2001 Legislative Session: 2nd Session, 37th Parliament
SELECT STANDING COMMITTEE ON FINANCE AND GOVERNMENT SERVICES
MINUTES AND HANSARD
SELECT STANDING COMMITTEE ON
Thursday, October 25, 2001
Present: Blair Lekstrom, MLA (Chair); Tony Bhullar, MLA (Deputy Chair); Harry Bloy, MLA; Kevin Krueger, MLA; Barry Penner, MLA; Lorne Mayencourt, MLA
Unavoidably Absent: Brian Kerr, MLA; Ralph Sultan, MLA; Ida Chong, MLA; Joy MacPhail, MLA; Jeff Bray, MLA
1. The Chair called the meeting to order at 5:03 p.m.
2. Opening remarks by Blair Lekstrom, MLA, Chair, Select Standing Committee on Finance and Government Services.
3. The Committee heard from the following witnesses on the matter of pre-budget consultation:
1) Brian Johnson
2) Niels Hansen
3) Jody Martens-Forrester
4) Don Silversides
5) Victor Prystay
6) Vanessa Bramhill
7) Alanna Johnston
8) Susanne Bellefontaine
9) Vince Arimare
10) Lee Anne Deegan
11) Prince Rupert Port Authority
12) Odd Eidsvik
13) David McGuigan
14) Bob Payne
15) Brian Denton
16) Gary Coons
17) Inderjit Grewal
4. The Committee adjourned to the call of the Chair at 9:04 p.m.
Blair Lekstrom, MLA
The following electronic version is for informational purposes only.
The printed version remains the official version.
THURSDAY, OCTOBER 25, 2001
Issue No. 18
|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
|Committee Staff:||Jacqueline Quesnel (Committee Assistant)|
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THURSDAY, OCTOBER 25, 2001
The committee met at 5:03 p.m.
[B. Lekstrom in the chair.]
B. Lekstrom (Chair): Good evening, ladies and gentlemen. I will call our committee meeting to order. I'd like to welcome everybody here this evening. I look forward to hearing the presentations put forward to the Finance Committee.
My name is Blair Lekstrom. I'm the MLA for Peace River South and Chair of the Select Standing Committee on Finance and Government Services.
Prior to getting the other members of the committee to introduce themselves, I would like to say a few things about the proceedings this evening. The presenters will be given 15-minute time slots. Usually it's ten to 12 minutes for the presentation, and then if there are any questions from members of the committee regarding that presentation, we'll try and sum that up in two or three minutes. I know it's not a great deal of time, but there is a large number of presenters that would like the opportunity to speak to the committee, so we've scaled it down to that time frame.
Following the registered presenters this evening, there will be a time frame at the end of the meeting called an open-mike session, at which time people that have come and listened and feel that they have something that they could add to the discussion surrounding the prebudget consultation will be given the opportunity to address the committee. If you would, you could register with Jacqueline at the back of the room, and that way we will know our time frames.
Our mandate is to host public hearings and accept written submissions with regards to our prebudget consultation process on the priorities and ideas surrounding next year's budget and the development of it. Our committee is mandated to report out by November 15, at which time our written submission and report will become a public document and will be utilized by the Hon. Gary Collins, our Minister of Finance, to help develop next year's budget.
This evening all of the proceedings will be recorded and transcribed by Hansard staff. Over to my right, with us we have Catherine Schaefer and Virginia Garrow. As well, I mentioned the committee assistant, at the back of the room, Jacqueline Quesnel. To my left is Anne Stokes, our Committee Clerk.
We've held 15 meetings thus far across British Columbia. This is our sixteenth and final public hearing. Certainly, we've heard a wide range of views, and it's been very interesting, on all of the topics that have been brought before this committee. With that and without eating up too much more of your time, I would like now to begin with introductions and ask Kevin to begin, on my right.
K. Krueger: I'm Kevin Krueger from Kamloops–North Thompson. I'm pleased to be with you. Thanks for having us.
B. Penner: I'm Barry Penner, MLA for Chilliwack-Kent, and I'm thrilled to be back in Prince Rupert.
T. Bhullar (Deputy Chair): Hi. I'm Tony Bhullar. I'm from Surrey-Newton, and I'm Deputy Chair of this committee.
L. Mayencourt: I'm Lorne Mayencourt, the MLA for Vancouver-Burrard.
H. Bloy: I'm Harry Bloy, the MLA for Burquitlam, a new riding in the lower mainland.
B. Lekstrom (Chair): With the formalities out of the way, I forgot to mention that there is coffee and water on the back table. Please feel free.
I will now call on our first presenter this evening, Mr. Brian Johnson.
B. Johnson: My name is Brian Johnson, second generation Rupertite, happily married for 22 years and father of three great children. My work history includes public accounting, industrial accounting, federal grain inspection and weighing, and assistant supervisor of a small agriculture product export elevator. I'm presently employed with the municipality. I have been on the executive board of CUPE 105 for ten years — now, that's the past tense; I've been out of public life there for two years — and held the position of president for five years. I've held positions, including president, over a four-year period with the Prince Rupert and District Labour Council.
Who you're going to hear from tonight is Brian Johnson, friend, neighbour and family man of small-town B.C. in the north. I wouldn't be here today if I didn't have concerns for our community, our region and the province as a whole. As you well know, the north is one of the largest electoral ridings in the province, covering Stewart, the Nass, Meziadin Junction to Klemtu, Bella Bella, Bella Coola, Hartley Bay, Prince Rupert, Port Edward and the Queen Charlottes, and also including villages.
We have a large geographical area, where some communities are accessible solely by air or sea. I am aware that the funding arrangement is calculated demographically, but I find this funding arrangement has its shortfalls because of our expansive geographical area comprised of several small communities.
Citizens in the north choose to reside in their communities because of employment and the friendliness and cultural identity of small-town B.C., as well as the lack of hustle and bustle connected to the big city life — four very tangible benefits and luxuries that we as northern British Columbians enjoy and are always in fear of losing.
The present funding allocation process deprives our smaller communities of benefits such as quality health, education and provincial assistance through a cost-sharing grant process, to name a few. I'll touch on those tonight. Our smaller communities cannot
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generate enough taxation revenues for capital projects like larger communities in the lower mainland area. Therefore, in a lot of cases we do without locally.
Three years ago my eldest daughter had to be sent via ambulance, with two paramedics, 140 kilometres to Terrace for an appendectomy. At that time, Rupert, Terrace and Kitimat shared on-call surgery during the weekends. The doctors were working 24-seven, so by alternating weekends on call, the doctors could be afforded time off. My wife spent two nights and three days in Terrace with our daughter, thus taking time away from the rest of the family. My mother drove to Terrace to pick up my wife and daughter — a 280-kilometre round trip.
Over 13 years ago, my wife developed complications during her seventh month of pregnancy. We had no gynecologist here at the time, so she was flown via air ambulance to Vancouver, where she was hospitalized for a month at Grace Hospital, now B.C.'s Women's Hospital. She returned via air ambulance when our baby was three days old and spent another seven days in hospital. I didn't get to see my wife for a month, or the birth of my third child, as I had two young children at home to look after.
Prince Rupert received a gynecologist shortly after this, but recently I've heard stories of mothers having to travel down the road to other communities, even as far away as Calgary, to have their babies, the reason this time being a lack of beds or specialized maternity nurses. Things haven't changed. We still have one surgeon in Rupert working under the same arrangement of alternating weekends between Rupert, Terrace and Kitimat for on-call surgery.
My youngest daughter had her appendectomy in Rupert on April 22 this year, and, God forbid, it was a weekend. Our surgeon had seen our daughter the day before and decided to operate the next day. Her appendix had ruptured when they went in. Thank God for his oath, as it was his weekend off and he was not on call, but he did the surgery. Otherwise it would have been another trip down the road to Terrace, and who knows? Her nine-day stay in hospital could have been a lot longer or, heaven forbid, the unthinkable.
Helicopters, jets and pilots are now part of our medical health care system in northern B.C., while we're in need of surgeons, doctors, nurses and health care providers, as well as medical equipment. The people of Prince Rupert were successful enough in raising funds to purchase a secondhand CT scanner that the province wouldn't provide because there was already one in Terrace, 140 kilometres down the road. I'd like anyone to travel these roads in the wintertime. We still have no committed funds from the provincial government to operate this piece of equipment when it gets into operations.
If helicopters were surgeons, jets were doctors and pilots were nurses, we would have the health care system that northern British Columbians deserve and expect but don't get. What we have is an expensive Club Med of a medical system for citizens of the north. The system is operating with skeleton health care staffs. We have people flying south, out of pocket, to give support to close friends and family requiring health care.
The freezing of the health care budget is of no benefit to British Columbians when the system is already on overload. What we need is nurses, doctors and surgeons with a good infrastructure around them so that they can accomplish what they set out to do, and that's provide good health care. Health care is an investment, not an expense.
In regards to education, what about our college? I've got a child that has been down in Vancouver now for four years getting her post-secondary education. Our Liberal MLA, Bill Belsey, is quoted in his campaign in the riding: "First we had wine and cheese, then we had a sod-turning ceremony, now we have a black hole in the middle of Prince Rupert." We still have that black hole in the middle of Prince Rupert, because funds previously committed to this project were cancelled when the Liberals came into office.
There were promises from Bill Belsey and the Liberal Party that the college would be built if they were elected. No one in the community was aware that a public-private partnership would be the condition for the project to come to fruition. I'm of the opinion that P3s do not work, as moneys that go to the private sector include a profit on leasehold agreements.
Education, as well as health dollars, are better spent on an at-cost basis. Profits to private investors increase costs to both public health and education. Here again, you have to realize that education is an investment, not an expense. There are indicators in the province that due to the operating deficit that the provincial government is facing, cost-sharing grants for capital projects may not be made available to lower governments. This is detrimental to all communities who are always striving to improve their living conditions and to attain economic prosperity.
Prince Rupert is at risk of losing economic diversity should the cruise ship dock and the bridge to Digby Island be put on hold until Victoria gets its books in order. The wait of one, two or three years will hinder the efforts of our community and, in turn, put a stranglehold on our economic growth, especially at this time, when unemployment sits between 40 percent and 50 percent. Our community, like many other communities in the province, can't afford to wait one, two or three years, as our very existence is at stake. Communities are an investment, not an expense.
After the provincial election the government legislated health workers back to work; teachers were legislated as an essential service; and yes, British Columbians received their 25 percent tax break. Gordon Campbell attended the first ministers' conference, where it was decided that the provinces required $7-plus billion in federal funding to cover provincial health costs. Gordon Campbell knew he had a problem to deal with.
Shortly after this meeting, the federal Liberal government refused the request. They said that if Ontario, Alberta and British Columbia can afford to reduce taxes, they can afford health care. They didn't want this money to go to balancing budgets. That was a good answer from the feds. We all had to expect that from
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them. We can't wait for the feds to buck up. We need improved health care, and we need improved education now.
If we mixed education with a frozen budget and costs that inflate annually and health care with a frozen budget and costs that inflate annually with the tax break you gave us after the election, including the tax break you were proposing to give us in 2002 and the operating deficits for the next three years, one can only see that this is a recipe for disaster.
If you take the tax breaks out of the recipe or, in your case, take back the tax breaks — and that's okay — the education and health issues and many other responsibilities can be successfully achieved. I have a cheque here today for $300, our present tax break received to date from my wife and I, to improve the recipe for you, my family and all British Columbians. I hope British Columbians follow my example.
Every citizen in this province is an investment, not a tax burden and definitely not an expense. Rescind your tax breaks, balance the budget, pay down the debt, invest in health and education as well as the communities that we British Columbian citizens reside in. That's what I expected.
B. Lekstrom (Chair): Thank you very much, Brian.
I will look to members of the committee if there are any questions of Brian at this time.
B. Penner: Have you read the prebudget consultation report?
B. Johnson: No, I haven't. I'm responding to what I see in the province today, and I am scared. We're going to end up with economic refugees if we keep on going down the same path that we're going down.
B. Penner: You're absolutely right. That's what happened for the last ten years. B.C. has lost a lot of people out of the province. If you had read the prebudget consultation report, which we're here to take presentations on, it notes that even without the tax cuts, we're facing a $3.8 billion deficit by 2004-05. That would have meant that in the next five years, our provincial debt would double again, after the previous government doubled it in just ten years. That rate of debt growth, in my view, is not sustainable. We're looking for some creative ideas to try to get costs and government under control.
You're quick to dismiss the opportunities that P3s provide. That's one way we can try to save money so we can focus resources in health care and on patients. I wonder if you have any other suggestions for how we can get the costs of government under control.
B. Johnson: It's interesting that you bring up the past ten years. Our federal Liberals have finally committed to putting money back into health care. I think we're finally getting on the road to recovery and possibly being able to work with the federal government, but I don't think the tax breaks that we have been given put us in a place where we can get a foot in the door of the House of Commons so that we can ask for these funds.
