounds who need that money desperately but don't have access to those programs.

Scholarships and bursaries are not the panacea that's going to help everybody. The main focus should be on improving things overall. The cost of education, of course, includes everything from tuition fees to supplies to food and rent. Obviously, the government's not going to get into rent and price controls or that sort of thing. Where the government can change — and

change for the good — is in tuition fees. That's where the government should focus.

H. Bloy: Okay. Just one other part: do you have a suggestion on how we can do that? One of the lines is that you want to stimulate the economy. Is there something that the Canadian Federation of Students could do? You collect over $100 per year — 8 to 12 percent of a tuition fee. Are you prepared to reduce the amount of money you collect from your fellow students to help them with their tuition?

R. Mealey: I think that's a totally separate issue. Student association fees and the federation fees were democratically set by the membership. We democratically created student unions. In the case of North Island, 91 percent voted in favour of forming a student association. We also democratically voted to join the Canadian Federation of Students. Again, in the case of North Island, 91 percent were in favour of joining the federation.

H. Bloy: I'm not debating that. We're looking at ways of making it less expensive for students to go to university.

R. Mealey: If the government were willing to let students set tuition fees, then maybe we could talk about it. I think, basically, that fees such as student union fees, federation fees and association fees are totally separate. They're set by the students, and they're used directly by the students. The tuition fees, even though they're technically set by the institution, are in fact really set by government through the ministry. The tuition fees are the biggest chunk in terms of the student's budget and what they have to pay each year to attend school.

H. Bloy: I would say that living costs would be a much bigger chunk. Actually, the cost of the tuition is less. When it's taking five and six years to complete a four-year university degree, the tuition isn't that big in comparison to what it costs them to live for those extra two years.

R. Mealey: As I stated earlier, obviously government is not in a position to implement wage and price controls on such things as rent. We need to focus on such things as tuition fees.

B. Penner: Just a question I'm curious about. Would you be philosophically opposed to having people from wealthier backgrounds or people who can afford it pay a larger percentage of their tuition so the government can then be in a position to offer greater financial assistance to those with lower incomes who can't afford to go to school? Keep in mind that currently taxpayers do subsidize post-secondary education to the tune of about 80 to 85 percent.

R. Mealey: Yes. Philosophically I think that students should be paying the same regardless of socioeconomic background. What I think needs to be recognized is that education is a long-term investment in the future of the province. We need to recognize that those who do attend college and university have a greater chance of getting a higher-paying job and therefore having more disposable income. In a proper tax system, of course, those who make more money pay more taxes. It's my firm belief and the firm belief of the federation and many students that, because we are going to be getting a better education, when we graduate and start getting those high-paying jobs we will pay back to the system through our income taxes and through other taxes what it cost us for our education and more. In the short term we must focus on access. We must keep fees low, recognizing that in the long term we will pay back our fair share through our taxes.

B. Lekstrom (Chair): Danielle and Rob, once again, I would like to thank you for taking time to come and present to our committee this evening. Thank you.

K. Carson: I want to welcome you to Port McNeill, and I'm going to start by telling you a bit about me. My family and I moved to Port McNeill seven years ago. I'm 42 years young, and I've been the wife of a logger for 23 years. My husband and I have a 20-year-old son who graduated in Port McNeill in 1999. Our son now lives in Vancouver and works for A&B Sound as an installation technician. We have a 17-year-old daughter who will hopefully graduate this year.

I've been a volunteer at the local hospital for five years, mainly with their detoxification program. I'm a part-time employee of B.C. Ferries, which means that I'm a member of the Marine Workers and Boilermakers Industrial Union. I'm the manager of the Port McNeill RCMP victim services program, which, believe it or not, means that I am a member of the IWA union. Up until last year I was a member of the BCGEU, because I worked as an outreach worker in Port Hardy. I resigned that job in order to manage the victim services program in Port McNeill. In the past I worked for a doctor at a methadone clinic as a recovery worker, among other things.

Right now I'm also a volunteer manager of the Port McNeill RCMP community justice programs, also known as restorative justice. I'm a board member of the Myasthenia Gravis Foundation of America and the treasurer of the Myasthenia Gravis Association of B.C. You can imagine the agony I have been going through in trying to decide what to talk about tonight, especially in only ten minutes. Don't worry; I won't be that long. I'm too nervous.

I'd first like to say that I'm mainly in support of the current government's programs and services cuts to date. While it's not easy to make such cuts, it is indeed understandable that these cuts need to take place. I would mostly like to talk about the environmental

program cuts that I read about in the October 2001 BCGEU newsletter called The Provincial, which I still get in the mail. I copied it for you. It's at the back of the package.

Many of the environmental programs outlined for cutbacks are programs that were developed by non-governmental organizations, known as NGOs, and forced onto the previous government, who in many cases were sympathetic to the programs. With the best intentions, the government and the bureaucracy, who were also sympathetic to NGO ambitions, incorporated these ideas into government activities. While I appreciate the attention the new government is placing on these issues, perhaps this year the Western Canada Wilderness Committee people or the Suzuki Foundation can fund their own programs for a change. I would like to quote John Winter, president of the B.C. Chamber of Commerce: "We are facing tough economic times and need to do all we can to encourage economic growth. Government must not succumb to the smokescreen of environmental protesters who don't represent the views of most British Columbians."

I was happy to read on the Internet this morning the news of offshore drilling. I quote Vancouver.com:

I believe it's time to move forward with offshore drilling, land claims issues, reducing government red tape. Please relax the moratorium on salmon aquaculture. As you and everyone else in this room knows, British Columbians voted for this government to make some changes. I'm ready for the changes, and I think the rest of British Columbia is also ready. I want to urge this government to not back down.

Before I finish, I'd like to caution the government to please be very careful that the cuts they make do not put our volunteer organizations in jeopardy. I could personally attest to the benefit of having volunteers within the victim services programs and the restorative justice program. To lose volunteer support would mean that these programs would not exist in the future. While I know that grants for volunteer groups have already been cut, I would like to ask that this committee consider a taxable benefit to those who use their own fuel and who pay their own expenses for organizations that do not have any ongoing funding. This may help to keep our volunteers in the future. I'm done.

B. Lekstrom (Chair): Kelly, thank you. I think you did a terrific job in presenting. I will look to members of the committee if there are any questions.

L. Mayencourt: Just a quick comment. I used to run a volunteer organization in Vancouver, so I know how important voluntary community groups are to making a community nice and healthy and for people to be involved and all that. I think your suggestion is a real good one, and I thank you very much for it. We'll certainly consider it and put it into our report.

C. Ross: My name is Colleen Ross, and I've been an accountant working in public practice for the past 19 years. Campbell River has been my home for 17. Through my experiences with small businesses, I have witnessed an alarming increase in the time and human resources that small business has to dedicate towards dealing with government-imposed regulations and red tape. I applaud the current government and this committee for giving us the opportunity to share some of our experiences. I am confident that it is our common goal to restructure taxation and reform bureaucracy. This will, in turn, allow us to focus on pursuing opportunities to expand our business in these uncertain times and become prosperous once again.

My definition of a small business corporation consists of fathers and sons, mothers and daughters, husbands and wives and best friends. These companies are small, consisting of two or three shareholders. Any retained earnings in the company are for the benefit of future expansion. These people build their hopes and dreams and save for retirement around their companies. They love their children and donate back to their communities. These are my corporations.

Unfortunately, I do not have the solutions for the current situation we are in, and I appreciate that you, the committee, have enormous challenges ahead of you. My goal with this presentation is to highlight two areas that you should consider in your upcoming budget. In that context, I've chosen to provide you with two examples of how government has either overburdened or abused my small businesses that I referred to above.

Provincial sales tax and Workers Compensation Board. My first example consists of a lodge offering lodging, meals, ecotours, hunting or fishing to its guests. The calculation for the provincial sales tax is a nightmare. The lodge is motivated in such a way that it doesn't matter what combo of meal, accommodation, fishing, ecotours, etc., they sell. They just want to generate income, so many combinations of guest packages can apply on a given day. Typically, the lodge offers all-inclusive packages, because that is what their customers want.

To assist in the calculation of the tax to be charged on this type of service, the consumer taxation branch has issued Bulletin 021, which I have included for you. Bulletins are only provided as guidelines for convenience. For the specific rules of the calculation of the tax, you must refer to the Hotel Room Tax Act.

I have summarized the bulletin for you. Accommodation sold separately: total 8 percent sales tax applies. Accommodation and one meal included: 8 percent tax on accommodation; meal subtracted. Accommodation and two meals included: if accommodation is not offered separately, tax applies to 60 percent of all-inclusive price. Package programs. Accommodation, no meals, fishing trip: tax is normal accommodation multiplied by the number of days multiplied by 8 percent. Package programs only. Accommodation and hunting trip: taxable accommodation is 15 percent of all-inclusive price or based on $100 a day, whichever is less. Package programs only with transportation: total price less transportation costs multiplied by 15 percent or based on $100 a day, whichever is less. Packages with tent or no-amenities cabin with home-based accommodation: total cost of package divided by number of days of the trip multiplied by the number of days at base camp multiplied by the taxable rate of 8 percent or based on $100 a day.

As you can see, this is a bookkeeping nightmare. It usually requires the hiring of a qualified bookkeeper or accountant just to collect the tax correctly. I urge the government to consider streamlining the way tax is charged. Has the government considered a flat-tax rate where it is on all items at a much lower rate? This would reduce administration costs, audit costs and frustration for my small businesses. The rate could be such that it could generate the same total revenue.

My next example is the Workers Compensation Board. As posted on WCB's website, it announced changes to rate-making, classification and experience-rating plans in January 2000. This resulted in 38 subclasses with surpluses totalling $431 million, while 33 subclasses had deficits of $328 million. In their wisdom, under the previous NDP administration they forgave all of the deficits and refunded the surpluses. The total cost to businesses that pay premiums into the WCB program amounted to $759 million.

It remains unclear to me why the decision was made to forgive these deficits. To my knowledge, these changes to the premiums were for the future onward, and no one in the business community expected the rebates. I can only assume that the previous administration wanted to provide additional rebates similar to their ICBC and Hydro rebates, which coincidentally occurred around the same time of year that they announced the $431 million surpluses.

It does not appear, however, that they did their research very thoroughly. From my own experience, I have a client that paid $200 in premiums in his lifetime as a small business and received a $1,500 rebate. Another colleague received a $1,300 rebate while paying less than $100 annually in premiums for five employees. This was, to me, an abuse of my small businesses' premiums.

WCB is an entity unto itself. It has no outside party sitting on its board and is governed by public administrators. As with other boards and commissions, should it not have appointments from the public and the business community? Has the current government considered a change to the WCB, much like in the U.S. where private insurers offer the workers compensation coverage? Insurance companies submit bids, just as small businesses, and the government continues to monitor regulations and complaints. I want to be clear that I do support mandatory worker insurance coverage, but can it not be done more efficiently?

One final note is that any attempt to reach WCB for clarification or answers to questions results in long hours sitting on hold. I have asked some employees why this is, and they claim that they have too few people to handle the workload. Please cut their workload.

In summary, I'd like to remind you that my corporations consist of fathers and sons, mothers and daughters, husbands and wives, best friends. We are small, we build our hopes and dreams around our companies, and we love our children. Thank you.

B. Lekstrom (Chair): Thank you very much, Colleen, for your presentation. Like many, you can certainly see when it comes from the heart. You came across very well, I want to tell you.

B. Penner: I can't resist making a comment about the WCB. In my time as an MLA, since 1996, it's probably the most frequent agency of government that is criticized — from all accounts, quite justifiably so. In fact, a few months ago I spoke to a gentleman who used to work there in senior management in the late 1980s. He told me that they had a thousand fewer employees then, and they handled more claims than they do now. The backlogs are far greater now, in terms of getting cases dealt with, than they were then. They have more employees — a thousand more — dealing with fewer cases.

C. Ross: The backlog, from my point of view, is just getting larger and larger.

B. Lekstrom (Chair): I see no further questions, Colleen. Certainly, in your presentation when you talked on the issue of the sales tax and the information you put forward on that, I can see where we as a government have a job to do. It's our job to create a playing field for private business to come in and do their job easily and effectively and create an economic province that we all look forward to. So I thank you for your presentation.

L. Lepine: Mr. Chairman, members of the Select Standing Committee on Finance and Government Services, ladies and gentlemen, welcome to the North

Island. My name is Lou Lepine. I came to the North Island in 1970, and I'm older than dirt. I'm a small business entrepreneur; I own and operate an outdoor-power-product dealership and repair shop — outboard motors, chainsaws, lawnmowers, ATVs, that stuff.

I had retired back in 1995 but after a period of time got rather bored, so I thought I'd start up a shop, hire some skilled help and/or apprentices, create a couple of jobs and do something useful for the area. The idea was great, but there was one small problem I hadn't thought of: skilled help is very hard to find. In fact, it's almost impossible. Hard to believe? Not really. After a period of time and unable to hire trained workers, I started asking questions of other tradespeople. The answer was always the same: not enough tradespeople to go around.

This is a shame. For anyone thinking about a career in B.C.'s trade and technical sectors, there has never been a better time to start exploring work-based training, including apprenticeships. The headlines are filled with predictions about a coming shortage of skilled workers. That means a world of career opportunities for those interested in pursuing trades and technical training. If you make this choice, the facts support you. Here in B.C. it is estimated that 700,000 jobs will be opening up in the next ten years, and 60 percent of those jobs — approximately 420,000 — will be in the trade and technical occupations.

Why the big need for skilled workers? There are many reasons, but by far the biggest one is retirement. The average age of people currently employed in trades and technical jobs is 47 years old, so pretty soon many workers will be retiring. By 2010, for the first time ever, it is estimated that the number of retirees will be greater than the number of new entrants, which brings us back to opportunity.

For employers, it's a great time to begin training young workers alongside seasoned professionals, so that in a few years time they will have the knowledge and skill necessary to replace the retiring workers. For young men and women, the sky is the limit. In the coming years there's going to be a real demand in the traditional trades such as electricians, plasterers, cement finishers, power line technicians, as well as a wealth of exciting occupations springing up in information technology, advanced manufacturing, aerospace and electronics as a result of B.C.'s growing economy. The incredible variety of trade and technical occupations — everything from aerospace to electronics to filming and a whole lot in between — and the independence that goes with them make them an appealing alternative to college or university.

The Industry Training and Apprenticeship Commission's work-based programs take anywhere from one to five years, and participants earn good money while they're learning so that at the end you have good, marketable skills, no debt load and more than likely a great-paying job. Compare this to a college or university graduate with no positive job at the end of graduation and an approximate debt load, I understand, of something like $25,000 nowadays.

That brings us back to the immediate problem: the shortage of trained, qualified workers — journeymen. I spent a couple of hours yesterday with a manager of business and program development from the British Columbia Institute of Technology. He explained to me about workings of a trade school.

Right now, he was telling me, aircraft mechanics is a very popular trade. It's a glamorous trade. It's well attended, as is auto mechanics, while other trades vary in popularity. He did mention that something like plumbing is not as popular as some of the others, but then we all know that there's nothing to being a plumber. All you have to do is know three things: (1) human waste runs downhill, (2) always wash your hands before you eat your sandwiches, and (3) payday's on Friday. Nothing to it — eh?

In our area we have two secondary schools in town. One school no longer teaches trades — there's no shop in there anymore — while the other does carpentry, metal shop, automotive repairs, and so on. Why the difference in schools within the same school district? I don't understand it. I believe our problem starts right here. It seems the students do not want to pursue a trade or technical school. I don't understand why. I suppose it's not cool. I don't know. You know: "I want to go to university."

My question is: how can we change this attitude? Can we get some spin doctors, maybe, to glamorize the trade and technical schools? I don't know. We may have to reach the parents also. I don't know what's going to happen. If we do not arrest this shortage soon, we will be forced to import skilled workers from other countries. Think about it. Will this leave us with just a few B.C.-grown technicians? What will we do with the unskilled workforce? Talk about hewers of wood and haulers of water — and in our own country. I hope I can get your support to rectify this immediate problem.

B. Lekstrom (Chair): Thank you very much, Lou, for presenting to our committee this evening. You've touched on something that I share your thoughts on, and that's the lack of focus on our trades issue over at least the last decade. We've steered, I think, some of our younger generation into thinking that college and university is the only way to go, and we are facing a significant challenge now with the shortage of trades. I think many of them would be pleasantly surprised with the paycheque of a plumber, if they were to see one.

B. Lekstrom (Chair): I'll look to members of the committee if there are any questions.

L. Mayencourt: My nephew is just completing his apprenticeship as an electrician, and I'm really proud of him, as are his parents. I know that we have to do something better about getting the apprenticeship program active again — people actually enrolling in it and companies willing to take on apprenticeships and stuff.

The Education committee will be travelling through the province, and I would invite you to offer your suggestions to them in this regard.

I've left you a diagram. A picture is worth a thousand words. If you look at it, I think it's self-explanatory.

B. Lekstrom (Chair): All right. Lou, I'd like to thank you for your presentation to our committee this evening.

C. Murray: Good evening. I think Stan Rogers said it best — that you look older than dirt: "At 64 you're still one of the best, and one year more. Then you're less than dirt upon the floor." It's from song he had.

I'm here tonight, I suppose, representing tourism, as I'm involved in the tourist industry myself. Bill Shephard also asked me to do a presentation for him, as he was scheduled for this spot, but he had to be at a funeral today and could not attend this evening. Bill's the chairman of the regional district and, of course, is involved in the economic growth of the area.

In the presentation — I presume you have a copy of it up there — you'll see that it focuses on private property. The last page of the presentation is something I and a couple of other people have personally directed, and I'll get to that in a minute.

The issue of private property needs to be brought up with this government. I myself have been battling for the last ten years to address this in the tourism industry. Twenty-one years ago I took my wife and my two boys, who were one and three at the time, and we left Port McNeill with a ragtag fleet of float houses and headed for the mainland of Canada at the foot of Mount Stephens to start our tourist business. Twenty-one years later, I suppose it has undergone a modicum of success, but that's just through a focus of activity.

Private land has always been an issue. It has not been available to any of the entrepreneurs, whether it be forestry, whether it be aquaculture or whether it be tourism, which seem to be three of the more focused economic avenues on the North Island today. I'd just like the government to give some thought to that when they're discussing how to lessen red tape, confusion and regulations. I suppose every business needs a certain amount of security. Fee simple land does represent security.

I suppose you could also say that tourism is your next forest company, because tourism and forestry need the same thing. Several years ago I was part of an initiative to bring the Council of Tourism Associations of British Columbia and the major forest companies, COFI, together up here to sign a tourism-forestry agreement in the North Island, which basically said that tourism and forestry would work together to solve some of the major problems they had. One of those problems was a land-based problem.

I don't think it's ever been put to the test, but it would be interesting now during these times, especially after the great disturbance and the force of September 11, to get partnerships going. Partnerships are extremely important today, because that's how we're going to solve a lot of our problems. Private enterprise partnering with government really hasn't happened up to this point in time, at least not in the 21 years I've been talking about it. We need to partner with governments, because governments no longer have budgets or manpower to look after all those wonderful parks out there. They could rely upon the stewardship of those that work it on a daily basis to look after things for them. It seems like a no-brainer. Why hasn't it happened? Well, we could go on with that one for a long time, but it hasn't. Small things like that should occur.

I sat on the Central Coast for three and a half years. I don't know if Gerry is still here or not, but that was a lesson in total frustration. The last five months changed around completely. Stakeholders were left wondering: how come this happened? There are a few areas of focus that we could be looking at as the new provincial government, and I know that one of your mandates is to focus on business, make it a better climate, make the economy better. I think we need it at this point in time.

Aquaculture. One of the things you can never buy in this province is water. You could perhaps negotiate a settlement on your upland lease, but on a foreshore lease: "I'm sorry. We don't sell water." I would think the aquaculture people need some stability within their domains, and they would really like to look at fee simple on the water so they could establish sites and get down to the business of fish farming — or on the land, if anything's going to be land-based. It would be a real help to the industry to be able to have private property. I would suspect — maybe I'm just guessing here — that each one of these panel members in front of me owns a house or at least owns a mortgage on a house, has some private land that you can call your own. Small business in the province of British Columbia does not have that availability to this point and needs it.

The last page of this brief was something I sent out in a news release today to Tourism Vancouver and the Vancouver Sun. A similar news release went out yesterday from Pat Corbett at the Hills Guest Ranch. Pat Corbett was president of COTA for years, and he was just recently nominated to the board of the CTC, Canadian Tourism Commission, in Ottawa. One from Pat and his private business went out. One from me at Nimmo Bay went out, and one from Patrick Kelly. Pat's the general manager of the Hotel Vancouver and, I think, president of Tourism Vancouver.

The initiative was to try and stimulate travel and tourism because of the attack on September 11. It did

everything but bring it to a total halt. One of the things we discussed was that any private travel for Canadians, whether in B.C. or whatever, inside Canada for the next year, for flights or for accommodation would be a tax credit right off their income tax. Instead of giving Air Canada $4 billion to creatively destroy, that would be putting the money right into the hands of the people. It would be up to them to decide who benefits in the aftermath of September 11, because everybody's hurt. That would give a good start to putting heads in beds and people flying and moving again.

I personally believe that after giving up their Thanksgiving travel, which is coming up in November — I'm referring to U.S. citizens here, not Canadian citizens — and their Christmas and winter travel just because people are still living in fear, by the spring and summer they are going to be so ready to move and go somewhere. We'd better be ready for them ourselves. Also, I think we should stimulate some movement within our own country, and that tax initiative perhaps would go a long way to doing that.

Having said that, there is a huge movement in the States to do the same thing right now. There are two bills before the House talking about that very thing, so it would be a good consideration. Within the next two or three days, you'll see a lot more on that. If you talk to Rick Antonson at Tourism Vancouver, he's kind of spearheading that.

Gentlemen, there are dozens of problems that we have to face. I thank you for coming and listening to this piece of history, and I wish you luck and success in your early tours in the province. Thanks again. Do you have any questions?

B. Lekstrom (Chair): Thank you very much, Craig, for coming out and presenting to our committee this evening. I will look to members of the committee if there are any questions.

B. Penner: I just have to bite on your comment about the proposed subsidy for Air Canada. I'm aware that WestJet recently started flying into Campbell River, I believe, near Comox. Has that service been of any benefit to tourism here, in your opinion?

C. Murray: It's been of benefit to me. Unfortunately, I had to go to a memorial service in Canmore, Alberta, but I was able to fly right from Comox to Calgary — boom.

B. Penner: Of course, no one at the federal level is talking about assisting WestJet, I don't think.

H. Bloy: Your resort business that you started a number of years ago — do you own the land or lease it?

C. Murray: Presently it's under two leases, a Crown lease on the foreshore and a Crown lease on the outland.

H. Bloy: Do you think that would expand tourism if people were able to buy the land without the leases, to protect their investment?

C. Murray: Oh, I think so. Looking at it simply, up until the change of government, I could not repeat what I did 20 or more years ago. It's the same when I look at Hans Gmoser of Canadian Mountain Holidays. He could not do what he did 20 years ago. That's pretty bad for the state of our economy, because everything's so tied up in regulations and red tape. It's almost a sin to make a profit in Canada anymore.

A. Duhame: Good evening. My name is Art Duhame. I'm a union member, and I work in the logging industry in a small community just south of here called Woss.

Before I give my presentation, I'd like to thank the present government for my little tax break. I appreciate being able to take a little more of my paycheque home to my family. On the other issue of putting the finances in order for this province, I urge you to stay the course.