When you speak about P3s, I really have a problem with that. If I had to invest $9 million in a college…. That's the money that was allocated for this college. As they say: "Liberals are business" or "B.C.'s open for business." As a businessman I would be looking at a return of approximately 10 percent a year over a ten-year period.
If the government takes that stance, we're looking at half a million dollars worth of rental here. If you're looking at 10 percent on $9 million, the person who has built that building is looking at roughly $900,000 a year. If the province is going to turn around and buy it back after time, you're buying it back at market value ten years down the road.
B. Penner: You might be interested to know that in Chilliwack, we've just about completed a new courthouse that is a P3. We could not have done it if the government had done it on its own. For a $5 million provincial investment, we're getting a courthouse worth about $10 million. That's because of the commercial opportunities that the private developer is able to extract to generate more economic return on the project than simply renting it to the government.
By having some commercial space on the ground floor, taxpayers are getting a courthouse which we otherwise could not have afforded. The people of Chilliwack are very pleased to have that opportunity. I just ask that you not be quite so quick to dismiss the potential to include the private sector in looking for creative solutions. We're going to need everybody's help here in the years ahead.
B. Johnson: I hear you. Thank you for your consultation.
B. Lekstrom (Chair): Brian, I would like to thank you for your presentation. I think you've hit on an important issue. It is going to take all of us and a lot of work to put things back together. I think the value of health care and education can't be overstated. We will do the best we can, with what we hear from British Columbians through this tour and through the written submissions, to put together a report, which will be filed by November 15, to reflect what we've heard. I thank you again.
B. Johnson: Just one. I know you're supposed to ask me questions, but I'd like to ask you one. Will you take my cheque for $300, just as a gesture?
B. Lekstrom (Chair): You know, I think I would rather have…. If that was the case, I believe our Minister of Finance would accept it, but to hand it to the Finance Committee…. I'm here to hear your views, not take your money. We're trying to put money back in your pocket, not take it.
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B. Johnson: Twenty dollars every paycheque doesn't do me any good. Thank you.
B. Lekstrom (Chair): I will call our next presenter this evening, Mr. Niels Hansen.
Good evening and welcome.
N. Hansen: My name is Niels Hansen. I work for the Ministry of Children and Family Development in community living, providing services for children with special needs. As we know, the government has asked all the ministries except Health and Education to prepare plans to cut 20, 35 and 50 percent of their budgets over the next three years. My view is that cuts of this magnitude will have a devastating impact on the people of British Columbia, and the people of the north in particular.
I have been a resident of the northwest for the last four years. During these four years, I have watched how the health care delivery system has steadily declined. We have seen doctors and other specialized services leaving our communities — services which cannot easily be replaced.
On top of that, we are currently experiencing economic hardship in Prince Rupert. The fishing industry has been in decline for years. Five hundred to 600 employees at the Skeena Cellulose plant have been laid off for several months, and in fact Skeena might completely shut down. Also, we have had the unexpected freeze on construction of the community college campus, and up to 50 businesses have closed in Prince Rupert this year. Homes are up for sale, and people are leaving our community.
When the government is saying that it wants to cut up to 50 percent of our services, I think we have to be critical about how they're going to do that without further destabilizing our lives. Last week Health Services minister Colin Hansen announced $7 million in cuts to provincial drug and medical benefits while hinting strongly that there's more to come. Does that mean that we have to prepare for user fees for services? On October 15 we read that B.C. put all new social housing projects under review. The same month, the government announced that it intends to reduce the province's welfare costs by up to a half.
As I said earlier, I'm working with children with disabilities. When the supported child care program was introduced, it was intended to provide extra equipment and training to child care providers so that all children are able to participate in a typical child care setting. However, currently we have 15 children on the wait-list for supported child care.
As I understand it, the government is still committed to providing supported child care, but there is no extra funding available at this point. This means that we have children with significant physical, cognitive, behavioural and emotional disabilities that cannot attend preschools or day cares, because these day cares or preschools have no extra funding to hire additional staff.
We have parents in this community who are not working or upgrading their skills because they can't find a placement for their children. The day care staff are really getting shamefully low wages. They are working long hours, extra hours without pay; doing fundraising to buy toys, books and equipment; or planning for individual goals for children.
In Prince Rupert we have no speech and language therapists. They left about a year ago, so we don't have any who can provide assessment and intervention services to our preschool children. We have no audiology services. We have children in this community with autism who are receiving minimal services. We do have a behaviour consultant who comes in from Terrace, and she does an excellent job.
She consults with the parents, provides some training and demonstrations of behaviour techniques and so on, yet we don't have any early intensive behavioural intervention. Research has shown that early intervention can be a key in improving social, language and academic skills. It can lead to more opportunities for a person with autism to build positive relationships and experience meaningful participation at home, at school and in the community.
In Terrace they have a specialized respite home that is staffed 24 hours and can accommodate children with medical and behavioral needs. We don't have that in Prince Rupert. Often we are seeing children and parents who have to go down to the lower mainland or go into Terrace for assessment or to receive services. It takes one and a half hours to go to Terrace and back again.
I also cover the Queen Charlottes. On the Queen Charlotte Islands they have no pediatricians. The physiotherapist and occupational therapist left the islands four years ago. The Queen Charlotte Islands do not receive any supportive child care. On a positive note, I should mention that this summer the Queen Charlottes did receive some funding to hire a supportive child care consultant to work nine hours a week. They have received funding to have a physio and an OT from Terrace come to the Queen Charlottes a few times a year.
Still, lots of parents have to go for assessment either in the lower mainland, Terrace or Prince George, and they suffer an unreasonable financial hardship due to the excessive transportation costs we have in the north.
When I look at social work, when I work in this community and see that services will be further cut, it's just difficult for me to see how we can do that further. I think that when the government have to do the cuts, they have to be responsible and try to meet the needs of each community. Prince Rupert is kind of unique in that it's very remote and isolated — and also with the Queen Charlottes.
B. Lekstrom (Chair): Thank you very much, Niels, for your presentation.
I will look to members of our committee, if there are any questions surrounding your presentation.
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Niels, I'll just maybe comment briefly. Coming from the north, I recognize the problems that you face here in Prince Rupert. I represent Peace River South and Dawson Creek, and the transportation costs are very reflective of what you face here, and the previous presenter as well.
We do have truly more than a single-tier health care system now operating very well in our province. There are a lot of out-of-pocket expenses faced by people having to go down themselves or take their children down. We're hoping to correct that. It is one of the things we're going to try to move forward on. I appreciate your presentation.
Our next presenter this evening is Jody Martens-Forrester. Good evening.
J. Martens-Forrester: Hi. I appreciate the opportunity to address the committee. My name is Jody Martens-Forrester. I'm the sole parent of a 12-year-old girl, and I've lived in Prince Rupert for a year. I'm a child protection social worker with the Ministry of Children and Family Development. Having read the information available on our ministry's core review of services and other information regarding the proposed 30 to 50 percent reductions in services, I'm extremely concerned for our clients, for our community and for our province.
The first people to be affected by these cuts are the most vulnerable members of our society — notably, children with disabilities. Our government is telling us that some mythical entity called community will step in and provide services once the government fails to do so, but in Prince Rupert we already lack services in terms of community agencies. The few that we have don't have the staff or the funding to provide for the families that are on the wait-list now.
There isn't enough money for providing social support services to attract skilled people in the private sector to provide these services that the government plans to eliminate. Furthermore, many of the skilled professionals who are now in this community are already talking about leaving as a result of these proposed changes. Certainly, no one's lining up to replace them.
The Liberal government sells us these cuts by handing us rhetoric about how an individualized funding model will allow families more autonomy and self-determination in terms of choosing what services they require, which is politico for: "You're on your own." In reality, most of the families we deal with don't know how to go about accessing services, don't know what services are available — it's precious few now and soon to be fewer, actually — and don't know what they might be eligible for.
Many families that I deal with have multiple issues, including alcoholism, depression, child abuse and neglect. Without intervention, many parents do not seek services on their own for themselves or their children. That's when it becomes a child protection issue.
I've recently read some very ill-informed statements about child protection practice, many of them from government officials. They all seem to include the erroneous belief that we remove children and ask questions later. In reality, we already treat removal as a last resort when family supports have failed. I cannot understand how government is proposing to provide more family supports to avoid taking children out of the home while, at the same time, talking about huge cuts to services and privatization.
These proposed changes in practice will place children at risk. They have one goal, and it isn't, as stated, to keep families together. The goal is to save the government money. Even though we know that it is primarily the responsibility of the family to care for children and keep them safe, the reality is that some people abuse and neglect their children. We can't wish that away, ignore it or abdicate our responsibility for ensuring the safety of children.
We're seeing the politics of backlash here. After the Gove inquiry, child protection became very cautious. Now we see a pendulum swing to a more hands-off approach, but with the proposed policy changes and cuts to services, kids will die. There will be one high-profile case like that of Matthew Vaudreuil — or more than one case — and there will be a huge public outcry and a media frenzy.
It will cost the government more billions of dollars to revamp the system again, to make it not better but just different again, and we'll essentially be back where we started, except that it will have cost billions of tax dollars and incalculable human loss and will have garnered some very bad publicity for the Liberal government.
These proposed reductions are just bad politics and bad economics. You don't have to be John Maynard Keynes to figure that one out. With reductions in social services and high unemployment, people won't consume, businesses will continue to close, and there will be even fewer jobs and more need for social services, resulting in a continuous downward spiral without a government injection of capital in the right areas.
Alberta and Ontario got away with privatizing social services, but they didn't do it in the middle of a recession, and those provinces have a completely different resource and economic base. B.C. is not a wealthy province. Trees and fish do not equal oil and gas or manufacturing. Those private sector service delivery models will not work here. I can't help but wonder: if the government's goal is to eventually privatize all these services, what will we need government for? To collect taxes and distribute them equally among the rich has come to mind.
Voters are beginning to understand that the promised tax reductions and balanced budgets can only come at the expense of services and will, inevitably, mean more personal economic hardship for the individual. We're very reactionary voters in B.C.
Last evening I was discussing this meeting with my colleague and expressing some nervousness about addressing this committee. He said: "Well, I think it's important to remember that the government is wrong." I thought: "Yes, that's it. These reductions in service and proposed changes to service delivery are wrong."
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We elect our government representatives to represent our interests as citizens, not just the interests of big business or the interests of government. The government is designed to serve the citizens, not the other way around, and these cuts and these changes do not serve us. They are wrong, and they do not serve.
B. Lekstrom (Chair): Thank you for your presentation. I will look to members of the committee to see if there are any questions.
B. Penner: Just one question. Did you read the prebudget consultation report?
J. Martens-Forrester: I did.
B. Penner: Do you have any specific suggestions about how the government can get costs and finances under control?
J. Martens-Forrester: Well, like the previous speaker, I believe that individual tax cuts were a mistake. I would like to comment that privatized services, being driven by the profit motive by the providers, do not save money in the long run. Community agency services need to be funded by someone. Government contracts will still be in place. I do not see where that is a cost-saving measure.
B. Penner: You don't have any other specific suggestions?
J. Martens-Forrester: Afraid not.
B. Lekstrom (Chair): Jody, I see no further questions. I'd like to thank you for coming and presenting to our committee.
Our next presenter this evening is Don Silversides. Good evening.
D. Silversides: Good evening, Mr. Chair and members of the committee. Thank you for allowing me to make an oral submission to your committee regarding the provincial budget and fiscal policy for the coming fiscal year.
My submission represents my personal views and not those of my firm, my clients or any organization. I was born and raised in Prince Rupert, and my family has lived in the northwest for three generations. My father's family helped to build the town here, in 1908, before they incorporated it. I'm a lawyer, and I've been practising law in Prince Rupert for more than 30 years.
Although I principally practise commercial and corporate law, or what some people call business law, my law firm, of which I've been the senior partner for many years, carries on a large general practice, and our clients are located in and are representative of the demographics of Prince Rupert and surrounding areas, including the Queen Charlotte Islands.
As to fiscal policy generally, my message is simple: stay the course. Many promises and commitments were made by the B.C. Liberal Party before and during the recent election campaign. So far those promises have been kept, and that's pretty unusual. Keep it up.
Here, like elsewhere across the province, all of us will benefit by the new course your government has promised to take. We need essential government services to be provided more effectively and efficiently. As a result of my dealings with government, I'm convinced you can deliver a bigger bang for the same buck. Resist the temptation to throw money at problems. Those solutions have been tried, and they do not work. If you can get B.C.'s fiscal house in order, we will all be better off, and everyone will be able to enjoy better government services at less cost. We need you to balance the budget over the next few years and to restore prudent and effective financial management in British Columbia.
I do not know whether you would consider it a finance or budget issue, but I certainly support vigorous efforts being taken to reduce the amount of red tape and bureaucratic foot-dragging that has hurt every single business I know of. When those businesses are hurt, so are their employees and so are their families.
As a final general comment, thank you for the tax cut. When it makes budget decisions, I urge your government to consider it a priority that rural and smaller centres outside the lower mainland and the capital region are preserved and developed. It is not in the best interests of our province or its citizens to have almost all of its population in one small corner of the province or to focus all of its energy and efforts on one or two big cities.