Tonight I'd like to speak on a subject that's dear to my heart and to rural communities in B.C., and that's the issue of helicopter logging and stumpage in the province. It's good to see that the government is addressing the present stumpage system. However, they must also address the problem of helicopter logging that takes local jobs from timber-dependent communities on the coast and does not contribute to the stumpage collected by the Crown.

At present stumpage is based on market price for lumber and wood chips and is adjusted every quarter to reflect market conditions. This is called comparative value pricing and averaged about $23 per cubic metre on the coast for the year 2000. The stumpage charged varies from area to area, depending on the grade, species and cost of harvesting. The comparative value pricing is also a value pricing target rate. The government expects to collect the comparative value pricing for every cubic metre harvested. This has become known as the waterbed effect, or averaging.

The Ministry of Forests considers helicopter logging to be $40 to $50 per cubic metre more expensive than conventional logging methods. This allows helicopter logging to have a stumpage rate approximately $40 to $50 lower than conventional logging. In most

cases, this $40 to $50 allowance exceeds the value of the stumpage. The public would get nothing or 25 cents per cubic metre for the trees if it was not for the waterbed effect. Because the comparative value pricing is also the target revenue expected by the government, those who log by conventional methods must pay the stumpage that helicopter logging does not. This increases the cost of conventional logging in the province by 10 to 15 percent.

To meet the criteria to be accepted for helicopter logging, an area must be inaccessible to conventional logging. However, with free stumpage, who can blame forest industry executives for acting with the same integrity as crows at a roadkill? Every labour regulation in the Forest Practices Code is being used as an excuse to helicopter log, as major forest companies play the stumpage game. I don't know if you noticed the helicopter that kept working as you came up on the north end of the Island. Anybody could have built a road in there with a Bobcat. What they've done there is throw a few trees up so they can do retention logging. They use a helicopter to avoid paying stumpage.

In the early nineties some of the more progressive companies, in response to environmental concerns, invested in long-line cable machines with a motorized carriage and drop lines. Seen as a viable alternative to many of the areas now being helicopter logged, these machines and crews are being made obsolete by the stumpage break given to helicopter companies.

The jobs lost to helicopters are felt most by small resource communities like Woss. Canadian Forest Products Ltd., once a leader in the use of long-line machines, now logs 10 percent with helicopters. As the learning curve progressed, companies found that the cheapest way to helicopter log was to replace the crews underneath by swinging a grapple. The government must recognize that long-line machines are labour-intensive, which makes them expensive to operate. They need to realize that if long-lines were given a portion of the stumpage break that helicopters receive, these machines and their local crews would more than hold their own against helicopters. Helicopter companies have a done a remarkable job in portraying themselves as the new reconstructionists of the forest industry. In reality, they are unwanted carpetbaggers who threaten the social and economic sustainability of rural communities.

Freedom-of-information requests — and this is very interesting — reveal that neither the Ministry of Forests nor the Finance ministry keeps any records on helicopter logging. They do not know the cubic metres harvested, the amount of waste left behind or how much stumpage is paid or not paid by helicopter logging. This lack of separate information on waste surveys leaves the government unable to respond to the broadly held view that the high cost of helicopter logging has resulted in high-grading, with low-grade logs being left in the forest to rot. In simple terms, the government has no records to validate why 10 percent of the coastal annual allowable cut is being given away for free.

What must be done to look at this problem? I'm not saying I know the answers — right? The use of long-line machines needs to be revisited. These machines provide local jobs. If they were included in the new stumpage system that the government is looking at, the government would give a much-needed source of revenue if they were getting some stumpage for those trees.

In the process of revising stumpage, the government must evaluate helicopter logging. Stumpage rates must be set on a stand-alone basis and not included in the value pricing target rate. Any new stumpage system must give the Ministry of Forests district managers specific powers to curb the abuse of regulations that has allowed these companies to misemploy helicopters to avoid stumpage. Methods to track and record helicopter logging on the coast must be put in place.

Helicopter logging has a place in the industry. However, it must become a stand-alone proposition, independent of target revenue. They should be given every opportunity to convince the government and the public that giving them our resource for free is good public policy. Thank you.

T. Bhullar (Deputy Chair): Just a point of clarification, Arthur: what are these long-line machines?

A. Duhame: You sling a cable across the mountain from one side to the other, and they have a remote-control motorized drop carriage. They'll drop the lines down and pick them up so the logs don't damage the terrain underneath them and bring them into the land, much like a helicopter does, except that it's a sky line across the valley.

L. Mayencourt: So if I've got a helicopter, I can come in here as long as it's not accessible by road. I can log. I can get a licence to do that. And I'm not paying anything for that?

A. Duhame: You get a reduction of $40 to $50 over and above what the provincial logging would give. It would depend on the grade of logging. That's what happened with Doman's, for instance — why they're paying huge stumpage and other companies are paying little companies. It's because they manage the stumpage game.

I just raise the issue for consideration because it's amazing that 10 percent of our coastal logging is not tracked by the government. Neither the Ministry of Forests nor the Ministry of Finance tracks that. I think that's absurd.

K. Krueger: Thank you for that really informative presentation. It has always confounded me how anybody could make money logging with helicopters. It seems like such an expensive technology to use. This has made it a lot clearer. You can rest assured that the

Forests minister will promptly have a copy of your presentation. We have made a very public commitment to end waterbedding. I'm not sure if you know that.

K. Krueger: That was part of our commitment during the election campaign, and we're keeping every promise. I just wanted to say thank you for a really informative presentation.

B. Lekstrom (Chair): Thank you very much for taking the time out of your schedule to come and present to us, Arthur.

R. Johnston: Good evening, and I also would like to take the opportunity to welcome you to the North Island. A bit about myself: I'm a resident of sunny Port Alice. I've lived there approximately 23 years. I've been a supervisor at the pulp mill for approximately the same amount of time.

You have a paper before you that I was going to speak on tonight, and I will later. I'd like to start off and just review a note that was given to me yesterday. It says: "Notice to all employees: in light of the continuing depressed state of the dissolving pulp markets we will be curtailing production in early November, sometime between the 6th and the 13th. The shutdown will extend into January of 2002. The exact dates for both the shutdown and startup will be determined when our pulp orders are finalized. This curtailment is necessary to reduce our losses in this economic recession."

Well, here we go again. This is the second time this year. We shut down in August of this year and started up again just this month — October 10. Approximately 400 people will be put out of work, and that doesn't include all the related spinoff jobs in the north end of the Island and farther south. Again, it's a bad time of year. What can we do? A few things come to mind: (1) cut the red tape; (2) streamline the process of dealing with government bureaucracies; (3) reduce the costs of doing business in this province. You've heard it before from other people here. The costs — WCB claims, waste permits…. I'm sure you've heard it before throughout the province. And (4) reduce the overall cost of government.

We found a general malaise, shall we say, within government departments. It takes an extraordinarily long time in the process to, for example, get permit amendments for air and water. Again, the time taken for the issuing of waste permits — it's got to stop. We need timely decisions from government and from government offices so that we can adapt, help lower our costs and enable us to compete on the world market. That's probably more of a statement than anything. It seems apropos here in the north end of the Island at this time, what with the pulp mill going down again. Probably $5 million to $6 million is left on the north end of the Island from salaries, etc., from the pulp mill and probably close to $30 million on Vancouver Island. That's on a full year that we operate. This year it looks like we'll be operating a total of eight months.

Anyway, I'd like to take the time now to go to my other subject that I had planned to speak on, and that's the ground and inland water search and rescue service in British Columbia. Among one of my other duties here, I've been the emergency programmer for the village of Port Alice for approximately 15 years. I've also been a SAR manager with the provincial emergency program for the last 11 years. There are now two of us on the north end of the Island. The next closest would be in Campbell River.

How is the ground and inland water search and rescue of B.C. organized? It's organized now under the Solicitor General. It just changed recently, I gather, from the Attorney General. We seem to be switching ministries from time to time. Who's responsible for what? Missing and lost people are the responsibility of the police force in whose jurisdiction the incident takes place. Who supports the unpaid professionals, which we all are? The provincial emergency program does. Who delivers on the ground and inland water search services? The volunteer SAR members do. How is the service delivered? The public contacts the local RCMP or local police to report a missing person. After initial investigation, police contact the appropriate search and rescue resources. Who are the resources? Again, I keep repeating: the SAR volunteers.

The police role is to activate the appropriate SAR response and act as the SAR commander. The PEP's role, the provincial emergency program, is to support the search and rescue volunteers. They provide us with WCB coverage and liability insurance. PEP also pays all operational expenses for the search and/or rescue. They enter into agreements with local governments on provision of equipment and facilities, and they provide training and funding to enable us to learn our skills.

The policy generation comes from the provincial emergency program and police, upon advice of a SAR advisory committee. There is a slight error here. The SAR advisory committee is made up of municipal police and RCMP, SAR volunteers and PEP. It has been formed — it says there that it will be formed, but it has been formed already — and provides the advice to PEP and police. The standards for search and rescue are set by the provincial emergency program, police and the SAR advisory committee.

How is SAR service trained? It is trained through the provincial emergency program through the Justice Institute of B.C., which provides training to all search and rescue groups meeting the criteria of an operational group. I won't go over it. You can read the number of courses that are available.

In the year 2000-01, 76 courses were attended by 940 students processed through the Justice Institute. For the year 2001-02, 78 courses are scheduled. There are two full-time instructors at the Justice Institute and 1½ support staff. There are 250 volunteer ground SAR instructors. There are 25 volunteer rope rescue instructors and 25 volunteer ground search team leader

instructors. There are 20 volunteer track aware trainers, and there are five management assistant instructors.

PEP provides the funding to the Justice Institute of B.C. for core training to all SAR groups. The average cost per student training day for 2000-01 was $73 a day. As I said before, PEP provides necessary funding for all operational tasks, liability insurance and WCB coverage. It provides necessary funding for reviews of all search and rescue operations. PEP does provide us with funds for equipment that is lost or damaged during an operation only, not during training. We conduct public safety programs.

There were funds — $200,000 allotted last year — to develop and deliver programs that would reduce or eliminate the number of deaths, injuries and overdue, missing, lost or stranded persons involved with outdoor activities. This is public information. The funding has been withdrawn, so there is no delivery of programs. This is a must-do item for the residents and visitors to the province. This initiative — letting the public know — has a direct relation to the reduced SAR incidents and also reduces related costs to the volunteers, to the government and to the taxpayers of B.C.

A few statistics for 2000-01. There were 757 search and rescue incidents in B.C. There were 1,011 persons searched for, there were 898 found alive, and there were 66 found deceased. At this time, there are 47 that have still not been located.

Search and rescue service provided by volunteers is a free service. The volunteers are not a payroll burden. To maintain the free service provided by the volunteers, the following must be established. A separate budget should be allocated to the search and rescue support for volunteers' operational needs. There's the figure in front of you which we had thought of. This is basically to cover consumables.

There should be a separate training budget for search and rescue volunteers. There are figures in front of you. It's my understanding that there's never really been a budget for search and rescue in B.C. It comes out of the emergency vote. I guess when we've exceeded the amount in the emergency vote, we go back and ask for more. These figures in front of you are not outrageous. There are 4,200 unpaid professional volunteers in B.C.

If the funding is not going to be provided, then who will provide the search and rescue service, and at what cost? There are suggestions — and there have been over the years — that the police could, that the fire service could, that the ambulance service could. Yes, they all could, but could we afford the service if it was provided, say, by unionized workers? The choice is one of cost-benefit — the SAR service provided by unpaid professionals who are not going to be a payroll burden or paid professionals who are going to be a long-term payroll burden.

Search and rescue volunteers throughout the province have created this briefing paper in order to bring all the relevant facts to the attention of the members of the Legislature. We believe that in this way, everyone has all the facts preparatory to making some difficult decisions. Thank you.

B. Lekstrom (Chair): Thank you very much, Ron. I can certainly tell you that you've enlightened me substantially on this issue, so I thank you for that. I look to members of the committee for questions.