What we need now, more than ever, are leaders with vision for the whole province. Vision, for instance, like Premier W.A.C. Bennett had when he opened up the province by building new highways and a railway system.
While politically popular because so many votes are in large urban centres and their ridings, the rest of the province does not benefit when hundreds and hundreds of millions of dollars are spent on projects such as convention centres, rapid transit and other lower mainland megaprojects.
Outside of the lower mainland, our priorities are different. These priorities should not be overlooked when the government plans B.C.'s economic future. Ultimately, the economic well-being of B.C. and its citizens, especially those living in the lower mainland, depends on the economic health and well-being of the whole province.
While I do not have any specific fiscal measures to propose, I do want to say a few words about northwestern British Columbia and, in particular, our coastal city of Prince Rupert and the surrounding coastal areas. Times are not good here; in fact, they are very bad. They have been very bad for at least the last four years, and they're getting worse. Even if Minister Thorpe finds a buyer for Skeena Cellulose, the economy here will not recover for quite a long time. And if you can't, I'd rather not talk about that right now.
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Although the numbers are not yet firm, it looks as if Prince Rupert has lost up to 20 percent of its population over the last four years. Ever since I was a little child, every available space on our main street, 3rd Avenue, was full. Until a few years ago, it was very difficult to find a location if you wanted to move your business there. Now there are empty storefronts everywhere. In an eight-block area last winter, I counted 30 empty spaces, which was pretty shocking for me after having grown up in a town where there wasn't a single empty space on our main street.
The rate of foreclosures has skyrocketed, I'm afraid to say. The prices of homes and commercial properties have plummeted. Many properties are being sold for less than 50 percent of what they were worth just a few years ago. Although perhaps not suffering quite so badly, other communities in the northern corridor also have severe economic difficulties. These problems should be borne in mind when the new budget is being developed.
I hope your committee and, through you, the Minister of Finance appreciate the significance of Prince Rupert and its port and the importance of preserving this valuable asset to the province as a whole. We are home to the second-largest port on the west coast of Canada and are at the end of a continental railway system and the second trans-Canada highway system. We are the southern terminus for the state of Alaska ferry system and the northern terminus for the B.C. ferry system.
There is enormous unused potential here that can be used for the benefit of all British Columbians. If any of you are history buffs, you will know that keeping or acquiring ports, particularly one as strategically located as this and with such remarkable infrastructure, has even led to countries going to war. That's how valuable ports can be.
It would be a great loss for our province if this community and any of its existing port or other infrastructure were allowed to die, and it would be a shame not to take advantage of the tremendous opportunities available to improve the provincial economy by increasing the utilization of this port and the northern transportation corridor from the Prairies through Prince George to the coast.
While I do not know exactly how the next or subsequent budgets can be structured to preserve and develop the port of Prince Rupert, I have a few ideas I would like you to consider. First, while it will not help to subsidize businesses or potential businesses using the port, government does have a role to play in developing and helping to develop infrastructure which will promote the increased use of our port. I encourage you to tell the Minister of Finance that he should include such expenditures in the next or future budgets for this purpose, particularly if there are opportunities for private-public partnerships to do so.
Examples of infrastructure projects the government might wish to consider making an investment in — together with local, federal and, yes, American governments and private investors — include the Tsimshian Peninsula access project and the cruise ship facility. If you don't yet know what the Tsimshian Peninsula access project is, it is a proposal to connect Prince Rupert, by a fixed link, with Digby Island — it's right over there, where our airport is and where you'll leave from tonight when your plane takes off — and the communities of Metlakatla and Lax Kw'alaams, on the Tsimshian Peninsula. This would significantly increase the viability of the port through improved airport access and would provide access to two isolated first nations communities. Lax Kw'alaams, or Port Simpson, as it used to be known, is one of the largest reserves in British Columbia without road access and the potential site for a major development by the state of Alaska, if they can get access to there from here.
As to the cruise ship project, nothing could be more timely than this proposal after the tragic events of September 11, which have resulted in a massive repositioning of the U.S. cruise ship fleet. Many tour operators would like to include Prince Rupert on their itinerary. If they were to do so, a relatively modest investment in this infrastructure might be repaid in a relatively short period of time.
Secondly, whether it finds its way into the budget, taking steps to allow development of our enormous north coast offshore oil and gas would benefit the port and the North Coast region and would also benefit everybody in British Columbia by generating enormous tax revenues.
Thirdly, allowing the establishment of fish farms on the north coast and lifting the moratorium on aquaculture in our area would also put people to work, improve our economy and generate new tax dollars.
Fourth and finally, ensuring B.C. Rail cooperates with the CNR to increase the use of the northern corridor is another way your government can help.
I want to thank you very much for coming to Prince Rupert. I also want to say how impressed I am that the Premier has you working this hard so shortly after you were elected to a new government. Not only did you sit in the Legislature almost in record time, but as soon as you got out of the Legislature, you started travelling around the province, going from community to community. I think that's an excellent thing to do: to find out throughout the province what people want their government to do.
I'd be happy to answer any questions the members of your committee might have.
B. Lekstrom (Chair): Don, on behalf of the committee, I want to thank you for your presentation this evening. We'll look to questions.
L. Mayencourt: Your last point or recommendation had to do with encouraging B.C. Rail to work with the CPR? CNR?
D. Silversides: The CNR. The northern line, which used to be their main line before they built a spur to Vancouver, comes from Edmonton through to Prince Rupert. That was their main terminus. B.C. Rail, as you know, goes from Squamish up to Prince George and
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north. Really, the two lines don't connect. It's very, very difficult for products coming from the Peace to hit this main line and come to Prince Rupert.
Railways don't always cooperate very well, which is a bit surprising, since B.C. Rail, through a subsidiary, has a very major investment in Prince Rupert called the Fairview Terminals. They are located near where you will take off on your ferry tonight.
Commodity products coming up from Vancouver and coming down south from the Peace area really can't get onto this CN line to come across to Prince Rupert — a line that is underutilized and much of which is double-tracked. In the 1980s $500 million was spent to upgrade this line. Dangerous products can easily be handled here as there is little population along the way and at the terminus, which is actually located outside of Prince Rupert, not downtown, as it is in Vancouver. Real opportunities are there, and I think B.C. Rail can be used as a vehicle for public purpose.
L. Mayencourt: That would sort of fix your problem with the port, getting more traffic in the port.
D. Silversides: It would certainly help.
T. Bhullar (Deputy Chair): Just a quick question about this fish aquaculture moratorium. Do you know the reason why there's this moratorium? I'm not familiar with it.
D. Silversides: Essentially, a moratorium was put in before development really got started on the north coast. There were a couple of fish farms, and they didn't succeed in the beginning, but many more were developed down south. The last government allowed more development to take place but only south of here, around Vancouver Island. There's all kinds of opportunity here. Everybody seems to be in favour of it. Everybody keeps saying the moratorium will be lifted, but every time, it's another six months in the future. People are ready to go. It's the future of fishing, and we'd like to benefit.
K. Krueger: It's somewhat mystifying to me why rail companies aren't using Prince Rupert more for shipping grain and all kinds of things. It's two days closer to Asia by rail line — no demurrage charges, as I understand it. Why do they want to channel the traffic down to a busy place like the port of Vancouver?
D. Silversides: Well, that's very hard to figure out. There are some built-in disincentives. Some of them don't really involve your government directly; they involve problems with the federal government. I am pleased to see that Premier Campbell is now wanting to work with the federal government to solve problems. Perhaps he can get the federal government to work on those problems.
Some of the problems include a built-in conflict of interest where grain companies like their products to be shipped to the grain terminals they own in Vancouver. The grain terminal up here is owned by several grain companies together. There isn't a natural incentive to send product to a facility that you may only have a 15 percent interest in when you can send it to a facility that you have a 100 percent interest in.
Also, freight rates don't really make economic sense. In fact, the shipping rates to Prince Rupert are higher than to Vancouver, but it actually costs CNR more to take its product to Vancouver because they have to add extra engines to deal with the severe grades. Whereas essentially, as you say, it's flat all the way from the Alberta border to here.
It should make a lot more sense to ship your product here, where you can get it turned around right away. There's a huge harbour out there. It's the third-deepest natural harbour in the world, and there's lots of room. Ships don't have to wait.
We have a coal terminal here. There are problems with shipping coal, but it's the most modern coal terminal in the world, and the grain elevator is one of the most modern.
B. Lekstrom (Chair): Well, Mr. Silversides, again, I would like to thank you for your presentation to our committee this evening.
Our next presenter this evening is Victor Prystay. Good evening.
V. Prystay: Good evening. Thank you for affording me this opportunity, on behalf of the Prince Rupert Economic Development Commission, to address your prebudget tour.
The Prince Rupert Economic Development Commission is committed to creating opportunities, building partnerships and encouraging cooperation with all groups as we foster job creation, wealth generation, job creation, economic prosperity, job creation, enhanced quality of life and, as I think I mentioned, job creation.
In the last ten years there have been too many jobs lost and too few jobs created in the northwest. Of those new jobs created, too many are entry-level service and too few are well-paid and perceived to be permanent. The challenge, then, is to develop an economy that creates new jobs, fair-paid jobs, sustainable permanent jobs.
To that end, we're pleased with the provincial government's approach to tax reduction, which will ensure that the province is competitive relative to other provinces and our U.S. neighbours. It's a great start.
Unfortunately, tax reduction is no solution for the unemployed. Tax reduction will have the desired positive effect in the lower mainland, where the critical mass of population of employed people can fire up the consumer spending that drives that economy. Beyond Hope, in the traditional resource-based areas, where populations are small and unemployment is high, we need jobs so we can pay sales tax, income taxes and property taxes. Believe it or not, we'd like to be able to do that. Keeping this in mind, there are a number of steps this government can take that we believe will benefit the entire province.
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Alberta and Ontario's tax-cutting programs were accomplished in very favourable economic environments. Who could have predicted in early, or even late, 2000 that the U.S. and the worldwide economies would so suddenly go into the tank? Who would have predicted the shameful events of September 11 that have exacerbated the problem?
Given this current economic downturn, where government revenues are declining, especially in the forest sector, government must focus on investing in revenue-generating strategies. It can be shown that economic development offers the best financial returns to the public. Some of these strategies may require investment, whether by government or through public-private partnerships, whereas there are others that require no investment, only action — the stroke of a pen.
A local example of the latter is aquaculture. There's a considerable amount of private investment on hold because of the aquaculture moratorium which targets the north coast. Prince Rupert wants to position itself as a northern service centre for this industry. Just think of the tax revenue available to the province with the creation of 500 full-time processing jobs in Prince Rupert. Just think of the tax revenue generated by another 1,000 new full-time jobs to support the industry in feed production, equipment manufacturing, distribution, transportation, education and training, to name just a few.
Lifting the moratorium is not enough. The province must streamline the permitting process to ensure timely approvals. The province has an opportunity to encourage new private investment by reducing red tape. The commission is in the process of developing a comprehensive strategy to ensure the port city of Prince Rupert maximizes the spinoff potential of this exciting industry, but we need government to work with us by lifting the moratorium and cutting red tape.
Oil and gas. The environmental safety of exploiting oil and gas has been studied to death. This week we saw the release of another report that confirms this industry could move forward without significant environmental risk. The province should lift this moratorium immediately and put the environmental assessment process in motion. Offshore oil and gas revenues flowing back to the province are estimated in terms of billions of dollars annually, and local job creation would be considerable.
Treaty resolution. This province must accelerate the treaty resolution process. Uncertainty around treaty issues is stifling investment in Prince Rupert and in British Columbia in general. Certainty would create a positive investment climate, which would in turn generate enhanced provincial tax revenues and create jobs locally.
Forestry is a major issue at this time, especially with the softwood lumber issue that's killing jobs and investment provincewide. We commend the government on your work to date on this issue and hope it will be quickly resolved. Forestry is absolutely vital to our community, so any measures that enhance or maintain this sector will in turn generate significant tax revenue. The sector is facing huge challenges: softwood lumber tariffs, tenure reform and the development of the value-added sector, to name but a few. Given these challenges facing the system, it is imperative that our district office not be faced with budget cuts at this time.
Land tenure reform must ensure that local communities are the major benefactors of forest harvesting. Currently, a great deal of lumber cut on the north coast is done through helicopter logging, with minimum stumpage being paid, little or no local purchasing, no processing and little or no job creation. The timber isn't even being scaled in the north. The tax system on tenure reform must address this issue.
Our small business logging program is not working. Small value-added producers are unable to secure a supply of raw material to either maintain or expand their operations. We're also deeply concerned about the LRMP process that pits a large, formal, non-resident environmental lobby — what my friend Mike calls the "bunny-kissing tree-huggers" — against unorganized and grossly underfunded local interests, often to the community's detriment. Local interests are conservationist at heart and are constrained by the facts. Let our communities be masters of our own destinies.