L. Mayencourt: Just before the Legislature recessed, a good friend of ours, Rod Visser, brought to our attention that there had been a float plane that went down. Did you guys participate in that?

L. Mayencourt: I really value what you're doing, and I know that Rod does and all the members of the committee do. I promise you we'll make sure that Rich Coleman sees this and sees what it means and how valuable it is to you.

Do you provide service throughout the entire province for that? Is that for all the search and rescue teams throughout the province?

L. Mayencourt: If we had an earthquake in Vancouver, you guys would be down there, too, wouldn't you?

R. Johnston: That's right. We provide more than just those few services — i.e., searching for missing people in the bush. We're sort of a front-line group of people that can be there for earthquakes or anything else that might happen there.

B. Lekstrom (Chair): I do have a couple of other questions, Ron, if you've got a moment.

T. Bhullar (Deputy Chair): In reference to the pulp industry, you referred to red tape. You didn't specify the red tape that you feel needs cutting. As you might be aware, we have a Minister of State for Deregulation. We hear a lot about cutting red tape in the bureaucracy but no specifics. Would it be too much to ask you if you could forward something on red tape to the committee? We can see that it's forwarded to the minister.

R. Johnston: Yes, I certainly will. The reason I had to mention that, again, was just the untimely shutdown. I'm sure the company had tried to get a spot here, but it was filled. That's why I just took a moment to give that brief note. That's all.

T. Bhullar (Deputy Chair): Just specifically the regulations you mentioned. If you could send that to us, we'd really appreciate it.

K. Krueger: Thank you, Mr. Johnston, for your presentation. I want to echo what Lorne Mayencourt said. Rich Coleman will take a genuine and personal interest in your presentation. I heard some hint of misgiving in your voice about a transfer between ministries. As you know, the Solicitor General ministry is a new one. Rich is ex-RCMP himself, a very practical-minded man. You'll be glad that you have him as your minister. It's not that you were in bad hands before, but he is the right fit for what you're doing and is responsible for policing.

I want you to know that we really appreciate what you do and the fact that your people put their lives on the line all the time. I went to a meeting of my search and rescue people up in Clearwater with a doctor who is advising them because of the fact that a number of them had been exposed to hepatitis C through helping accident victims in a vehicle where there was a lot of blood involved, and rescuers sustained cuts extricating people and so on. In opposition it always confounded me that people like that, doing the things they did for free, had to fundraise for their own equipment and couldn't get help from ICBC for Jaws of Life and things like that. It's ridiculous. We'll be working on that.

We know that you help in all kinds of different ways with things that benefit Crown corporations and ministries like ICBC. You're reducing their financial exposure when you rescue people. Tourism, adventure tourism, the things that we advocate throughout the province — it's you folks that we call on when something goes wrong, and it's tremendously cost-effective. Also, our government's bringing on programs for youth employment. We want to create opportunities for youths, and I can't think of better organizations to get youth involved in and start filling their résumés. I don't have much of a question for you other than a reassurance that your issues are a very high priority for us.

I don't know if your group locally gets any funding support from ICBC — for example, the operation based in Campbell River — or any other arms of government outside what you've told us about.

R. Johnston: No, we really don't. We would have to thank all the companies on the north end of the Island like Weyerhaeuser, Western Pulp, Western Forest, Interfor and so on. They've been fantastic over the last number of years helping us out, and again, the people of the north Island have been very supportive too.

K. Krueger: All those big fat free enterprises that don't care about ordinary people, according to the socialists — right? Thank you very much.

We will move on to our next presenter this evening, with Port McNeill Enterprises Ltd., Cliff West. Good evening, Cliff.

C. West: I'd like to thank the committee for coming to the North Island to see us. I operate a small business, Port McNeill Enterprises. We've been in business for 27 years in Port McNeill. We're a union company. We supply ready-mixed concrete, sand and gravel to the North Island. Actually, we're the only concrete supplier in the North Island, but 100 percent of nothing is nothing, and that's about what we have for business these days.

We also have a roadbuilding excavator that works a Western Forest Products road, but Western Forest Products has shut down in this division, so it's not working either. Normally we employ 11 people. Five of them are laid off right now due to lack of work. It looks like there's a possibility of two more being laid off before Christmas. Things are not good in our resource-based community here.

There are some things that concern our business and, I'm sure, the community. I wanted to talk about the income tax reduction. I think the income tax reduction was a great idea, and in theory it should work. For my employees that are working full-time, it puts $120 more into their pocket every month. But if you're laid off for lack of work or you think you're going to be laid off, none of that money is going to be spent. They're all going to sit on that money.

It's the same thing with the mortgage rate being dropped today. People are not going to go out and build houses. They might renew their mortgages for a lower rate, but they're not going to build houses or do anything in the climate here right now, when they don't know from one month to the next if they're going to be working. The money is not going to come back like it's supposed to, to help create our economy, and we have to do something, particularly in our resource-based communities, to get people working again.

Our main industry here is forestry. Everybody knows it's dying. To get the industry going again we have to somehow achieve free trade with the Americans, which you're trying to do, and move to some kind of market-based stumpage system where, if the market is down the stumpage is down, so the companies can afford to log and employ people all year round rather than log for four months and be down for five months. We've somehow got to get back to steady employment. If you don't, this income tax reduction, particularly in a town like this, isn't going to do anything.

Millions of dollars are collected locally here. All the major forest companies are operating out of the Port McNeill area. Millions of dollars are collected in stumpage, but very little of that stumpage comes back to Port McNeill. It all goes into other things, but we see very little money coming back for our infrastructure in our town here.

The other thing I wanted to comment on is that I don't think raw logs should be exported. If they're going to export raw logs, there should be a tariff imposed on them. We're just exporting our jobs that we're doing.

Finfish aquaculture is another growth industry in the North Island here. Right now there are 350 or 400

people employed in the finfish aquaculture industry. The industry as a whole say they could employ 8,000 to 10,000 more people if they were allowed to expand and were given the sea sites they require to increase their production. This thing has been studied for ten years now, and we still haven't got…. I understand maybe something's happening, not that I've heard anything concrete. When are we going to get these sea sites allocated so these fish farms can expand, so they can employ more people? I don't know. Something has to be done.

Offshore gas and oil. Well, if the technology is available to do this in an environmentally safe way, then moratoriums should be lifted. If so, we can get on with it. I believe you're probably going to do that too. That's what we hear. If it's safe, we should do it. We need the money; the province needs the money. You know that.

The next on my list is Skeena Cellulose. The pulp mill should be scrapped, junked, torn down, because it's never made any money. How many millions has the government put into it, and it still couldn't survive? The pulp mill in Port Alice — Western Pulp — in the last ten years has spent $200 million upgrading to meet the environmental controls that it has to — $200 million. I believe Woodfibre is probably more than that. I'm concerned that they're going to sell off Skeena Cellulose at a fire-sale price to somebody who's going to start it up and compete. Western Pulp didn't get any government grants or any help at all. They did it out of the shareholders' money. I'm concerned that Skeena Cellulose is going to be started back up. Somebody's going to buy it for $1 or $500 and put it back on the market and cut the price of pulp further.

At Port Alice you just heard they're going to shut that mill down now for three or three and a half months. Maybe the sawmills are glad about that mill. There should be no more money put into that, and it should be scrapped. I realize it's tough on the people that depend on it for employment, but if the Port Alice mill goes down permanently, there's another 550. Port Alice will be wiped out; that's the main employer. They should be given an opportunity to not compete against a government-subsidized business.

The other thing I wanted to say was about ICBC. I don't know how many years ago the motor vehicle branch and the commercial transport branch were turned over to ICBC. They used to be stand-alone operations. As a person who has to operate a fleet of trucks, it's not right to have the people you depend upon for insurance controlling your driver's licences and the commercial inspections on your trucks. I mean, we want the commercial inspections to continue, but ICBC has become like Big Brother.

The reason ICBC has the motor vehicle branch now is because…. I believe at one time it was taking $45 million a year to run it, and the NDP offloaded it to ICBC and took the $45 million. Who knows where that went? As a fleet trucker, I think that the motor vehicle branch and the commercial transport should be put back on their own. That's all I have to say.

B. Lekstrom (Chair): Thank you, Cliff, for coming out and giving your presentation to our committee this evening.

B. Lekstrom (Chair): Your timing was great. I'll just see if there are any questions. Members of the committee?

K. Krueger: You've covered a lot of ground there. I was particularly interested in your last comments about ICBC. B.C. Liberals, in official opposition, opposed that move to roll those functions into ICBC. Now it's part of unscrambling Glen Clark's omelette to undo some of those things, but it could be done, particularly with our commitment to open the insurance to private companies, right down to the last dollar.

On the surface of things, you would think it would be more efficient if there was the right attitude — if there wasn't a Big Brother attitude — to actually be able to look to the same organization to deal with your licensing issues and your permit issues along with your insurance, especially if you had the option for insurance. It should be more efficient.

Do you see that as a possibility, given if you could — blue-sky thinking — believe that there will be a total change of attitude across government, including Crown corporations, to a can-do attitude — where people really want to help you do business and get unnecessary regulation out of your way while protecting public safety and the public interest so that you don't have inspectors crawling over your trucks looking for some excuse to fine you, even if you just got out of the inspection station, but where you actually have people who want to help you in business? Do you think it might have the potential to make a lot of sense, with a different attitude in government?

K. Krueger: You probably have a file of incidents that have given rise to the frustration that you've just outlined to us.

C. West: No. We had an incident a couple of years ago. We were working on the highway project between here and Port Hardy. All of a sudden, in their wisdom, ICBC decided that gravel trucks should have tarps over their loads. Now, if you've ever had anything to do with a gravel truck, the gravel's not going to blow off the gravel truck. If the gravel is sitting on the side of the sideboard or on the tailgate or something like that, and it falls off and hits somebody's window…. I mean, that's an unsafe load. But if the gravel truck is loaded the way gravel trucks should be loaded, the gravel is not going to blow off.

We were working on the highway project, and the DOT inspector came up. There were ten trucks hauling for the Ministry of Highways. He stopped every one, and he gave us all notices that we were going to have

to have tarps within seven days. That was the new deal. The Ministry of Highways — I think they realized that was going to cost — were going to go from something like 20 loads a day per truck down to 12 or 13 because of the extra time. You've got the gravel truck loaded in the gravel pit; you had to put these tarps over. Anyway, I got my back up about that. I actually enlisted the help of the former MLA, Glenn Robertson. This regulation for tarping gravel trucks came from ICBC; it came from somebody in Victoria, one of the vice-presidents. There's no rhyme or reason why. The only place you might have to tarp a gravel truck is going along the Abbotsford freeway with fine sand. You might lose a little sand, but you're not going to blow rocks off the back of it that way. The cost of putting these tarps onto these trucks was 3,000 bucks for a truck and pup.

Anyway, we sort of took them to task on it, and we looked at the regulation. The regulation says that if you're not likely to lose any of your load, it doesn't have to be covered. We're not likely to lose any. I got a legal opinion from the lawyer.

Actually, he came and picked up the ticket from me and told me that he was sorry, and he shouldn't have given it to me. I expected that I would be getting stopped for inspections every day, second day after that, but we didn't. But it wasn't right. That's ICBC, somebody in their wisdom….That's what we're going to do. At the same time, I asked the guy from commercial transport in Nanaimo: "If you're going to make the gravel trucks tarp their loads, are you making the logging trucks wrap up the logs so that the bark doesn't fall off? Well, he says: "That's different." Well, how's that different?

That was just an example where a regulation like that was, you know…. If I hadn't said something about it and got something going, it would have been an increased cost to any highway project.

The thing is that the highways guy…. The commercial transport branch is in the same office in Nanaimo as Highways. He says that we have this new thing in government. We're supposed to communicate — you know, the ministries together — but they just don't talk. ICBC is on its own. They've got a different attitude, and they don't communicate. That's what I was told. Anyway, that's my story about ICBC.

K. Krueger: That's going to change, and we want to encourage you. You've got an excellent MLA in Rod Visser. Any incidents like that, which happen — bring them to his attention. Private members are first priority of cabinet ministers. If you have a problem like that, he can get it on a cabinet minister's desk on the same day.

C. West: Well, we have a thing right now where we're on what they call a preventive maintenance program. We have a licensed mechanic; he does our own inspections. He went to school; he's got the TQ and all this. In their wisdom, they're coming out that he has to take a course so he can apply the decals properly on the windshields of these trucks. It's like a two-day or day-and-a-half course. I questioned them on it, and they said that's to do with the national safety regulations across the country, and everybody is going to have to comply. So now, here I have a qualified mechanic who's been maintaining our fleet for years, and he has to go and take this course. They come around, the records are being checked, and we're keeping proper records. But he has to take this course so he's allowed to apply the decals on the window. This is good.

B. Lekstrom (Chair): Thank you, Cliff. The frustration certainly is shared by many, and we are going to correct that, hopefully.

K. Hesselden: Good evening, Mr. Chairman, hon. committee members. I would like to add my welcome to the North Island, and I think you would agree that it's a lovely part of the country, is it not?

K. Hesselden: You may notice, as I'm holding these papers tonight, that my hands are shaking. It's not because I'm nervous; it's because I'm damned angry. You probably can't wait to find out why. We've heard a lot of talk tonight from other people about salmon aquaculture, about offshore oil and gas, about the importance of the logging and forest industries — pulp and paper — to the economy of this part of the world. With no disrespect to my friends in the tourism industry, I would suggest to you that resource-based communities such as this one and others scattered around B.C. are the engine that drives the economy of this province. They have for years. Properly managed, they will for many years to come into the future.

Gentlemen, we're under attack. We're under attack on a daily basis by people who want to stop any kind of resource development whatsoever. I've been involved in the offshore oil and gas push, if you will, for the last six years. I can tell you that you cannot do anything on this coast without running into some environmental group or another. The one that has made the most noise in this particular area is a small group based in Sointula, which is a short ferry ride away from here, called the Living Oceans Society.

I decided to do a little research and find out who these people are. They're a small group in a very, very small community. In Sointula there are maybe 500 people. I wanted to find out who they were. I thought perhaps they were maybe just some aging hippies driven with a high moral agenda of their own. I thought that if I could understand them, then perhaps I could discuss things with them in a logical fashion.

Through my research I got to find out who the board of directors were of this small Sointula-based environmental group. I won't mention the names, but I can tell you that the executive director of the Sierra Legal Defence Fund is a director of this group. A senior director of Greenpeace Canada is a member of the board of directors of the Living Oceans Society. A member of the Sierra Club of B.C. serves on the board. The funding liaison manager for the David Suzuki Foundation serves on the board of the Living Oceans Society.

The Living Oceans Society per se may not mean very much to you, but I think you can recognize the Sierra Legal Defence Fund and Greenpeace Canada. These are the people that rewrote the geography of British Columbia and created the Great Bear rain forest. They're also the people that managed to shut down logging operations on most of the central coast in this province. That's who these people are.

Okay, fair enough. We live in a democratic society. I had a look at their financing, because I was sure that these were starving idealists. No, sir. In the two-year period ending December 31, 2000, these people raised $527,000; 85 percent of it, or $450,000, came from the U.S., specifically U.S. tax-sheltered foundations. It's unfortunate that Ms. MacPhail is not here tonight, because she might be interested to know that $16,000 came from the NDP provincial government, which absolutely shocks me.

These people are paying themselves well: $206,000 in wages and benefits. While the rest of us are trying to work at jobs and earn a living to keep the economy of the province going, these people are flitting around to Ottawa, Vancouver, Victoria and any number of other places. They spent $60,000 in that two-year period travelling around spreading their — I want to call it lies; I'll be gracious — message.

These are people that heap indignity after indignity on the men and women that work in resource industries in this province. I told you I was angry, and now I've told you why. I'm fed up over it. I really am. Words fail me when it comes to talking about these people and what they are doing to communities such as this one — the one I live in, Port Hardy — and what they're doing to Port Alice and any number of them around the province. Mining communities — gone. The whole mining industry in this province is virtually gone because of the kinds of pressures that these people have brought to bear. I think it's time to put a stop to it. I respectfully submit to you that you have the mandate now, an overwhelming mandate, and I think it's time we had a policy, an agenda, that's made in B.C. by British Columbians and for British Columbians. Thank you.

B. Lekstrom (Chair): Thank you, Keith, for your presentation this evening. I think your frustration and anger are shared by many across our province.

B. Penner: I'd also like to thank Keith for his presentation and for peeling back just a little bit of the onion that represents the funding and financing of these so-called environmental groups. I think they may do some good work, but I know that some of their motives, at least to me, sometimes are less than straightforward.

My first face-to-face encounter with this was a couple of years ago when I went up to the mid-coast. I think it was King Island where the Forest Action Network and Greenpeace were trying to prevent Interfor and its contractors from logging an area they had a legal right to log. You would have thought that these protesters would like an elected representative to get a look at what they said were bad forest practices. However, they attempted to prevent me from getting off the boat I was on and onto the landing of this island. The leader of this group, by the way, was from California. She was trying to tell me , a person born in British Columbia and an elected representative, that I had no right to set foot onto this Crown land and to go for a hike up the mountain to take a look at what they were complaining about.

I can tell you that the biggest mess I saw was where they were encamped. There was human waste. There were all kinds of hygiene products dumped into a creek that was running into the water. As I hiked up the logging road — they tried to stop me, but they couldn't keep up to me — I couldn't find any jerry cans, any chainsaw material, any oil cans, anything left along the side of the road, and I went right up to the top where the logging activity had been. That was kind of my awakening to what I think, at times, is almost a covert activity by some of our competitors to put B.C. out of business.

B. Lekstrom (Chair): Keith, again I would like to thank you for your presentation to our committee this evening.

K. Morton: Good evening. Before I start, I must apologize. I'm not particularly politically correct, so if you don't like the terms I use, insert your own — whatever makes you feel warm and fuzzy.

K. Morton: Hon. members of the Legislature, I'd like to thank you for taking the time to ask the taxpayers what they would like to see, instead of the normal politicians telling us what they're going to do to us with our own money. My name is Kim Morton. I reside in Sayward, and I am here tonight representing overtaxed, overregulated citizens of this province. I asked my co-workers for their input on this, but most of what they had to say about governments I can't repeat here. Most of what I have to say can be directed to all levels of government.

I'm here tonight to tell you that the working people of this province have been bled dry. We have no more

money to give. The taxpayers of this province are tired of seeing so much of their paycheques squandered by various levels of government. We have too many levels of government but only one level of taxpayer. Our standard of living has declined as our economy has over the last ten years. I went from owning a company with eight full-time employees and several part-time employees in 1990 to operating equipment for other people today.

With our forest industry currently in the toilet and mining almost nonexistent, governments need to cut back and spend wisely. The core review process is an excellent starting point. All important departments and programs must be thoroughly examined to see if they are doing what they are mandated to do and if they are producing the desired results. If the answer is no to either one, I would suggest it be eliminated.

Cutting red tape as much as possible will go a long way toward eliminating many civil service jobs and making life easier for almost all businesses and most taxpayers as well. There are many areas where various levels of government overlap or duplicate services. For instance, we have at least four levels of parks in this province. There are federal parks, provincial parks, municipal and regional district parks, and the Forest Service provides numerous campsites. All these come complete with their own bureaucracies. I would expect that with a little cooperation and effort, a lot of administrative costs can be eliminated. This is but one example.

Most provincial ministries also have overlapping and sometimes competing jurisdictions, creating an excess of staff and a lot of extra work for businesses and even homeowners. I've often wondered how pulp prices can be so low with the amount of paperwork churned out by and for government. Providing 13 copies of a submission is a pretty good example of that. I realize everybody needs one, but it's still a lot of paper.

In the past, when governments have pretended to have cutbacks, it has always been front-line workers who have been cut while administration has largely remained intact. I suspect this is because the task of cutting has been left to the very people that should have been cut. Remember that the first order of business for a bureaucrat is to establish three levels under him to justify his own job.

I would suggest that all civil servants not considered essential services are redundant and can be cut. I know that the Ministry of Forests has hundreds of people who have spent years in school and many thousands of tax dollars to learn how to grow and look after trees but do no hands-on forestry. They spend their days filling out forms and passing pieces of paper back and forth instead. It is so bad that the Ministry of Forests has to hire contractors to supervise the contractors who are doing the actual work, because the ministry engineers are too busy doing paperwork. I'm sure the same can be found in both ministries.

The wages and benefits. At one time civil service jobs didn't pay all that well but were secure, and not too much was expected of them by their employers or the taxpayers. Now the scales have tipped the other way, and the pay scales for government employees have by and large surpassed what most private sectors employers can afford to pay.

What hasn't changed is how much they accomplish and what is expected of them. We now have the bizarre situation where a receptionist in government makes as much as some tradesmen and more than $5 an hour more than their counterpart in the private sector, and they both belong to government unions.

We must protect and provide for people who are mentally or physically unable to care for themselves. This doesn't mean shovelling money off the back of a truck. Anyone who needs financial help and is capable of working must be made to do some kind of work or be in school to collect welfare. Those who don't show up for work or school will be docked pay.

Any protesters blocking work sites who are collecting welfare should have their money cut off forever, as they're obviously not looking for work, and those of us who work and pay taxes don't like financing protesters who are preventing us from earning a living.

To have a healthy economy, we have to have a well-educated workforce. We need medical people and people well trained in science and technology and good teachers. I would go so far as to recommend free education in these areas. In return, they must spend a minimum of five years working in this province to pay for it.

Anybody wanting a degree in medieval literature or Egyptology could pay their own way 100 percent. Our education system must be relevant and provincewide exams administered to evaluate both students and teachers. The education system must be geared to the needs of the students and the industry, not the wants of the teachers.

Health care. I'm sure we spend more than enough money on health care. The real question is: are we spending it wisely? There are a lot of overpaid administrators and a lot of union rules that add significantly to health costs. Having registered nurses answering phones and emptying bedpans is a simple waste of talent and money. Then there are doctors who abuse the system simply to pad their own incomes. There are, of course, people who abuse the system simply because it's free, and this all adds up to serious coin. Having a healthy population would also go a long way toward stretching our health care dollars.

It is the job of government to provide a climate where business can prosper. It has no right to compete with the private sector. Government also has no right to squander public money or to prop up uneconomic businesses. The duty of government is to provide clear and useful rules to protect workers and the environment without placing undue burden on industry. Severe financial penalties must be imposed on those who deliberately flout the rules.

Governments must spend our money wisely. The funds are limited, but the demands are vast. We may want a new Cadillac, but all we can afford right now is a used Chevy that runs well. We must eliminate unnecessary agencies. The Motor Carrier Commission

could be the first to go, as it's simply a government-run protection racket that inhibits competition.

We need to encourage small businesses, as they are the backbone of our communities and have a vested interest in keeping the communities healthy and wealthy. Offshore oil and gas, and indeed all petroleum and mineral exploration, must be encouraged, as these resources provide well-paying jobs in all areas of the province and help protect our industries from unstable offshore suppliers in world markets.

The money you spend comes from my paycheque. I'm the one with the mud in the boots and the rain in the lunchbox to earn it, and I want to decide how it is spent — not some bureaucrat in Victoria or Ottawa. At some point the taxpayers of this country will wake up to the fact that they are the ones in control and you are the employees. When this time comes, there will be swift and dramatic change as to how we are governed. Thank you.

B. Lekstrom (Chair): Thank you, Kim. I think you've probably just spoken for the majority of Canadians in your presentation this evening, from what I've heard.

B. Lekstrom (Chair): I will look to members of our committee to see if there are any questions.

B. Lekstrom (Chair): I see none, Kim. I would like to thank you for taking time out of your day to come and present to our committee.