Some other strategies will require investment. Skeena Cellulose. We recognize the considerable amount of time, effort and energy being expended in an attempt to find a private-sector solution for this very important enterprise that impacts not only our community but the entire north coast, and we thank you for it. We understand, too, that government campaigned on a "no bailout of the private sector" solution, and we fully support that platform. We ask, however, that government be open to other solutions, perhaps now fully recognizing the negative impact, both economic and social, that permanent closure of this company would have on the entire northwest.
If government needs a precedent, I was on the Net the other day and noticed that Freightliner had just been moved from Kelowna — 700 jobs and $1 million from the city of Portland, $1.3 million from the state of Oregon, $1 million in tax abatement over five years, $3.6 million in federal tax relief — some $6.9 million real dollars in a system that's supposedly totally free enterprise.
Ladies and gentlemen, I understand that the government is facing some significant financial challenges. I understand, too, that the budget you set now will not only influence this year's spending but will set government's course for its entire mandate. With respect, then, government must show vision and leadership. But then, we all understand that leaders are not paid to make the inevitable happen. Leaders must have courage to think outside the box, beyond the next election, to rethink and perhaps re-evaluate positions and policies that were seen as appropriate in the heat of the campaign or when you were in opposition.
Government must eschew a cookie-cutter approach to the provincial economy. What works for the lower mainland doesn't necessarily work beyond Hope. The upcoming budget must distinguish between capital
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investment and operating expenses, as capital investment builds community capacity and generates a positive return. It's imperative, then, that government not make across-the-board cuts that negatively impact infrastructure. For example, a private business is in serious trouble when it fails to invest in new or replacement capital, because its capacity to generate revenue is compromised. I caution you not to make the same mistake.
We're also deeply concerned that the province is backing away from the federal-provincial infrastructure grants that leverage provincial dollars three to one.
Ladies and gentlemen, rural British Columbia doesn't need fast ferries at $400 million-plus. We do need daily summer ferry service to support our fledgling tourist industry beyond Hope. Rural British Columbia doesn't need a multibillion-dollar rapid transit system or four-lane superhighways. Rural British Columbia does need the infrastructure necessary to facilitate an economy transition from a boom/bust resource-based economy to the new economy that builds on our historic base but is complemented by value-added production and destination tourism.
At this juncture I'd like to bring to your attention a number of infrastructure projects in Prince Rupert that warrant your attention: (1) Northwest Community College, an investment in education with a positive payback that's an ideal public-private partnership; (2) the cruise ship dock, an investment in destination tourism capacity-building that generates a positive rate of return and for which there's a great business plan that I think you may hear about later; (3) the access project, an investment in transportation infrastructure that generates a positive rate of return, both social and economic, for all levels of government; (4) containerization of the port, another investment in infrastructure that would have far-reaching economic consequences through the whole northern corridor and a strategic investment in national security should some catastrophe, like an earthquake, impact the port of Vancouver.
I recognize that these projects require an investment, probably largely by government, but in turn, they create jobs which result in income to government. You know, I think Keynes would approve of such a pump-priming strategy.
Before I finally close, I'd like to share this story with you. A year or so ago I had the opportunity of talking at length with a cabinet minister, who shall remain unnamed, about the state of the economy in the northwest. I was giving what I thought was a reasoned but passionate argument — something like I'm trying to do now — when he stopped me. I'd never before seen such sadness in a man's eyes. He said: "You know, Victor, you have to understand that except for Prince George and west of Prince Rupert, in the Charlottes, and northern Vancouver Island, the rest of the province is in pretty good shape. So when I talk to my colleagues about economic issues up here, they don't care."
I hope I don't ever have to tell a similar story to my children and grandchildren about you and your government. I hope I can say: "They came, they listened, and they cared." Once again, I thank you for affording us this opportunity to provide input.
B. Lekstrom (Chair): Thank you very much, Victor. We do have a couple of questions.
T. Bhullar (Deputy Chair): Victor, speaking for myself and, perhaps, for my colleagues, we do care. That's why we ran for public office.
V. Prystay: I knew that.
T. Bhullar (Deputy Chair): Thank you. My question is this: what do your friends, neighbours, family and the community generally think about offshore oil drilling?
V. Prystay: You're talking to the wrong guy. I was on the task force that raised the profile. I've not spoken to anybody who is against it. Like most of the people, I was born here. I have children and grandchildren here. I don't know anybody who is not a conservationist, and I don't know anybody who wants to see that go forward if it's going to have some kind of detrimental effect on the environment. But everything that I've read and studied on this topic tells me that with the technology we have today, we can go forward with that with marginal, minimal risk.
B. Penner: For the sake of expedience I'll try to wrap three questions into one and speed things up, so maybe make notes while I'm speaking, if you don't mind.
You mentioned Freightliner's proposed move out of Kelowna to Portland. I just note that that hasn't taken place yet. The time line that they've put forward is about 12 months. Ever the optimist, I think that gives us a year, perhaps, to change their minds. I am interested in whether you could tell us where you got your figures about the relocation incentives, otherwise known as subsidies, that were given to them.
V. Prystay: On the Internet.
B. Penner: Let me just finish these other ones first. Second, you mentioned national security. I'm just curious about whether the Canadian Armed Forces has a naval base or any other presence on the north coast. Third, oil and gas exploration. I received an e-mail at my office in Chilliwack this morning from a gentleman who I believe identified himself as living in the Queen Charlottes. He said that he was opposed to oil and gas exploration, at least at this time. His preferred strategy is to wait 50 years until the technology improves and perhaps the price of oil goes up. My question there is: do you think the north coast can wait 50 years for significant economic activity? Those are my three questions.
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V. Prystay: The Freightliner one is on the Internet — www.okanagan.net. It was a piece talking about Freightliner, and I took the figures right off the Net.
National security. What I'm trying to get at there is that Canada has two west coast ports that are connected by rail. I was thinking, after this September 11 thing, when suddenly the whole world seemed to get overturned, that here we are on the north coast with the third-deepest natural harbour in the world — it can take any ship afloat, apparently — and a rail line and minimal infrastructure here.
I'm thinking, what if the unthinkable earthquake happens that everybody's talking about? It's going to take Richmond and dissolve it into mush, and Vancouver Island will suddenly disappear. What is Canada going to do? Are we going to ship all our stuff down through the States? I think it would be an investment in the future of our country for us to develop this northern transportation route. Don has just spoken about its efficiency in terms of the gradient going through.
I think it just makes good business sense. At the same time, I'm talking jobs. We're up here, and we need jobs. My wife works for the career resource centre. She comes home at night, and she's upset. There are people coming there who are looking for work. People want to work. We don't have the critical mass of money or population here to do this on our own. It seems to me that since World War II — it's a population thing, I'm sure — the big urban centres….
I don't want to argue with you. You need the transportation routes. You need the SkyTrain, and you need all those kinds of things. Where did this money come from? It came out of the woods up here; it came out of the fishery; it came out of all of these things. Suddenly we turn around, and we want to cut a tree down. You can't cut trees. You've got a vibrant fishing industry that ten years ago employed 3,000 people seasonally, for fairly long seasons, on the production side. We had 500 seine boats with five persons to a crew, all of whom roamed up and down the coast following the fish. I think now we have something like 100 seine boats that can fish on the north coast. Of those 100 seine boats, most of those people live down below. They come up here, they buy a little fuel, they buy a few groceries, they catch the fish, and then it all goes to Vancouver.
B. Penner: Is there a Canadian naval presence in this area?
V. Prystay: The Coast Guard.
B. Penner: What do you think about waiting for 50 years, like oil and gas?
V. Prystay: Oh, 50 years. Well….
B. Penner: Is there a Canadian naval presence here, like a military base for the Canadian navy?
V. Prystay: No, there's not.
Oil and gas. No, I don't think we should wait 50 years. I am convinced that the technology exists. I'm sure there are people who want to disagree. That's their choice. I think if you want to look at it objectively, if you believe in creating jobs and creating opportunities for the people up here…. I have a 17-year-old, and it just fries me to think that when he graduates and goes off to university, he doesn't have the choice of coming back here, because there's no work. I think there's something wrong with that.
B. Lekstrom (Chair): Victor, we do have one more question.
L. Mayencourt: Okay, Mr. Chair, I'll be real quick.
Victor, we have a policy that when a cell phone rings at the Legislature in one of these meetings, it's five bucks. By my calculation, you owe us ten.
V. Prystay: It's better than buying a round.
L. Mayencourt: I could let you off a little easier. Obviously, many members of the committee would like to hear more about your presentation, and I think we need to move on to the next person. We're here till nine, then I think it takes us half an hour to take this room apart. If you could join us again at that point, I would love to have a conversation with you about some of the things that you've raised.
V. Prystay: Thank you.
B. Lekstrom (Chair): Victor, on behalf of the committee, I'd like to thank you for presenting to our committee this evening. Certainly, you've given us some interesting thoughts.
V. Prystay: I appreciate the opportunity.
B. Lekstrom (Chair): Our next presenter this evening is with the Prince Rupert Community Enrichment Society, Vanessa Bramhill.
V. Bramhill: Actually, I'm here on my own.
B. Lekstrom (Chair): Oh. Okay.
V. Bramhill: I do work for the Prince Rupert Community Enrichment Society, and I think you'll find that my presentation is a lot more brief, kind of to the point.
I work for a community social service program here in Prince Rupert, but I wanted to talk a little bit about how I first became involved with these community social service programs. I'm Vanessa, I'm 30, I'm a single mother, and I have two daughters. I've been living here in B.C. for eight years now. My first involvement with community social service programs came as a client. As a child, my behaviour seemed out of control to the school, my parents, caregivers and eventually even to me. Over the years I saw many, many counsellors, and while they couldn't always take away the
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problems of my life, they started to plant a seed — right?
Anyway, over the years, as things got worse, I was eventually expelled from school at 14 and shipped off to another province to live with my dad. As our relationship fell apart, I was living on and off the streets for a few years in Toronto, in and out of youth hostels and group homes, spending time in detention centres. There was nowhere else for me to go. By the time I was 18, I was ready for something better. I guess I'd grown sick and tired of this feeling of being sick and tired and miserable and alone.
I went off to this amazing treatment centre thing in Ontario. By the time I walked through those doors, just like a lot of the people who walk through the door where I work, I was ready to change — right? A lot of the seeds had been planted along the way. There had been lots of interventions, lots of really neat contact with community social workers.
Anyways, over the years, all of these people who worked with me gave me hope and represented the kind of picture of who I wanted to be as an adult. That picture, of course, included doing the kind of work that I'm doing today. I cannot imagine doing anything else.
I guess what I'm trying to say is that people who walk through the doors of community service agencies already have an idea of what it is they need to do. Today, 13 years later, I'm working full time. I have nine years of experience now working as a front-line worker for a community agency. I also remain active. I'm involved in several boards, and I'm involved in different committees. Last year another community social service worker and I regularly contributed articles to our local paper and wrote many letters to the editor on issues like violence against women in our society, child poverty, parenting, poor-bashing and victim-blaming.
You can see that I'm probably ideologically opposed, maybe, to some of the ideas of the Liberal government. At least, that's my assumption. Today in Prince Rupert, direct services to clients are very lean. It's our feeling that any more cuts will be devastating.
I wanted to say that before I came to this today, I had mentioned to some co-workers and other people in the community that I was going to come. The response I got, overwhelmingly, was that this is a token gesture and that, in fact, you guys have already decided that a lot of these services will be cut. That's just the feeling. I'm not saying that it's right, and I'm not saying that I believe it. That's why I'm here today and not not coming.
I don't know if you guys are aware of it, but there's a real feeling that no matter what people say or do, it's sort of a done deal that you guys are going to make big cuts and the people that probably are going to fare worse are those with the least amount of power: the poor people, the people that access programs like mine, community social service programs.
I don't believe that anybody would argue with the fact that making services more efficient and more accountable financially is a good thing. I agree. Anybody you talk to will say: "Yeah, sure there's fat in the system, and we need to make things more accountable and make better use of our dollars." I really believe that the government is moving way too fast and trying to do too much at a really inopportune time. We're in a recession. While it's true that we need our government to help create prosperity, I don't think prosperity's going to come out of huge cuts to government spending, especially during this recession.
In fairness, I don't think we need to sacrifice social programs to pay for these tax cuts. I'm not convinced that these tax cuts are really going to help anyway. The economy is not doing very well right now, and it seems to me that the people that are definitely going to benefit are the wealthiest people in this province. I don't believe that you slash jobs and worry about fixing the deficit during a recession.
I think you guys need to slow down and revamp your promises. You guys are just going to make things worse. I would suggest maybe you guys could say: "Whoops, we made a mistake. Maybe we acted too hastily." Just back up. I think everybody would understand. That's what I think. You guys are laughing, and maybe you're not convinced. Think about that tonight in your hotel.
Social services have evolved in our society for a reason. I believe that cutting them will only postpone their inevitable reintroduction. Actually, there are some very good arguments out there that community social services in the province are actually very cost-effective and help to save money down the road. For example, placing kids into foster care is expensive, but a support worker at $40,000 who does what I do can support 30 families and make a difference in terms of the amount of intervention necessary and maybe even start to plant those seeds of change that I talked about.