That concludes the registered presenters this evening. We will now move into what we call the open-mike session to allow people that didn't have the opportunity to register or who have sat through the hearings this evening and have something to add. I will at this time call on Fred Poirier. Good evening, Fred.

F. Poirier: I was not prepared. I just found out this afternoon that you guys were going to be here, and you want to hear from the public what the public thinks. I was not ready for this. I never wrote a book like the rest of them, but I'm going to try to have something. By the time you guys get home, I hope I have something down there for you guys. I've got the address and everything.

My problem is this: we've got some contractors distributing money from the federal, local and provincial governments. They've been going on for years. They've never been audited on who the money hurts, who the money goes to, which way…. You know, if you give a whole bunch of money to somebody who doesn't know what to do with it, you do more harm than good. It's not just the amount of money that comes into town that creates good for people; it's how it's used.

We had lots of money come this way, and these contractors have never been audited in ten years — just a little report goes in, and whatever they say goes. If you give some money this way, I hope you guys make sure you keep a percentage to pay an auditor and have those things audited — where the money goes and how much good it does.

I've got a small sawmill here. They took all the fishermen out of the ocean, gave them a bunch of money and made them sawmill men. Now they're all broke. We lost $1.7 million in two years, and nobody knows where the money went. It's all bad debt. I don't mind if you don't help me, but at least don't hurt me. I never asked for any favours from anybody, but don't destroy my living. I've been doing this for 25 years, and I made a decent living. Then all this money came to town, and I've had nothing to eat for the last four years. Am I supposed to laugh? It's not funny, how much damage you can do when you give a bunch of money to somebody that doesn't know what they're doing. That's very, very insulting.

The federal government participated in that. The provincial government gave a whole bunch of a money to the same contractor. We ended up with a big mess, and nobody knows where the money went. I feel good, because I read in the same paper where I found out that you guys were going to be here that you finally closed down Fisheries Renewal. That's a good start. Call it something else, but don't call it that. The money comes here, but nobody knows where the money goes. All kinds of other private people put money in there — B.C. Hydro; I can name a whole bunch of them — and there's no accountability for anything. They go around and lie to the public that they've been audited by the auditor general of Canada, when the auditor general didn't even know who that contractor was. They'd never heard of him.

I phoned Victoria, and it was the same thing: "We can't do anything; that's federal." Why did the provincial government give them the money to spend, if nobody can audit them or look into it? Can you guys make sure that you look into that? I'll send you more paper. By the time you get home, you'll have a package there. I had no time today.

B. Lekstrom (Chair): All right, we would appreciate that. I would encourage you to send it.

F. Poirier: At the same time I want to tell you what that guy from the Suzuki Foundation said. He's a board member for one of these contractors. And that's to tell you how slimy the situation is. You get there against the whole set-up, but you participate in it too. It's not funny at all. Maybe you'll smile when you look into it, because I'm telling you the truth.

B. Lekstrom (Chair): I'm smiling because it's incredible what we go through, but I think what you brought up was a very important point.

F. Poirier: Thank you very much. If anybody wants to know any more about it, then I've got lots more. I've got five like that. I never made any money before. I could not pay my property tax this year — 5,000 bucks. I'll be looking to you guys for a grant.

N. Evers: Good evening. I hope I don't take too long. I'll try to be brief. I really am pleased to see the Liberals coming through with some of the commitments that they've made. I ran against Rod, actually, as a member of the B.C. Marijuana Party. I have a few things. It's not just on marijuana.

I read the newspaper today, and I actually just found out about this meeting today. So if I need to submit a brief, I can do that later. I just found out when my friend called me and said: "Oh, they're coming in."

One of the things in the paper was about how the Liberal government may remove the controls on forestry companies that force them to log regardless of market conditions and threaten to strip them of their logging licences if they don't meet their quota. Now, I believe this has already been done in TFL 6, which is Holbrook and Doman's. That's where my husband works. I'd just like you to know that Doman's has made profit before. I'm not sure what their expected profits are. I know a lot of companies don't always make the expected profits, but they do make a profit. So if a company is making a profit after paying all their expenses, they should have to work.

The other thing. I've got my friend there with me, and her father-in-law says: "Only square logs leave the province." That's actually pretty important; that speaks for itself.

Just because of the layoff, I'd like to mention the welfare now, because we might be looking at that situation ourselves in about February or March if we don't get back to work. A single person on welfare receives about $500 per month. If they do find a job, their welfare cheque is reduced dollar for dollar. Now, it doesn't make a whole lot of sense to have somebody just say: "Go and get a job if you're on welfare." If they go, they have to spend money on transportation and clothing, and they have to spend lunch money in order to work. So it doesn't make a whole lot of sense to be getting $500 a month and spending $75-plus every month to go out and work, and that $75 goes back. So now you have a net income per month of $425.

I think what should be changed as far as welfare goes is that whatever the rate that single persons receive, they should be permitted to keep a portion of that money per month. As an example, if it's just $125 over and above their welfare cheque, that's some sort of incentive to go and try to find a job. Right now there are a lot of people on welfare. A lot of people don't want to be on welfare, but they can't get out of that rut. So that's something there.

Another thing too. I'd like to see some MLA live on welfare for three months so you really know what kind of hoops people have to go through. Just as an experiment, get somebody to do a brief, so you know what these people go through. Not everybody wants to be on welfare, but I also agree that it can be a syndrome.

When I went around the province, I spoke to people that were fish guides. They had a lot of complaints, so I'm going to speak for them. Tourists come up to B.C. and fish with a guide for the first year. They learn what kind of bait to use and where the fish are. In subsequent years they come back. They don't use the guide, but they know where the good fishing areas are, they know what bait to use, and they overfish. Maybe there could be some regulation about tourists having to fish with a licensed guide for a minimum of so many years. This would keep our guiders in business.

With hunting — and we'll talk specifically bears…. My husband hasn't hunted for a long time. Right now there's this big deal about bears being poached for their body parts. Maybe with the hunting regulations, bear body parts that are in demand should be turned in to the fish and wildlife branch. They, in turn, can sell them to whichever market poachers sell them to. Hopefully, this will cut down on poaching and also bring in some revenue.

Offshore oil. I don't agree personally with offshore oil, and I'm not one of these people who have received grant money. My husband and the scouts of Holberg and San Josef were out at Raft Cove picking up after the Valdez spill. If anyone's ever been involved in anything like that…. Before I see offshore oil — and I'm all for jobs — I would want a guarantee that no oil spilled. I haven't heard of that; I don't think that's possible. We live in an earthquake zone. I'm all for jobs, but not offshore. I think that's going to damage our coastline.

The other thing that Mr. Hesselden spoke of was that $12,000 came from the provincial government for the sea society, I believe it was. How about the provincial government stop funding special interest groups? There are tons and tons of groups that get our money — my family's hard-earned taxpayer dollars — and I don't agree with what they do. I don't see why they should be getting money. Money should be going for health, education, roads, hospitals and ferries — good old ferries. That's really what should be done with our money. I don't want to be funding special interest groups. Special interest groups can make their own money.

We recently, just a few weeks ago, had people over from Holland to Holberg as guests. It was their first time on the Island. They didn't see too much of Canada. They were going to go to the States, but it was just after September 11 so the borders were pretty tight. They didn't really want to go down there, so they came to the Island, and now they want to move here. These

people also pay money to Greenpeace. They were expecting that everything would be cut down. They took lots of movies and lots of pictures, and they're going back with that. That's really good. Maybe what B.C. should be doing is to have people go over to Europe and actually do more promotions for our logging industries.

I talk to people. My neighbour is a forest worker. He maps out things. When you start wanting to fiddle with the Forest Practices Code, he says: "That's the best in the business." Our companies right now are trying to get their CSA approval. I don't want to be taking these things away. I can understand deleting some of the red tape. Let's maybe not have all the formulas, or maybe they could be made simpler. Don't undo what we've spent the last ten years having to build. I think that's pretty important. People from Europe really like what we have to offer here. It's totally amazing and totally different than what they have.

Someone was saying that all the people voted you guys in, but it was only about 56 percent of the people. I would like to see the Liberal government continue its commitment to look into proportional representation.

N. Evers: Okay. I'll finish. There are just two other things. These are on the marijuana issue. A section 56 exemption, which is a federal exemption for Health Canada that has a category 2 or 3 person…. These people have to get specialists. From what I understand, it's the provincial government money that pays for this specialist. You had mentioned somebody earlier with hepatitis C and stuff like that with GSAR training. Hep C would fall under category 3, and most people with hep C that wanted to use marijuana medicinally would have to go and see two specialists. That's a huge waste of our taxpayers' dollars, and somebody should be seeing the federal government and negotiating that requirement.

The other thing, too, is that I have a farm at Black Creek, and it's a total waste of our police-dollar resources and tax dollars to be assisting the U.S. Drug Enforcement Administration to bust the outdoor marijuana growers in B.C. Those guys have helicopters, and they're flying all around the place. The Vancouver Sun reported that B.C. bud brings in $8 billion a year in revenue to B.C. When we help the DEA, we kind of cut our own throats, so I'd suggest that the new government find some way to tax marijuana. Thank you.

B. Lekstrom (Chair): Thank you, Noreen, for your presentation to our committee this evening.

R. Gerstmar: Good evening. Before I start my presentation — I have a written one, and I believe she's distributed it — I'd like to make a comment to Kim Morton. I'm a member of the Ministry of Forests. I started work at 7 o'clock today; I finished at 6:30 p.m. We were over on the west coast, and we worked very hard out in the bush. I'll be leaving tomorrow at 7:30 in the morning and won't get back till 5:30 p.m. Again, it will be a lot of fieldwork. When comments are made that a majority of Canadians believe the Forest Service is not doing its job and is pushing paper, I'd like to contradict that statement — okay?

I'll start with my submission. Hello, and thank you for taking the time to come to Port McNeill and hear my presentation. My name is Richard Gerstmar. I'm a 39-year-old lifetime British Columbian, born in the Okanagan. My wife and I own a house in Port McNeill, and I have lived and worked here for over six years. I have worked in the forest industry since 1983, and I started with the Ministry of Forests in 1985. I am currently employed as a science technical officer in the Port McNeill forest district here.

Prior to coming here, for ten years I was the vice-president of KVPC Ltd., which is a private forest consulting firm that operated out of the southern interior and now resides in Salmon Arm. I own a charter business that operates out of Port McNeill. My wife recently opened a retail pet supply store in town. I am a level 3 occupational first aid attendant in our office and a level 2 softball umpire in this community. I am a current chair of the district partnership committee and a past chair of the occupational health and safety committee. I also volunteer locally for the Canadian Cancer Society and the regional search and rescue coordination group. I also know most of the people that are here tonight.

I would like to speak to the committee about the impending cuts in the public service and their true financial impacts, specifically to the methods that the government may…. I would like to interject a few words here, because we have received some more information just this afternoon on the core review process. There have been talks about cuts to FRBC, restructuring, moving towards profession accountability, a results-based code and deregulation. That's to interject into my statement.

There have recently been many government forest policy discussions about alternative methods of ensuring proper compliance and enforcement of forest practices. Some of these discussion papers — and I'll interject with what was said today — centre around how the current compliance and enforcement model may be replaced by a new model, specifically a model that incorporates deregulation, a results-based forest practices code and professional accountability versus the current methods of administrative regulations, a process-based FPC and C and E ground inspections.

My comments are these. As a Ministry of Forests technician in silviculture, I have strong concerns about the foreseen paradigm shift in compliance and enforcement activities, which is now not just foreseen but rather has been spoken by the Minister of Forests today. Based on the Ministry of Forests core review posted literature — again, like I said, the ones that are posted today, the latest notes from Don Wright, the PRAT initiative — a shift to C and E by means of

professional accountability and a results-based code rather than ground-truthing will be the theme.

Many Ministry of Forests foresters will tell you that they don't have the time to go into the field and check their own prescriptions that they write, let alone the numerous licensee prescriptions, treatments and surveys that come into our office daily. These same foresters see the ground work that's a technician's function as essential for proper compliance and, when warranted, enforcement of stand level activities where public funds are expended.

Under professional accountability and a results-based code model, I do not believe the province can reasonably ensure that public funds will be properly withheld for ineligible stand- level treatments. Ministry technical staff perform office and ground-level inspections to ensure that submitted treatment areas are eligible for public funding. In my experience, many licensee treatment approval submissions have ineligible areas listed even though it is the licensee's responsibility to ensure that these submitted areas are eligible for funding before submission. Under professional accountability and a results-based code, how will the province ensure that these public funds are not expended on areas that are not eligible for funding, without even scrutinizing these submissions?

I do not believe that the province can ensure proper expenditure and collection of public funds on stand-level activities by means of professional accountability and a results-based code. The current administrative regulations, which are enforced at the time of treatment and beyond, are at the very least done to prevent any further degradation of public land and waste of public funds. If a results-based code is implemented, these contraventions, if found at all, would not be detected until well after the window for fixing any stand degradation and recovering any wrongly expended funds.

How will the province ensure that no forest degradation occurs when no or very few field checks will be completed to confirm what a forester reports as acceptable? Professional accountability sounds great on paper to another forester. Field checking almost always brings out issues that a prescribing forester didn't want emphasized. Technical staff perform ground inspections to ensure that contract standards and prescription objectives are met or exceeded or stand-level treatments are performed. If the treatment is sub-par, then an apportioned adjustment is made to the recommended payment remittance. Many times, in my experience, when a sub-par treatment has occurred in our district, the prescribing forester has submitted a report that states that he or she believes that no stand damage has occurred and that his company deserves 100 percent payment, even though the standards in the contract and the prescription were not met. Under professional accountability, many of these reports would be accepted at face value and the prescription changed post-treatment to justify resulting degraded stand conditions.

If a forester debates under the Association of British Columbia Professional Foresters code of ethics the C and E issues in an office rather than spending the time to gather ground information, I do not believe the public can have a level of confidence that compliance, and therefore proper expenditure of public funds, has been achieved. We all want to believe that what a person — namely, a forester — says is correct. But if we don't check these statements, then how is the government to be accountable? Under professional accountability, the ABCPF has never reprimanded, other than a written warning, any forester for any contravention under the professional accountability guidelines.

Under professional accountability and a results-based code, if there is a dispute over a treatment's success or failure between a licensee and the province and the province has no hard evidence — in other words, ground check data — that stand degradation has occurred, I don't believe the courts will be able to enforce the province's mandate of forest stewardship. Discussions between foresters will not hold up in court, and therefore a Crown counsel will not have the needed evidence to enforce the Ministry of Forests forest stewardship mandate in this dispute.

I believe that there will be stand degradation in public forests if there is deregulation of the Forest Practices Code and other environmental regulations. How will the province ensure that public forests are not degraded and animals protected if there are very few regulations to prevent habitat destruction? The attributes of the public forests will be disregarded in favour of a larger industry profit margin. These forest attributes are this community's lifeline for ecotourism, recreation, botanical forest products and a healthy standard of living. Industry foresters have a mandate from their employers to make money. If treatments aren't regulated, then maintaining habitat will lose out to increasing company profit. This will degrade the forest ecosystem, and therefore the public will have lost the value of the public forest. This forest value is what makes B.C. one of the wealthiest places on the planet and a great place to live.

I think from the points I've raised, you can see that if we move towards deregulation, a results-based code and professional accountability, we will lose the value for dollar in our forests. Operational ground inspections are essential for proper compliance and enforcement of stand-level treatments. Cutting the public service in this area will result in a degraded forest, inappropriate expenditure of public funds and lost revenue. If 50 percent cuts to the public service go ahead, it will result in over 600 government employees losing their jobs in Port McNeill and Nanaimo alone. These are people that contribute to the community.

In conclusion, I would like to thank you, Minister Lekstrom and the rest of the committee, for listening to my concerns. I will continue to be a contributing member of this community and will continue to enforce the government's mandate as it was presented to me. I would hope that Hon. Minister Collins and the Legislature will take my concerns into account when they are preparing and voting on future finance and government services legislation. We all have to work together

B. Lekstrom (Chair): Thank you very much, Richard, for your presentation. You squeezed that in, in just over five minutes, so that was terrific. Although I'd like to thank you, you referred to me as Minister Lekstrom. I'm just an MLA. "Minister" is reserved for members of cabinet.

K. Krueger: That's why he let you go over five minutes. I saw you were getting to that.

B. Lekstrom (Chair): That's why I let you. I knew they'd pick up on that. Richard, I thank you for your presentation.

B. Lekstrom (Chair): You know, we're into the open-mike session right now, and it's very difficult. We have a huge amount of speakers, so if there are, possibly after we adjourn.

Our next presenter this evening is Eric Dutcyvich. Eric was originally scheduled earlier but was delayed and unable. Eric, I will allow some flexibility on the five minutes here. I know you were scheduled, and welcome.

My name is Eric Dutcyvich, and I'm the general manager of LeMare Lake Logging. I'm also a director of the company. Our company employs approximately 200 people on northern Vancouver Island. Our company performs logging and roadbuilding services for most of the major licensees as well as for the MOF through the small business forest enterprise program. In addition, we have our own tenure in the form of a forest licence in East Creek on the west coast of Vancouver Island. I am a dean's team honours graduate of the Richard Ivey School of Business in London, where I majored in finance in the political environment of business. I obtained my degree in 1989 and spent the next two years in Vancouver working in forest products marketing for Weldwood of Canada. I joined my family business in 1991 and have been working in this capacity for the past 12 years.

The 1990s represented the longest period of sustained economic growth that we've seen in North America, yet B.C., which should have been ideally positioned to take advantage of this boom, actually suffered two years of recession. We are a resource-rich province with a dynamic business sector, but opportunity has run hard against a growing wall of bureaucracy, overregulation, taxation, mismanagement and a sellout to foreign environmental political pressure bordering on malfeasance and, I might add, a sellout to political pressure through what I would call trade terrorism.

As a witness to the Select Standing Committee on Finance, I feel I have an understanding of the forest industry that is fairly broad and intimate, so I will limit my comments to this important segment of our economy. I have three messages that I would like to convey to the committee. First, it is time for British Columbia to get on with the business of doing business. We need to get people back to work, and the way to do that is to get rid of the political unknowns. This is something that only the government can do. Here is what I believe should be done. A lot of the comments I'm making I'm not backing up with a whole pile of cause and effect or specific technical detail. I've actually written a brief that I plan on submitting, but the summary of that brief would essentially be what I'm going to deliver tonight.

Where can we harvest timber, and what will we do to protect for conservation? That's a decision that has to be decided right now. It costs a great deal to go through this debate every time we have to go to work. Native land claims have to be dealt with before we can expect to attract investment to revitalize and modernize our capital needs. The industry has been too badly crippled to raise the money from within. I understand — I'm not naïve — that native land claims aren't going to happen overnight. It's going to be a long-drawn-out process, but I think the process and the way it's proceeding right now is self-fulfilling in its longevity. A lot of people are making a lot of money off this process. It's not the people who deserve to be making the money — whether that be the people of British Columbia or first nations people. I'm not up here to make a statement about what's fair or what's right. What I am talking about is process. The process has fallen down, and if I was a foreign investor or even an investor from within this province, I would say that there is a great deal of instability investing in resource communities. One of the biggest reasons is that we do not have a framework in place that's realistic, that's cost-effective and that has a foreseeable end to it in regards to native land claims. Native land claims are not just an issue about how to interpret our constitution, how to deal fairly with special interest groups, how to deal fairly with marginalized aspects of our society. These are all very important things, and a hundred years from now, how we're judged as a society will largely be, I am sure, determined by how we deal with this very important problem. That's a given.

What we have to do is create a climate that business can thrive in, and we're not doing that by carrying on the way we have been carrying on in regards to this very important problem. Contrary to my friend who just presented, I do not believe that a results-based code is a mistake; I think it's an intelligent solution to a very difficult problem. If we have a caution about a results-based code, and we do not trust the professional ethics of foresters, then I would recommend running a few pilot projects. There are some excellent areas where this could be accomplished very simply.

Put it under the microscope; see if it works. Keeping someone employed for the sake of employment doesn't work; we've tried that. Many societies, many economies in the world have tried that; it doesn't make sense. There are many good, intelligent, hard-working people at the Ministry of Forests. They do a good job for us, but if a less bureaucratized code eliminates employment, then so be it. I'm sure there will be a place for those people in industry.

In regards to streamlining the Forest Practices Code and making it results-oriented and area-specific, we need to decide the simple questions of what rules we are going to play by. Let's make them as soon as possible and make them results-oriented and as unbureaucratic as possible. We need to create a stumpage system that is market-based and moves with the market regardless of the allowable annual cut. I'm talking about, of course, things like waterbedding. Could you ever imagine a crazier assumption in the world than waterbedding? It's madness and it's extreme. I mean, it's the kind of thing that can actually make someone with a background in economics and finance lie in bed at night and just wonder: "How could this possibly happen to me in the most productive years of my life?" That it'd be perpetrated upon such a system — it's crazy. It's kept a lot of good people out of work in this town. It has probably done more damage.

I understand the political implications of changing the system right in the middle of probably the most important trade negotiation we've ever had in the history of this province, but it's a contrived negotiation in the first place. I had the demoralizing experience of participating in a forestry forum for the last two days. Mr. Allan and Mr. McArthur were two of the speakers at it, both of whom have participated in the trade negotiation with the Americans for a very long time. They were very discouraged people, very disillusioned people; they described a style of negotiating that I think is designed for people with a stronger constitution than what we've shown so far.

We have to remember in this province that profit is not a dirty word. Consider the overall impact to our provincial economy the last time the forest industry was allowed to generate a profit. I use that word "allowed" very specifically. Stumpage was a fraction of what it is now. Real prices for our products were much higher; bureaucratic costs were much lower. Something has to give in this environment, and the only obvious answer is stumpage and government-induced costs. We cannot ask the labour sector, our IWA employees, to experience any more overall degradation in their wages. It's a fact that the IWA has not had the real wage increases that they deserve.

We have to remove appurtenancy and allow log exports across the board and in all species. I am a great believer in the ability of British Columbians to compete. If our mills are truly competitive and positioned properly, they will be able to afford these logs. We need to broaden and diversify the market for our forest sector. Part of this must be the ability to export our products wherever we see fit and in whatever form we see fit. It will also ram a fist into the Americans' negotiations strategy regarding subsidization.

The tenure system has existed for many decades. I'll just back up and make a personal observation. Canadian mills are very modern. They're very competitive; they're very effective. American mills, in my experience — aside from a handful that have been built in the last decade — are not nearly as competitive, market-oriented or customer-oriented. British Columbia mills will do just fine.

The tenure system has existed for many decades and served this province well for many years. Parts of it may be invalid, but it is still appropriate to the provincial dynamic of large Crown-owned forests. It cannot be unravelled in a year, nor should it be. Most importantly, the softwood lumber agreement must be resolved. I firmly believe that this will not be done satisfactorily without at least the implication of linkage in our negotiations across all resource sectors, including oil and gas. What I mean by that, quite simply, is that we don't have to stand up and say either/or. What would be wrong with saying: "Look. We'll get to oil and gas once we've finished the softwood lumber agreement. We just don't have the time and resources right now. We'll talk about access through our territories once we've sorted out the softwood lumber"? They're not against raising the unfortunate incidents of September 11 in our negotiations. It's our own approach to negotiating that's really hindering us.

No matter what we do with our stumpage system, the U.S. will say that it has subsidy built into it. They are crippling us in the most insidious way possible. The recent Byrd Amendment is the most cynical manifestation of this. We need to link stumpage to the market, make it fair, make it responsive and get the province back to work. Are you folks familiar with the Byrd Amendment?

E. Dutcyvich: Very quickly. That's an appropriate lead into my second message, which is that we've got an industry that's incredibly crippled because of dealing in an unlevelled playing field. It's put our industry in a position that's ripe for foreign takeover.