I also believe that another important function of community social service programs is that we often act as equalizers in the sense that we help to level the playing field between people and the many institutions. I think that if the Liberal government goes ahead and makes all those huge cuts, there will be enormous social costs.
Take, for example, violence against women, which is a very serious issue here in the north. Forty percent to 70 percent of all women murdered around the world are murdered at the hands of their intimate partner. In Canada that figure is probably around 40 percent. It's well known that when it comes to spousal homicide, four out of five of the victims are women. In instances where the man is murdered, it's usually in self-defence or whatever. The fact that it's a gender issue is not in dispute, I hope — right? You guys agree?
You weren't listening. I shouldn't be surprised.
B. Lekstrom (Chair): We were listening.
V. Bramhill: Do you guys agree that violence against women is a gender issue? It's got the name, but a lot of people say: "No, it's violence against all people."
Large cuts to social programs are going to result in fewer services and fewer dollars available for women trying to leave abusive relationships. In all likelihood,
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more women will stay in abusive relationships longer. When you look at the cost of this issue, violence against women, in our society in Canada, you're talking billions of dollars in terms of intervention from social services, criminal justice, lost days at work and health care. Billions of dollars.
B.C. is not immune to that. It's a huge issue in B.C. Eliminating resources and services even more by cutting programs and taking away the gains that — also, as an example — unionized female workers have made will also have a dramatic impact on the economy and on the well-being of women and children. Today women in Canada earn, on average, three-quarters of what men do, unless, of course, a woman is lucky enough to be unionized. Unionization is a very important issue for women. It's only when a woman is unionized that she's starting to make something close to what men make.
Today, too, women in Canada are earning less. A lot of single-parent homes are headed by women only. Surprise, surprise, a lot of these families are really poor because the women don't make enough money. So the problems that a lot of us associate with children growing up in single-parent homes are directly related to issues of poverty, not because single-parent homes are inherently bad places to raise children. Children growing up in one-parent families who are not poor are a lot less likely to become statistics.
It's not so much about just having one parent as it's about poverty. I guess that's what I'm trying to get across here. These cuts you guys are talking about are going to really affect people. Like I said, it's going to affect the people with the least amount of power in this society. It's not you guys; it's the people that walk through my door. It's women, children, aboriginal women and people that have fewer resources.
Cutting back the already limited resources available to women and children is going to keep women and children in positions of less power. Poverty has its roots in inequality, and we have a lot of that in B.C. Why can't we look at putting more dollars in the pockets of the people? This is my own thing. I think you guys should just give money back, but maybe I shouldn't say that today.
I don't know if you guys know this, but rich or poor, anybody who lives in an egalitarian society — for example, Sweden or Denmark — will live longer and feel better and happier than his or her counterpart living in a society like the U.S. or Britain that's not as egalitarian, where the differences are more polarized. It would benefit you guys, too, and your children to think about these issues.
Your government says that education and health care are priorities, but poverty causes illiteracy and low birth weight in babies. Higher infant mortality rates are caused by poverty, even in a place like Canada. You're undermining your own assertions that these are things you care about. How could you care about it if you're prepared to make cuts?
This is not the U.S.; Canada is a lot different. I don't think child poverty is acceptable to us. I don't believe that British Columbians will ever accept the kind of polarization that exists between the haves and have-nots in the U.S.
I wanted to say something too. What is the purpose of not cutting education and health care if you're going to undermine the ability of children and individuals to benefit from the services by keeping the poor poor? It seems to me that you're not even prepared to support the very people for whom education and health care are so needed. I guess, too, there's a feeling for me that it's like preaching to the unconverted. I guess with the NDP you sort of felt that people were all kind of on the same page.
The notion that a person is poor or at a vulnerable time in his or her life because of lack of initiative or a good Protestant work ethic is an idea of the past, and I don't think that idea will explain away the inequality.
Anyway, I'm sure that given the current economic climate, you could easily back out of at least some of the promises quite gracefully. I think that everybody would be relieved. We have to hope that you guys are capable of doing that. Our economy here in Prince Rupert is really weak, and a lot of these government service jobs are really in a terrible part, anyways. They bring in lots of dollars. There's lots of people that work for the government and are living in Prince Rupert, and never mind the direct services to clients.
I believe that we deserve decent services and that we have the right to be given a break during hard times. Instead of setting yourself up to have to make apologies later on, I say do the right thing today. Go back to your government, and tell them to hold off on making some of these big cuts to government ministries. I believe that if you believe in the notion of equality and that every human being has inherent value, then you need to minimize these cuts to government programs, specifically community social services, and revamp the budget and promises in a way that reflects those notions of fairness and equality. Like I said, feel free to temper it with fiscal responsibility if you like.
Okay. One last thing I just want to say. The other fellow alluded to it before I got here. He was sort of saying that maybe you guys will be feeling really bad if you make some bad choices — if your government makes too many cuts and really throws this economy for a big loop. I think you guys should think about that.
I didn't read my whole speech, because it's kind of strongly worded, but thanks for listening. I thought you guys would be falling asleep, and really you're just talking to each other, so it's not too bad. You seem to be responsive and kind of caring, so I don't know. Maybe you really aren't going to just go and do whatever you want, and maybe you are listening. I don't know.
B. Lekstrom (Chair): Vanessa, thank you. I think you can be assured that the members of the committee are listening. It's our job to go out and listen to British Columbians, as we indicated at the beginning of the meeting, and compile our report once we have heard from all people. That's what we plan on doing. There are a couple of questions, I believe, if you would be receptive to answering them. I'll begin with Tony.
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T. Bhullar (Deputy Chair): Vanessa, first of all, we are paying attention. You were going a little bit fast there, because I guess you were reading your speech.
V. Bramhill: I was worried that you guys were whispering. I thought you were going to cut me off, actually.
T. Bhullar (Deputy Chair): No. there was just a question I had, and I was checking with a colleague of mine. Second of all, we weren't laughing at anything you were saying or the presentation. I think it was quite good.
My question is with respect to offshore drilling. I guess it's an issue in the community. What are your thoughts? Can you share with us what your neighbours or your friends are saying about offshore drilling?
V. Bramhill: I actually sit on the Prince Rupert Environmental Society. I'm not a scientist or an engineer or whatever. I think that if you could convince people that it was really safe…. I think there's a lot of questions around safety. If you could convince me that it was safe, then perhaps I would think about it. But you'd really have to convince me. I don't think people know if it's even viable. I think they're thinking that some of the stores of stuff would be really hard to put into anything usable. You're talking about the oil that's out there — right? Yeah, people don't even know if it's usable. I guess there's still a lot of testing to be done. Is that what your question was: would I be for it? I'd have to say that you'd have to convince me. That's what I'm saying.
K. Krueger: Thank you, Ms. Bramhill. I want to encourage you to have a look at the Hansard record of the remarks you've just made to the committee, and if you can find the time to read our brochure, our prebudget consultation paper….
V. Bramhill: I have.
K. Krueger: Okay. I'd just like you to compare them, and if you can think of solutions to offer us, that would be helpful. Your written submission would be welcome, as well as your verbal submission.
You said you were going to be more to the point than the presenters before you. I don't know why you thought they weren't to the point.
V. Bramhill: Well, in a real concrete way. Actually, I was really impressed with what they had to say. That's what I meant.
K. Krueger: You spewed out a lot of assumptions about us. We were elected to do a job. Every one of us works really hard at delivering for all our constituents, including all the people of British Columbia. We care every bit as much about people in poverty and abused people and children who have difficulties as you do — every bit. Whether you choose to believe it or not, that's the truth.
V. Bramhill: You guys can convince me — right?
K. Krueger: We would like to see your recommendations. We'd like you to be mindful of realities, including…. If any of your friends lived off their Visa cards to the end of each year and then rolled up all the balances and put them on their house mortgage, it wouldn't be long before they wouldn't have a house or anything else. You just can't live like that.
We're stuck with $3 billion a year in interest that we have to pay on the debts that the previous government rolled out. That's just a fact. Nobody can write it off; we have to pay it off. We can't do that until we stop running up more debt. If everything continued the way it was right now….
You said you were preaching to the unconverted and that that's not the way you ever felt with the NDP. Well, that's because the NDP thought it was okay to keep doing that. They weren't bad people; they just thought it was okay. It isn't. It costs more in interest than we can budget for post-secondary education. You know that education is the way out of poverty for people — right?
V. Bramhill: Let's let everybody access it, is all I'm saying.
K. Krueger: Absolutely. How do we do that? We'd really like you to engage your mind on those things. We'd welcome a further written brief from you.
B. Lekstrom (Chair): Vanessa, we do have one more question. If you have a moment, I'll go to Harry.
H. Bloy: Thank you for your presentation. I believe that all the members of the Legislature, all 79 of them, have the same conscience that you have. I want to take the politics out of it. We care about everybody. I want to tell you that in my home life, my wife works for a non-profit agency, running the ending violence against women program, the family life program. I'm well aware, and I know from talking to all members…. This is a non-partisan committee. Joy MacPhail is a member who couldn't make it today. It is non-partisan. Everything that you say will be brought to the attention of the minister when this report is handed in.
I just wanted to reaffirm to you that we're not ogres or whatever up here. We're here with a real conscience, the same as you are.
V. Bramhill: Thank you. I'm glad I didn't make a protest. I was going to either come topless or go and sing a song. Just joking.
B. Lekstrom (Chair): Jeez, I don't know how to respond that one, Vanessa. [Laughter.]
Vanessa, I thank you. Certainly, what we're hearing right across the province in the presentations is that whichever message is being brought is coming from
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the hearts of British Columbians. I thank you for your presentation.
We will move on to our next presenter this evening, Alanna Johnston.
A. Johnston: Thank you for the opportunity to speak tonight. My name is Alanna Johnston. Prince Rupert has been home to me for almost six years. I chose to come to Prince Rupert because of the friendly, diverse people in this city and the sense of connectedness to the community that's felt here. I've worked in the social services field for over 11 years. I'm a school trustee. I'm an active member of organizations that promote the wellness of all people in Prince Rupert. Wellness is the promotion of a healthy lifestyle in the areas of physical, social, mental and environmental well-being. It is not merely the absence of infirmity, symptoms or disease; it is a state of total well-being.
The most important benefit I receive from working in the social services field is not financial. I get personal satisfaction from a job well done. I know that my job has been done well when the people I work with are able to function and participate in the community independently of the social safety net. The community benefits both directly and indirectly from services that have traditionally been provided by public servants. A direct benefit is a happier, more productive labour force. This leads to increased economic activity in the community. An indirect benefit is increased personal and community wellness.
I'm in favour of the governmentwide core services review, in principle. I believe in responsible, accountable management of public resources and tax dollars. I understand that to meet fiscal goals for the province, there must be reduced government spending or increased government revenues. I am concerned about the short implementation time lines for the changes that the core review of services will bring. I've considered the effects that a provincially standardized cost-benefit analysis of public services will have on this unique community. I fear that the proposed reductions will disproportionately affect those who are least able to speak for themselves.
Prince Rupert is a community in transition. Our economic infrastructure is changing. There are increasing social needs in the community. Our greatest resource is the people who live here. There's a willingness to welcome newcomers to the city, there's optimism on the most dismal rainy days, and there are friendships that span across all social, racial and economic classes. There are indicators that this community's social safety net is in crisis.
Prince Rupert has a high teen pregnancy rate and a higher record of sales of alcohol than the provincial average. There's a large gap between the rich and the poor, and there's a high incidence of ministry involvement in cases of alcohol-related neglect of children. We have lower than desired literacy levels in our schools. These indicators all show that the wellness of our community is in jeopardy.
If the unique nature of this community is not taken into account during the proposed spending cuts, the inequity between the richest and poorest residents of the city will increase. I don't believe that the intent of the government core services review and the proposed 20 to 50 percent cuts was to increase the existing gap between the rich and the poor.
Cost-benefit analysis is a principle that works extremely well for most private businesses when tough economic choices must be made. When the costs and benefits are all monetary, there's little doubt in decision-making. The benefits of publicly provided services cannot be measured in monetary terms. It's easy to measure the costs of public services provided, but it's difficult to measure the benefits of those services. The benefits include personal well-being, increased social justice and increased equity.
Public services may be perceived to be worth more in this isolated community that has few overlapping private services. Public services are aimed at meeting social needs. Private services goals include making a profit. In business, a profit's a good thing. When we're discussing social issues, it's immoral to measure a profit when there's a cost to personal and community wellness. Government most appropriately provides social services. Privatizing services that are traditionally provided publicly will affect the quality of those services.
Government spending cuts must be made, but those choices need to be flexible and community-specific. A change in the process, to remove redundancy and inefficiencies in government spending, is a good thing. Efficiencies of scale can be achieved within the public sector while preserving discretion to find innovative solutions that are a good fit for the unique people in Prince Rupert.
I'm in favour of reviewing every government service to ensure that it's provided in the most cost-effective way possible. I am not in favour of a further reduction in government revenue in the form of further tax cuts, as I believe it will lead to further reduction in the services we provide. I believe that the tax cuts earlier this year had little positive economic impact in Prince Rupert. Further tax cuts will increase the need to reduce government spending at a greater social cost.
I received a small financial benefit from the tax cuts — less than $100 per month of disposable income. I would gladly return that extra income if it meant no cut to publicly provided services. I know that the poorest people in our community do not pay income taxes for reasons of social justice and equity. Some status first nations people who live and work on reserve are not subject to income tax either. There was no increase in income for those people who do not pay income tax. These are the people who will lose the most from the cuts in services.
Those services include alcohol and drug counselling, services for at-risk youth and families, basic social assistance benefits, advocacy and job counselling. With these services, the potential for each individual to contribute to the community financially and socially is
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increased. If these services are reduced, the potential will be lost, and further safety net services will be required.
There is the possible solution of increasing revenue to help with balancing the provincial budget. Increased government revenue generally means increased taxes. Well, I'm not in favour of a large personal tax increase. I think that corporate taxes could be increased. Increasing corporate taxes, though, tends to have the effect of reducing foreign investment in the province.
Once again, are we willing to reduce social services and programs and hurt the most vulnerable people in our society to attract big businesses to our province? These businesses generally do not support our communities. Money spent in large corporations often leaves the community. The top-level executives and workers are transferred from the main corporate headquarters to the local community. There's no increase in employment opportunities for the people in the community.
Alternatively, government could practise careful fiscal policies which would create a multiplier effect. Dollars allocated to public projects go into the pockets of local workers, who spend the money on food, clothing, housing and consumer goods. In turn, workers in those industries spend their wages on additional goods and services. Gradually the government's dollars trickle through the economy.
The multiplier effect holds for all types of budget transactions, whether in the form of tax cuts, direct payments or actual purchases. Provincial income would be increased, which tends to increase the actual amount of revenue that the government receives through taxation.
I'm aware that the government's fiscal policies have already been set and that there will be cuts in public services. I ask that those cuts be carefully examined to determine if there's fairness for all. Those most impacted by the cuts may not be able to explain the impact that the cuts will have on their well-being. I ask that the benefits of each service provided by government be carefully reviewed not just for tangible, quantitative outcomes but to determine if there are invisible benefits, like wellness for our community, that may be lost by cutting the service.
Finally, I ask that the proposed future tax cuts be reviewed to ensure that the small financial benefit of a tax cut is worth the social cost to individual communities.
B. Lekstrom (Chair): Thank you, Alanna, for your presentation this evening. I will look to members of the committee if there are any questions.
T. Bhullar (Deputy Chair): Alanna, this is a question I'm posing to most of the witnesses. It's oil-drilling offshore. It's a topic that's relevant to your community. What are your thoughts on it — and your friends' and neighbours'?
A. Johnston: My personal thoughts are a lot like Vanessa's: convince me. I don't think we've had enough information from both sides. I know that there are people who say, "Yes, let's do it right this second," and there are people who say, "I'm afraid that it's going to cause that big earthquake; I'm afraid that it's going to cause our waters to be polluted."
We need to do a very careful cost-benefit analysis to ensure that the costs that could happen are worth the benefits that we will get from offshore oil-drilling.
B. Lekstrom (Chair): I see no further questions. Alanna, on behalf of the committee, I would like to thank you for presenting to our committee tonight.
Moving along, our next presenter this evening is Susanne Bellefontaine. Good evening and welcome.
S. Bellefontaine: Good evening, and thank you for coming beyond Hope.
I just wrote a short speech, and I'm not going to take much of your time. My name is Susanne, and I'm a taxpayer and a voting member of the community of Prince Rupert. I'm employed as a clerk in the mental health centre here. I would like to make you aware of some of the economic difficulties this community is presently facing and of my concerns regarding the proposed cuts to the public services sector.
Prince Rupert has lost the fishing industry and the logging industry and has recently felt the impact of the closing of the local pulp mill. As well, the proposed new college has been put on hold — a project that might have provided much-needed jobs in this community. There has also been a large number of small businesses which have closed down and some larger franchise chains that have left this area. There are more leaving. The economic outlook at this time in Prince Rupert is not too bright.
With all of these closures and losses, the need for the minimal services that are presently provided is very real. If the proposed cuts to the government services sector go through, there will be many people in the community dependent on the social safety net that these services provide, except that with a 35 percent cut in jobs comes a 35 percent cut in services. How will these people pay for the services they need if they have low-income jobs, no benefits to cover the costs or, worst of all, no jobs at all?
Your government has mandated that teachers are now an essential service so as to ensure that children have their instruction. But would you send these children to school without decent clothes and with empty stomachs? What can they learn if they are hungry? And what if they are sick or need medications? Who will pay for them? What if they were your kids?
Under the guidelines of the core services review, this paper says that the Liberal government's vision is to create a thriving private sector economy that creates high-paying job opportunities. How can this be realized through job layoffs? Isn't this a contradiction? With the proposed cuts to public service, the Liberal government is creating an atmosphere of fear and uncertainty. Many, many people who work in the government services sector are now wondering when, not
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if, their jobs will be cut. They are feeling an axe hanging over their heads. This will directly impact their ability and their will to spend, which will have an enormous impact on the small business communities throughout B.C. People will not be purchasing the big-ticket items. Those who have jobs will be hoarding their money against the time when, not if, their jobs will be gone, and those without jobs won't have money to spend.
I find it ironic that less than two weeks ago I watched President Bush, in a speech from the White House, urging the entire citizenry of the U.S. to get out and spend their money because the economy depends upon it. Yet through workplace insecurity, your government seems to be creating a will not to spend in this province. Surely the people who are most likely to benefit from your 25 percent tax cut will reap no rewards in such an atmosphere of economic uncertainty.
Speaking of the 25 percent tax cut, you may keep mine because it doesn't amount to very much — maybe 20 bucks a month — and most importantly, I don't want to make a little extra money off the backs of the poor. That's my speech.
B. Lekstrom (Chair): Thank you, Susanne. I will just check to see if there are any questions from members of the committee.
Susanne, I'll just throw out one on the issue of tax cuts and what's taken place to date. If we put those aside — and I think it's been said before — the province faces some incredible deficit-financing problems. Excluding the tax cuts, we still face a $3.8 billion deficit by 2003-04.
S. Bellefontaine: It made me wonder why you got rid of photo radar. I know that you say it wasn't a deterrent, but those people were still breaking the law, and it was still an income. Why did you get rid of that?
B. Lekstrom (Chair): I was actually going to ask if you had some ideas.
S. Bellefontaine: Money in the coffers. I mean, I have no problem with photo radar. I've never had a ticket, because I don't speed. People who do speed deserve to get a ticket, because they're speeding.
B. Lekstrom (Chair): Okay. That was before I even asked my question. I just wanted to ask your ideas on how to either generate revenue or cut spending. I think it's going to take both avenues to try and get our financial house back in order.
S. Bellefontaine: And take back the 25 percent cut. I don't need it that much that I want to see people being…. [Applause.]
Regarding the offshore drilling, I don't see a problem with that. The jobs are so needed in this area. I would think that if there's money made off it — large amounts of money; you know, billions of dollars — a certain amount should go directly to this community for the future.
T. Bhullar (Deputy Chair): You mean in the way of jobs or some sort of a royalty?
S. Bellefontaine: No, a fund, a bank account, a trust fund for the future of Prince Rupert, for this community, that the profit-makers will have to give in order to be allowed to drill here. That sort of thing.
T. Bhullar (Deputy Chair): An excellent presentation.
B. Lekstrom (Chair): Thank you, Susanne.
Our next presenter this evening is Vince Arimare. Not here? Okay. We are slightly ahead of schedule, actually. I will move on to see if any of the other presenters that are scheduled for later times in the evening are here and if they would like to come forward. Is Lee Anne Deegan with us? Shaun Stevenson, with the Prince Rupert Port Authority? Is Odd Eidsvik with us? How about Dave McGuigan?
Maybe what we'll do, because we do have a number of presenters to come and we are a little bit ahead of schedule at this time, is to offer a 15-minute recess. Please have a coffee. We will reconvene in 15 minutes and begin our committee hearings again — okay?
The committee recessed from 6:48 p.m. to 7:02 p.m.
[B. Lekstrom in the chair.]
B. Lekstrom (Chair): I will call our meeting back to order at this time.
I will call our next presenter, Vince Arimare.
V. Arimare: Good evening. I guess you know you're the big event in town and probably the biggest in a long time.
With that, I'd like to welcome you to Prince Rupert and would like to thank you for making Prince Rupert one of your stops so that we can be heard. God knows we have a lot to say, and I'm sure there's probably a lot more that people aren't saying.
My name is Vince Arimare. I've lived in Prince Rupert since 1972. I have a connection to your panel: Mr. Barry Penner. Barry was born in Kitimat, I believe, and they kicked us both out, actually.
I'm a small business man. I'm in the paving business. I started my business with a shovel and wheelbarrow. Several years ago I sold out to a major conglomerate, and I am now part of the largest paving company in the world — right here in Prince Rupert.
I am here tonight to give you just two of my thoughts. There are a lot of things I would like to have said, and I'm sure that others are saying them. I'm converted. I believe in what your government is doing. I believe in the tax breaks. I believe in the road that you are taking. I do caution you to be sensitive. We have been under a different lifestyle and philosophy for ten
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years, and I think you can't blame people for bucking the change. Change is inevitable, and I'm behind you 100 percent.
I have just two things that I'd like to say here tonight. One of them has to do with federal funding or federal relationships. I believe our past government, the NDP, did a poor job of dealing with the federal government, costing our province millions of dollars in transfer payments. I believe that today, as a result of ten years of those poor dealings, we are now seeing the effects.
When we talk about the funds we need for health care, it is in large part the effect of federal funding that we don't have. Today we don't have infrastructure-building, which has to do with roads, bridges, buildings, hospitals and schools, because of the lack of funding or because we haven't been receiving our fair share of funding from the federal government.
I think that needs to change. I urge your government to put in place immediately a group, a committee — I hate to use the word "committee" — to work with Ottawa, to lobby Ottawa, to get to know them, to be their friends and to gain our fair share of transfer payments. I think that would help B.C. gain some of the prominence we enjoyed years ago in terms of education, health and welfare and roads and infrastructure.
The second comment I have is about our relationship with the U.S.A. Living in Prince Rupert I'm far removed from the United States — I guess I can say that — from the 49th parallel, but we are close to them in the form of Alaska. We deal with the U.S., or Alaskans, as one of us. We do have a tie there. They do make Prince Rupert their northern terminus.
I believe that the policies of our previous government, the NDP government, for the past ten years did nothing at all to better or maintain a good relationship with our biggest trading partner — not the U.S.A. but a trading partner. I believe we need to recognize them. I believe we have to send a strong message. Our B.C. government, not the federal government, needs to send them a strong message that we not only want to maintain our relationships, but we want to improve our relationships.
That's something we have to do right away in light of what happened on September 11 and in light of the softwood lumber agreement. I think that is critical to the province. I'm sure you all know, as do the rest of the people in this room, that lumber is B.C.'s major producer. Without lumber, at this point we're just not going to have the economy that we've enjoyed in past years.
With that, I'd like to again thank you for having given me the opportunity to speak to you tonight. I think it's a great process, regardless of what political party or leanings or stripes you're in. For Prince Rupertites to be in the same room, expressing our views and being heard by the government of the day is something I've always believed in. I thank you very much for having given the opportunity.
With that, do you have any questions?
B. Lekstrom (Chair): Thank you very much, Vince. We do have some, I believe.
T. Bhullar (Deputy Chair): I guess it's becoming a standard question I'm asking presenters. Vince, what are your thoughts on offshore oil-drilling?
V. Arimare: My thoughts on offshore oil and gas are the same as the thoughts I have on everything else: if you don't study it, if you don't nurture it, you're not going to know what the real effects of something are. With oil and gas, as long as we've got a moratorium, there isn't going to be anybody to pick up the ball to do the kind of analysis and scientific research that is required to tell us whether this is going to be safe in the future for us. We need to have a lifting of the moratorium so that the studies can be done.
I think this is something that a lot of people don't realize. We're not going to be out drilling for oil tomorrow. I think that's what most people believe — that the minute the moratorium is lifted, we're going to be drilling. I don't believe that's going to happen, whether the government or Prince Rupert wants it or not.
I think the industry itself is going to see if it's feasible for them. Certainly, the industries involved in oil exploration or the gas business have done a fairly good job over the last 90 years of protecting their interests worldwide, and I think they will be doing the same thing here on the north coast of British Columbia. Nobody likes to see disasters.
I do have one comment on oil and gas. We're seeing oil and gas being drilled in Mexico. We're seeing oil and gas being drilled in the Middle East. You've got to ask yourself what sort of checks and balances we have. What checks and balances does Mexico or the Middle East have that we don't have? Who would you rather trust in the global economy or the global environment: a Canadian company drilling for oil…? Or would you think that Mexico or the Middle East is doing a better job than we could do of looking for gas? In other words, I'm a supporter, given the technology that's required to get it out of the ground.