My next comment goes against my sort of theme of free trade, I realize. We've had repeated years of below-average returns or losses, and that's pushed our share prices into dangerously low levels. This is combined with a weak dollar to create an attractive opportunity for everyone but Canadians. We should not allow any more foreign ownership of our Crown resources until the intelligent decisions of our new political regime have had a chance to create a level playing field.

Parenthetically, think about it. For a company that's supposedly grown fat on subsidization, when's the last time that a Canadian company has executed a major investment strategy in the American forest sector?

What do you see? You see dollars heading north, not south, and it's for a reason. We've crippled ourselves.

One last comment. We participate in the small business forest enterprise program. It is an absolutely vital part of our corporate strategy. The Ministry of Forests does a hell of a good job with the tools they have. There's one tool that they need, and I sent our previous Minister of Forests a letter in this regard. We need to implement bonding for timber sales. It's absolutely critical. Bonding — not a tiny little deposit that means nothing. I could give you 14 or 15 examples in the last year alone where bonding would have created an intelligent solution to the problems that these people have to deal with.

Bonding is absolutely critical to creating a level playing field. It's a sham, what's happening out there in the small business program. It's an excellent program that's going to be scrapped because of the lack of one thing: bonding. Make people responsible for what they say they're going to do. Hold them accountable; hold their feet to the fire. Make them do it — very important.

B. Lekstrom (Chair): There you go. Thanks again, Eric, and I appreciate you getting all that information in the time frame that was allotted.

We are going to move on. Our next presenter is Lyssa Marcil. Good evening and welcome.

First of all, I'd really like to thank you guys and the Liberal government. You guys have been really hospitable toward the youth. I'm a member of BCYL, and I'm the only one in the North Island right now, as far as I know. I'm trying hard to get that working. As well, Rod Visser, our MLA, has been very hospitable. I work at a work experience program in his office right now, actually, through the school district. It's really great. You guys are really making efforts to include the youth, and I applaud you for that.

I have a question for you. Last year I was working on a documentary for ICBC. It was a Road Sense documentary called Your Life, Your Choice. It was a 40-minute movie about making good choices on the road. That was through the YEI program — youth employment initiative. I was talking to a member of ICBC just the other day, and he was saying that the YEI program had been scrapped because of the Liberals. I hadn't heard anything about that, and I hadn't heard about the Liberals taking any action inside ICBC, so I'm just kind of up in the air about that. Has there been any action within ICBC about the YEI program? Do you guys know?

K. Krueger: A new chairman was appointed at ICBC, and he was appointed to run the company. The government has not intervened directly in ICBC. Those kinds of things get said very loosely by people sometimes.

L. Marcil: That's what I figured. Okay. That's all I wanted to know. I was just going to say that if it had been cut, the YEI program is very valuable. I know, because I worked in it last year, and I could see the results. I think it's great that you guys are going to keep it in. I really hope that you continue to, because it creates jobs.

As I believe one man said earlier about the trades industry, it creates jobs there as well. The film commission is considered a trade, as you know. Being involved in that, I work at the local television studio. It's going to be a great industry. I can speak for my school, Timberline Secondary. I don't know if you've heard about it, but it's half high school, half college. Our trades program is absolutely fantastic there. We have so many things to offer. It's good. That's all I have to say. Thank you very much.

B. Lekstrom (Chair): Lyssa, thank you very much for sitting through all of the presentations this evening and coming forward with your ideas.

R. Fleming: I wasn't planning on speaking, but I want to bring this down to basics. I'm a logger. The guys I work with are all afraid. We've got another week of work. We're getting laid off. Our company has cleaned up every last stick of wood that there is out there. We know other companies are doing the same thing. This isn't a regular layoff. We believe this is to put pressure on you guys, so they can get what they want, and a lot of us think that they might.

Beyond that, the people in our Forest Service up here are worried about their jobs. Everybody up here is worried, and when you're worried, you're not going to spend any money. We're going to be saving our money because we're scared. I want you to understand that. You've got a growing deficit now. It's not going to get any better. We're not going to invest. We can't invest. We have to hang on to our money till we find out what goes on.

Maybe you're moving a little too fast on some of this stuff. Maybe it's the wrong time. We don't need our public service scared right now. We need as many people working as we can to support this little community. That's about all I've got to say.

The one thing that I would say, Ray…. I think it's fair to say that there is concern out there; that's expressed right across this province. But the reality is that we've lived beyond our means as a province for many, many years now, and it's time to pay the piper. It's not going to be easy. I think we're going to have to suffer the pain together. If we do it with balance and make the decisions based on some commonsense approaches, I think we'll do okay.

S. Coe: I wasn't planning on saying anything, but there's a few things I thought of. I'm a single parent of a 15-year-old. I work for the Ministry of Forests and for the past ten years have been doing silviculture compliance and enforcement for the small business forest enterprise program, as Eric was talking about.

I'm also a member of the Lions Club in Port McNeill, and I'm involved in the teen centre here as a treasurer. A lot of people are really worried about their funds. A lot of fundraising…. At a meeting of the Lions Club last night there were four letters from people who need help — somebody very sick with lupus who needs help to drive down to Nanaimo twice a week and a little girl with cancer. They asked us for a couple hundred bucks.

We depend on our community to donate money to help support some of these projects that we're doing. The Lions Club has no more money. So we, of course, have to use our imaginations to try to see what we can do to help these community projects. As people are facing unemployment and poverty, there'll be more requests for money. My concern is that the government is going to depend a lot on volunteers, and the funding for some of these programs, whether it's $5,000 or $10,000 for community services or whatever, won't be coming anymore. There's going to be a real falldown.

I'm very concerned that the dependence on volunteers…. People aren't going to be able to do what they have been, and the money's not going to be there to do the work that we've been doing. Families will be hurt by that. I just wanted to share that with you — kind of what Kelly had to say.

I am also concerned about the potential for a teachers' strike and the freeze in education and health. I don't think that's realistic, because the price of textbooks is expensive. Our kids are going to need textbooks and supplies and upgrades. If there are cuts in education and the teachers walk out, the ones who are hurting are the kids. I don't think it's realistic in our economic climate right now to say we're going to cut all education and health costs.

As with hospitals, costs are going to go up. If the government extended health care plan is cut, as I heard on the radio the other day, or people don't have their benefits, they won't go to the doctor when they need to. Maybe they'll wait too long. The cost to them will go up as well.

I think we have to be more proactive with our health care and our education. As somebody earlier said, the education of our children is the future of our province. Those are my two main concerns: cutbacks in the small, volunteer communities and all the different communities.

B. Lekstrom (Chair): Stephanie, thank you very much. Just a couple of quick comments regarding the issue when you talked on possible cuts to health care. As a government we certainly are committed to not cutting it, and you've touched on the issue of the possible freeze if our economy doesn't grow. The facts are that today, actually, we have increased the health budget this year by $200 million. It is a challenge trying to sustain the growth that's occurring there. It'll take all of us together, I think, to be able to work to that solution.

Education — the issue of a strike by the B.C. teachers, for instance. There is a possibility. There is essential services legislation in place, which then will be determined not by government but by the labour relations panel. Like all British Columbians, I hope that a negotiated settlement is achieved, because I truly believe that our kids can't be used as pawns in a process. Thank you for your comments. I appreciate those.

I will call on our last presenter this evening, Dan Berkshire. Good evening, Dan.

D. Berkshire: Hi. My name's Dan Berkshire. I hadn't planned on speaking tonight, but while leaving Campbell River tonight I became aware of something which is going to be very devastating to the community.

One of the many hats that I wear is as chairman of the Campbell River advisory planning commission. I am the past chairman of the Campbell River district watershed commission. I've been involved in land use planning processes since about the mid-1980s. As one of the senior members of the directors in the Mining Association, I served as the alternate head-table spokesman during the Vancouver Island CORE process. I have a long familiarity with the culture of government as it exists in British Columbia. I also have a background in legislative law and the history of our English legal system.

I have seen my monthly agenda for applications for rezoning considerations and development go from a document six years ago, when I first was appointed, to something that was an inch thick, down to where some months now we don't even meet because we have nothing to discuss. Campbell River's economy is far more diverse than the three communities up here, so if development has decreased to the extent that it has in Campbell River, you can imagine what has happened up here. One of the few bright spots has been what's been happening in the agriculture business.

Omega fish farms or aquaculture, one of the world's largest firms, has proposed to build an integrated value-added plant in Campbell River. This would include the production of fish food, a boxing plant and value-added repackaging, cutting, filleting and processing of fish. They have optioned to purchase a site which is right below Campbell River's industrial park, but it lies just outside the Campbell River district boundaries and within the Comox-Strathcona Regional

District. It has to be on the waterfront. The land involved, as is all land outside of the municipalities or the agricultural land reserve in our area, is within the forest land reserve. It is controlled by the Land Commission.

Now, this project can create an estimated 353 jobs in Campbell River. It is desperately needed. It has the support of the local community, all levels of government and, surprisingly enough, many of the groups that normally are not too pro-development. Tonight I learned that the rezoning application for this land, because it is in the forest land reserve, even though the land…. Like I said, it's between the industrial park and the water. It's been logged. You drove by it as you drove up here. The Land Commission has refused the application to remove it and allow it to be zoned for industrial use.

I can tell you, having talked to the president of Omega, that considering the regulatory hurdles they had to overcome to build this plant and all the requirements of DFO, this is probably going to be a deal-breaker. If any of you have read the Land Commission Act, you will understand that while the pretext of this act is to preserve the forest land base, anyone reading this act can see immediately that what it is about is stopping any kind of development. That is the mandate. The powers of the Land Commission are arbitrary. It's unaccountable. In fact, within both the forest land reserve and the agricultural land reserve, its powers supersede all other legislation. It doesn't have to justify its decisions.

If you're going to have development and income, and if we're going to have a renewal of the economy of our province, then there has to be some basic restructuring of commissions like the Land Commission, which basically are unaccountable to the Legislature. They're only accountable to themselves. I know that there are changes coming in terms of the community charter. I would urge you to look at this. As someone who has worked very, very hard on land issues and is trying to encourage development in all aspects — I haven't even talked about my work — I can give you example upon example about the Land Commission and the kind of arbitrary decisions it has come down with which make no sense. You're not going to see, for instance, anything within the mineral industry. With its

superseding powers and the attitude it has taken towards development and its ability to countermand all other pieces of legislation…. All of the great efforts that you're making now in terms of deregulation and restructuring are going to go for naught if, arbitrarily, this commission can just simply decide on its own to prevent any development.

Really, that's all I have to say. I'm not going to say, "I'm mad as hell, and I'm not going to take it anymore," but I'm pretty devastated by the news that I received tonight. I was floored. Thanks very much.

B. Lekstrom (Chair): Dan, thank you for coming and presenting to our committee this evening. Certainly, nothing's ever over until it's over, so I would encourage you to press on and hopefully be able to change this, possibly.

D. Berkshire: Well, true, but I can tell you the problem with capital and investment is that it flows along the path of least resistance. I know that government is making a tremendous effort to try to reduce that resistance, but we're running out of time. This is the kind of thing that can undo so much of the good work you're trying to do.

That concludes our meeting for today. Our last presenter was Dan, having just spoken. Before we close the meeting, I would like to take this opportunity to thank all of the presenters who came out today and this evening, as well as all of the people who sat through the meetings to listen and hear what was said to our committee. I would encourage each and every one of you, if you thought of anything through these meetings or between now and the end of this month, to please forward your ideas and priorities regarding next year's budget to our committee. Your views and ideas will be given full consideration equal to what we receive through the verbal presentations.

I extend a huge thank-you to the people that have come out today from Port McNeill and the surrounding area. With that, I wish you all safe travels home, and thank you again. The meeting is adjourned.

REPORT OF PROCEEDINGS (Hansard)

SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
FINANCE AND GOVERNMENT SERVICES