B. Penner: I think that was a very astute presentation. I think that not just because we were both born in the northwest here — in Kitimat, no less. I'm thinking maybe we should put you on retainer as a diplomatic adviser, because I do really strongly concur with your outward vision in terms of British Columbia's place in North America. It's very easy for us, during difficult times, to get caught up with our domestic problems and be distracted from thinking long term, proactively about where we want to position ourselves down the road.
I've been appointed by the Premier to head up something called the Pacific NorthWest Economic Region, at least in terms of British Columbia's participation. That is an organization that includes the provinces of B.C. and Alberta, the Yukon and five states, including Alaska, Washington State, Idaho, Oregon and Montana.
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Bill Belsey is also an MLA representative to PNWER, and I know he's made some contacts already with legislators in Alaska, trying to build a personal relationship so that when there are problems, he can pick up the phone and he knows the person he's talking to. I think just about everyone can agree that it's easier to solve problems when you're dealing with people who already know you than to pick up the phone and try to form a relationship in the middle of a crisis.
That's very good advice, to be outward-looking, because this economic downturn post–September 11 will pass. The question is: will British Columbia be positioned to take advantage of the next economic boom which I trust is coming to North America? We missed the last one. The biggest economic boom of the twentieth century passed British Columbia by. I'm determined to do what I can, along with my colleagues here, to position British Columbia and build a good relationship outside of our borders so people think about British Columbia again as a place where they want to be, invest and create jobs.
V. Arimare: Great. When do you want to start sending me the retainer?
B. Lekstrom (Chair): We do have one more question, Vince.
L. Mayencourt: All of us resist change as much as we can. It's just a natural kind of thing. I appreciate your comments on that.
What seems to be really important to people here in Prince Rupert is that they need some jobs. One of the other areas that's been mentioned is aquaculture. I'd like to know what you think about fish farming here.
Also, I'm having a hard time understanding why your port, which is two days closer to China than Vancouver, has trucks taking lumber down the road, 60 miles from here, going to Vancouver to be shipped. What's going on? Why is the port not working?
What do you think about aquaculture?
V. Arimare: I'm going to get a big retainer.
I'm not sure. I said there were a lot of areas that I could have talked about, a lot of issues. One of them, foremost, is jobs today. Our community is hurting. I certainly don't want to simplify that, but we are hurting. Just about anything right now would help for the short term. I guess I looked at the long term and suggested two points there.
Aquaculture, in my estimation, is on the same level as oil and gas. I believe it would be a good thing. We have lots of water, and it's natural that you put fish farms close to Prince Rupert instead of Vegreville, Alberta. I'm not a fisherman. I guess once we've done the science behind it and once we've ascertained that fish farming — I think they've done it to a certain degree already — is not going to negatively impact on wild stock, I would say let's do it. I think we have miles and miles of coastline.
We look at other countries, like Norway. We look at places where they are already fish farming in much smaller areas of water. If you put those areas in and around British Columbia, they would get lost. Why are we concerned? We've got miles and miles of coastline that are some of the best breeding grounds for fish stock in the world. I think that's a winner not only for the Prince Rupert area but B.C. That's my personal view.
I just want to add one thing here. I'm sure you people know that our area is made up largely of aboriginals. For the north coast aboriginals, fishing has been their basic way of life for many years. If I had to make a suggestion to you people, if you wanted some answers or some advice on aquaculture, go into the aboriginal communities. Maybe make up a smaller group and go see them.
I think they're like you and me. They want opportunities. They want to be self-sufficient. They care about their communities, and they want to be involved. Give them the same opportunities as you've given us here in Prince Rupert today. I think that on aquaculture and oil and gas, they probably have the same concerns as we do. They're also realists, and they know that you've got to eat and you've got to sustain a family. That goes part and parcel with having a good community. I think that would be good for our area, yes.
B. Lekstrom (Chair): Vince, it's interesting. When we talk about aquaculture, we had an excellent presentation last night in Port McNeill regarding aquaculture. Some of the numbers that were put to us were that in B.C., we produce 55,000 tonnes of farmed fish right now, and Norway, for instance, is 500,000 tonnes. The list goes down to Chile at 400,000 tonnes and Scotland at 140,000 tonnes. It's quite amazing, some of the statistics that come out and the possible opportunities there in the aquaculture sector.
As was said earlier, jobs are important to the economic well-being of the province, to the sustainability of communities, if we can look at things like this to try and develop a sector in an environmentally sensitive manner. The science has to be there, and I think everybody agrees with that. It's probably one of the biggest issues we face. We're all environmentalists. It's the extreme elements in any sector that we have to caution ourselves against. If we can do some things and get people back to work, that's the job of government. We'll try and do what we can.
I thank you for your comments.
V. Arimare: Thank you very much, and again, welcome to Prince Rupert.
B. Lekstrom (Chair): We will move on to our next presenter. Is Lee Anne Deegan with us? Good evening, Lee Anne.
L. Deegan: I'm a little bit nervous. It's not something I'm accustomed to doing.
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Good evening, committee members. I appreciate this opportunity to express my views on the forecasted fiscal changes by this government. I am torn by the myriad of problems that I wish to bring to the attention of this committee.
I am very concerned about the future of services here in Prince Rupert. Like many in this community, I am worried about the families who have already experienced grave financial losses, whether they have been recently laid off or had to close their businesses. So many people are leaving Prince Rupert, and so many are losing so much of what they have worked so hard to gain. You only need to drive down a couple of streets here to see the story told in "For Sale" signs and empty shop windows.
I'm a single parent with two children in elementary school. I am a social worker in the employ of a non-profit organization here in the northwest. I work with some of the most vulnerable adults: people who have been diagnosed with severe and persistent mental illness. If these forecasted fiscal cuts and freezes are enacted, every area of my life, personal and professional, will be impacted.
Services in this northern city — and I can safely generalize this to the entire northwestern region — from proper in-patient treatment to supported living are already severely restrained or nonexistent. West of Prince George, over 700 kilometres from here, there are no in-patient services for youth, despite desperate need. It is the same again for general youth and adult population in-patient addiction treatment and detox.
There are no forensic mental health clinicians for either population. Here in Prince Rupert we have no licensed residential treatment or step-down housing for individuals who are not able to live independently or who need time after being discharged from in-patient or residential treatment in order to facilitate their successful transition to independence.
I see some of my clients in living conditions that one would expect to find in underdeveloped countries. They have no cooking facilities, they have infested bedding and/or they are victimized by their hosts and acquaintances, who often take their money or food or compromise them physically and perhaps sexually — that is, if they are fortunate enough to have a roof over their heads, because too many have spent nights on the street this year.
Several of my clients are too afraid of the consequences to ask for help from agencies, which in recent years have increasingly come under pressure to prioritize risk management and budgets over quality of service.
I have seen parents with major mental illness lose their children during acute phases of their disorder, not because they beat, starved or otherwise harmed their children but simply because no support services were available to bolster their care and mediate concerns for neglect. Their families might have been rescued from this heartbreak if they had been offered supports in their homes and the community.
It is a vicious cycle. They are ill, and their illness makes it difficult for them to take care of their loved ones, so their children are taken from them. They become more ill, because they are devastated by the loss of their children, and their illness makes it difficult for them to meet the demands of the agency protecting their children from them.
In the year and a half I have been practising in Prince Rupert, I have witnessed individuals discharged from in-patient facilities without adequate treatment and supports. This is not for lack of effort. My agency and most of the other agencies are all overburdened by chronic understaffing, inadequate support services and seemingly implacable bureaucracy as we attempt to ensure the safety and well-being of these individuals, their families and the community.
It is a well-known fact that staff turnover is very high in the north. Let's face it. Recruitment has become a lot harder in the last few years. Job insecurity, dissatisfaction with working conditions, high cost of living, eroded and inadequate services, lack of educational opportunity and isolation all force energetic and qualified people to leave our community and serve as disincentives in the efforts to recruit qualified professionals to replace them.
In the midst of restructuring, results accountability and fiscal reality rhetoric, demands for services aren't dimming. It seems that the only visible outcome of previous rounds of cutbacks in restructuring has been increased difficulty in getting much-needed services. I know my clients are getting fewer of their basic needs met and lower quality care, and I know this doesn't benefit them. It exacerbates their illnesses, decreases their chances for recovery and full participation in their community and costs us all a whole lot more in the long run.
Respectfully, committee members, as representatives of and messengers to this government, please ask this government to consider its actions carefully. Will their core review answer these questions? When these reviews are completed and the cuts have been made, will vulnerable populations be worse off? Will people with severe and persistent mental illness get better service? Will professionals still be able to afford to live and work in the north? Will giving no money to or taking money away from important services and supports and/or restructuring services make things better for communities in the north?
If they can't answer these types of questions with quantifiable certainty and forecast benefit for all, they will be foolhardy not to reconsider their course of action. After all, it is not just figures on paper and sums of money we are speculating on here. It is our neighbours, children, grandparents and so on who may already or in the near future depend on these services. I know I will gladly forgo my benefit from a tax cut if funding for services for my clients and my family and this community will be preserved and restored. Thank you for your time.
B. Lekstrom (Chair): Thank you, Lee Anne, for your presentation to our committee this evening. I will look to members of the committee for questions.
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L. Mayencourt: I think that the questions you are asking here, in terms of what the core review is looking at, are asking us to make sure that we value the social and human…. Those are important things to be looking at. I want to assure you that they are part of the core review process. What we've been learning as we go around is that we spend billions of dollars, yet the system doesn't seem to be working. We're trying to find a way to make it work. Within your agency, do you do contracts with the provincial government? You're working for an agency that helps people with mental…
L. Deegan: We're a non-profit society that is contracted by the government to provide that service, yes.
L. Mayencourt: You say in here that you're understaffed and that you've got all sorts of things you've got to deal with. You mentioned the implacable bureaucracy. What do you mean there?
L. Deegan: There are several problems. It's primarily interagency. This is not just limited to government agencies. It's also the non-profit agencies that are involved in working with clients.
L. Mayencourt: I worked for awhile in the downtown east side, so I think I know what you mean. Nobody's getting along.
L. Deegan: It's not so much getting along. It's sharing information and providing the services that people with disabilities should be given without hesitation. It's a lot of work. I'm a mental health clinician. You wouldn't believe how many hours a week I spend fighting with Human Resources to get funding for clients for crisis needs, whether it's a bed or clothing. It's unbelievable.
L. Mayencourt: I just want to point out that we split up the Health ministry into four different areas. One of those is a minister responsible for mental health issues. He's a very compassionate guy. If there are things that you think we could do better in terms of delivering services within your community — it would probably work in other areas too — you could share those with us.
L. Deegan: I think, though, I'm a very good example of a result of previous restructuring. They downsized, got rid of the adult section of the Ministry of Health and gave it over to a non-profit. Where I'm now sitting with a BSW, there used to be an MSW. There are no MSWs in the region, I believe. I'm pretty sure I'm right. There might be one in Smithers. We aren't able to attract qualified people. We don't have the money to pay them, and we don't have the security to offer them.
T. Bhullar (Deputy Chair): I have a couple of questions, and one will be the standard one. I'll go first with another question. Have you been consulted on the core services review in any way?
L. Deegan: Consulted? I don't understand.
T. Bhullar (Deputy Chair): Has anyone asked you about the core services?
L. Deegan: Other than providing me with the information and letting me know in the package I received in the mail? I don't quite understand.
T. Bhullar (Deputy Chair): Yes. Did you receive anything from us?
L. Deegan: Yes, I did. From this group? Yes.
T. Bhullar (Deputy Chair): Not from this group, from those that are above you.
L. Deegan: No. You mean, in my agency?
T. Bhullar (Deputy Chair): Yes.
L. Deegan: No, I'm here as a citizen. I'm not representing anyone in particular.
T. Bhullar (Deputy Chair): No, I'm not saying "representing." Has anyone consulted you — that's what I'm saying — from within the bureaucracy?
B. Lekstrom (Chair): We're involved in a core services review with government. Has anybody asked for your input on that review?
L. Deegan: Other than this, no.
T. Bhullar (Deputy Chair): My second question is: what are your thoughts on offshore oil drilling?
L. Deegan: I'm really not qualified to give an answer there. For sure, I weigh heavily on the side of environmental impact, and I want experts answering the questions, not politicians. I think that answers it.
B. Lekstrom (Chair): Lee Anne, on behalf of the committee, I would like to thank you for making your presentation to our committee this evening.
I will call on our next presenter this evening, Shaun Stevenson, who is with the Prince Rupert Port Authority.
S. Stevenson: Thank you very much for the opportunity to speak before you.
I guess what I'd like to bring you up to speed with a bit is the situation the port authority is facing at the moment — some of our own challenges. In addition, there are some things on the horizon that could turn around the port for not just the local community but for the whole region and province.
The port of Prince Rupert has a unique position in that it had some very specific strategic advantages that make it an integral part of a national transportation system. Whether you look at our location on the Inside Passage or our location on the northwest transportation corridor, it really reflects some opportunities that are
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unique for British Columbia and also for Canada. The barrier to fostering a lot of the growth and development to the port and attracting some of the new industries is really a lack of infrastructure at this point.
Just to give you a little background on the port, we are traditionally within the top five ports in Canada. We are somewhat in the shadow of Vancouver at times, but we play an integral role in the movement of coal, forest products, grain and some other things. We currently have three main facilities. One is Prince Rupert Grain, which is a tenant of the port authority on Ridley Island; Ridley Terminals, which is a coal port; and Fairview Terminal, which is a break bulk and general cargos facility.
All of these have had their challenges over the last five years — certainly, in the last three years. All of them are served by Canadian National with the CN main line. We've got one of the most efficient and effective rail connections to the U.S. Midwest. In fact, Prince Rupert is located on the shortest land-sea route between Asian markets and the U.S. Midwest. Beyond that, Prince Rupert is the second-deepest natural harbour in the world.
We have some efficiencies as a safe port when you look at some of the risk factors on the west coast. We are the closest to shipping lanes, providing for some speed in turning around vessels. All of those advantages create a real opportunity for British Columbia as well as Canada, for that matter.
Just to give you an idea of our current situation, if you look back to 1997, we handled a total of 13 million tonnes of cargo. This year we will handle somewhere around 5.5 million. Essentially, we've had a 70 percent decline in our traffic, and that's mainly due to globalization. We've had a dependency on commodities such as coal, forest products and grain. Virtually all of those commodities have either been hit in the global marketplace price-wise, or we've seen declines in production and so forth.
In addition to that, we've seen some shifts in the mode of transportation towards containerization, so cargoes such as forest products, wood pulp, specialty grains — what used to be shipped in a break bulk format — are now being moved in containers. Together that's created a scenario where the port is handling less than half the traffic it was three years ago.
The future is going to be very challenging unless we see some fundamental shifts in our core business. That's not to say coal, grain or forest products aren't going to remain a big part of the future in the port of Prince Rupert, but certainly, we're going to have to shift into new industries and new modes of transportation if we're going to be successful.
One of the main challenges we have as a port authority now is the development and financing of infrastructure. In order to position Prince Rupert as a key strategic gateway in the northwest transportation corridor in British Columbia and the rest of Canada, we're going to need to have some fundamental investments in infrastructure that shift the business we're in.
That's not to say that everything is bleak. There are three opportunities that create some hope for the port, I guess, and for the northwest transportation corridor. One opportunity right before us is the development of the cruise industry. Each year over 600,000 cruise passengers sail right past Prince Rupert. The majority of the vessels that those passengers are on are home-ported in Vancouver, but Seattle is now coming on as a home port for the Alaska cruise trade. The lack of infrastructure is the single reason why we are not able to accommodate and grow a flourishing cruise business in Prince Rupert.
This isn't limited to a Prince Rupert issue. This is something that could create an incredible economic development opportunity and impact throughout the whole northwest. Through discussions with the cruise lines, we have got to a point where there's interest. We have a plan for infrastructure. We have one line that has already committed to come into Prince Rupert should we have infrastructure in place for 2003. It is one opportunity that's right before us.
The second opportunity is in containerization. Clearly, with the shifts in the mode of shipping that we're seeing with forest products, specialty grains, value-added products, manufacturing and so forth, the trend toward containerized cargoes has not just eroded the port's traditional break bulk business. It is growing at such a rate that ports like Vancouver are already at capacity and are meeting three-year growth projections that they were expecting to reach at year 10, I believe.
That opportunity really stems from Prince Rupert's location on the shortest land-sea route between the U.S. Midwest and Asian markets. Again, it comes back to infrastructure. Currently, we have a break bulk terminal that would require probably $40 million to $50 million of investment in order to be able to accommodate containerized cargoes.
The other opportunity we have is the attraction of new industries onto Ridley Island, the port's heavy industrial development property. I have to give your government full credit for creating an already improved investment climate in British Columbia, because even in Prince Rupert we are totally dependent on how attractive B.C. and Canada are as investments. We have already seen some activity — certainly just interest at this point — in the Ridley Island industrial site from some of the proponents that had held off for the last five years due to some uncertainties as to whether B.C. was an attractive place to invest in.
Just to give you an idea of the impacts of these three opportunities, the cruise industry in Ketchikan, Alaska, which is 50 miles north of Prince Rupert and has approximately 10,000 people, has traditionally had the forest industry and commercial fishing. About three or four years ago, I believe, their pulp mill shut down. Ketchikan, Alaska now sees 600,000 cruise passengers a season, within a five-month envelope through the summer. That equates to a $100 million industry, not for the State of Alaska but for Ketchikan. The opportunity is incredible. I don't have any delusions that Prince Rupert would see 600,000 passengers
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a season, but I think it's fairly realistic to have an outlook of 150,000 cruise passengers a season. That would essentially be three ships a week.
I think it's important to note when we talk about investments in infrastructure that in both cases there is not a business case for the private sector to take this on. I think that we have to keep in mind that government does have a role in infrastructure, especially infrastructure promoting economic development. With the cruise project, we currently have a submission under review with the provincial government, with Minister Thorpe's office, for some participation by the province with the Canada-B.C. Infrastructure program.
Similarly, with the container project, we will be looking for some participation of the provincial government down the road, whether it's through B.C. Transportation Financing Authority or some other avenue. In both cases, there is a sound business case for the province to be involved in the infrastructure projects. With the cruise industry, the provincial and federal governments would be looking at an annual return of approximately $2 million in tax revenues.
These are incremental tax revenues that have been generated through the development of the cruise industry in Prince Rupert. This equates to about a 15 percent rate of return on the portion of the project where we're looking for provincial involvement. At this present day, I don't think there are too many investments out there where you're going to be gaining a 15 percent rate of return.
Having touched upon most of the projects and the bleak situation the port is facing, I urge the provincial government to keep in mind that beyond creating a favourable investment climate, there is a role for the provincial government to play in infrastructure, especially infrastructure that fosters economic development and capitalizes on the favourable investment climate you're creating.
Similarly, in looking at the Canada-B.C. Infrastructure program and some of the other federal-provincial partnerships, I would urge you not to throw away 30-cent dollars. This money is leveraged against federal funds that have been allocated to British Columbia for infrastructure, as well as private sector matching funds. Essentially, you're getting tremendous leverage on your dollar, and on your investment, you're going to gain a 15 percent rate of return. I urge you to keep infrastructure in mind with your expenditure plans.
B. Lekstrom (Chair): Thank you, Shaun, for your presentation this evening.
We do have a number of questions, I believe. I'll begin with Lorne.
L. Mayencourt: I want to focus on your container terminal or whatever. You say it's about $40 or $50 million. I assume you've done some sort of a business plan around that.
S. Stevenson: We've done a market assessment to determine where we would fit as a niche container port.
L. Mayencourt: The port of Vancouver is in my riding, and you're right. They're at capacity. They're telling us they need more money to build something more. I look out here, and it just burns me. Why isn't this happening? Anyway, why do you say you don't see private business or the private sector in it? You said that it has to be the government. Why do you say that?
S. Stevenson: In the container model, certainly not entirely the government, but there may be a role to play — say, the B.C. Transportation Financing Authority, where they would finance a portion of the project. The payback would be, say, on a per container basis. It's certainly not, in that scenario, a grant or a donation to the Prince Rupert container port but rather a participation in financing.
One of the challenges the Prince Rupert Port Authority and all Canadian port authorities have now is financing infrastructure and investment in new facilities. We have some limits to how far we can go, based upon our assets and so forth. When you start talking about converting Fairview Terminal in part to a container facility, we certainly wouldn't be able to take that on, on our own. We'd have to get fairly creative in the way we could finance it with the new Canada Marine Act.
In that case, we would look at some provincial involvement in that project in the form of a loan to put in place appropriate equipment and infrastructure for being able to handle containers. The difference with Vancouver at this point, I guess, is that we're not talking about expanding a berth or a new facility. We're talking about simply equipment and infrastructure at a terminal that exists already.
L. Mayencourt: Can the rail lines that come here accommodate the containers?
S. Stevenson: Right now there's approximately $10 million of work that CN would have to do to allow double stacking through a number of tunnels. That, in the scheme of things, is not a barrier. CN is very much supportive of this venture and is exploring it with us. There's some small amount of work that the railway would have to do, but the main issue is infrastructure at tidewater.
T. Bhullar (Deputy Chair): My standard question, Shaun, is on offshore oil and drilling. Can you comment on it?
S. Stevenson: I think offshore oil and gas exploration and development would provide a tremendous opportunity to Prince Rupert and the northwest. Certainly, I think any local will attest that it needs to be done safely, but I believe that the technology that's been demonstrated on the east coast and elsewhere in the world suggests that it can be. Certainly, the economic development opportunities would be incredible.
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B. Penner: I just have one question. I think I have the name right. Where's Don Krusel these days?
S. Stevenson: Well, Don's at the northwest transportation corridor conference, where they're discussing things very similar to those I brought up: containerization, some shifts in the mode of transport and so forth, among other issues involving transportation.
B. Penner: He's still the president — is it? — of the port authority?
S. Stevenson: Yes.
K. Krueger: We were invited aboard the first of many cruise ships to dock at Ogden Point in Victoria. A new line was starting, and there were a lot of representatives of the industry there. One of the things they told us as they toured us through the ship and discussed the industry was that their passengers like to have land activities to do, a cruise to somewhere and then head overland. It works out really well for them.
I live in Kamloops, and when I first came there in '88, everybody at the chamber of commerce was always trying to find ways to get people to spend a night in Kamloops instead of just passing through. Along came the Great Canadian Railtour company. We had Via Rail running its trains through the mountains at night when people couldn't see them and, of course, losing money. They didn't want to provide the service anymore.
An entrepreneur comes along and runs them in daylight and stops overnight in Kamloops — 40,000 hotel nights a year for our city. I wondered about the potential for cruise ships letting people off onto the rail line and passenger trains taking them the route back to Vancouver or something like that. They could do it the opposite way at the same time. Has that been explored at all?
S. Stevenson: Yeah, absolutely. Even the port has done a number of feasibility studies and market assessments to see if there would be a good tie-in. We handle small cruise vessels of 150 passengers and less. We have a brand-new small-ship cruise facility that we've recently completed. The idea of a rail-cruise circle tour through British Columbia holds tremendous potential. Then also if you look at the prospects with the larger vessels….
We did a test about three years ago. We had the Norwegian Wind in. The port took it upon themselves to charter Via's equipment, because they didn't seem interested in doing it on their own, and we ran a rail excursion to Terrace and back to tie in as a shore excursion product for them.
What that did was a couple of things. It provided an excellent shore excursion opportunity to make Prince Rupert a desirable cruise port. It also incorporated the whole northwest into a cruise call and showcased the whole Skeena valley. It took passengers up to Terrace, where they got to explore Terrace, and back.
When I talk about developing the cruise industry in Prince Rupert, it's really in the northwest. With the possibilities of excursions like that or pre- and post-tours with the small ships, whether it be all the way to Prince George on Via Rail and then south, maybe on the new Whistler Northwind, there are tremendous opportunities.
If you look at what Prince Rupert has to offer, compared to a lot of the Alaskan ports that have had the cruise lines calling upon them for the last 15 to 20 years, we have more in its raw form and even more that's developed and polished, at this point, than a lot of them had up until maybe a few years ago. A lot of them are landlocked and have some real limitations on what they can do. Plus we've got Prince Rupert. It's got an incredible history. We've got incredible first nations communities in the area. It all adds up to being very attractive to a lot of the cruise lines. Was it an RCI you were on in Victoria?
K. Krueger: I don't remember the name of it. I thought it was Royal Viking.
S. Stevenson: Okay.
What's also happening to create a greater opportunity for Prince Rupert is a change in the mentality of cruise lines and the itineraries they've offered. For a long time they were stuck selling this experience of Vancouver, three Alaskan ports and a glacier. What's happening now is that they've seen such tremendous growth in Alaska that they're having congestion issues with finding berth space at certain times of the week. In addition, they're trying to target the repeat cruiser and offer alternative itineraries to get off just Juneau, Ketchikan, Skagway, Vancouver.
That's why you see that Royal Caribbean is now doing the Vancouver-Victoria-Seattle circle in the shoulder seasons. Also, Norwegian Cruise Lines is exploring stops in Prince Rupert. If they can incorporate Prince Rupert, they'll have time to incorporate Campbell River because of some sailing times. I think the B.C. coast has a tremendous opportunity to build a cruise industry that will at least look at some of the success of Alaska and see a lot of the coastal communities develop and capitalize on that.
B. Lekstrom (Chair): Shaun, I would like to thank you on behalf of the committee for your presentation to our committee this evening.
We will now move to our next presenter. I will call on Odd Eidsvik. Good evening.
O. Eidsvik: Good evening. It's nice to see you people over here. We're very pleased when politicians come to Prince Rupert, because they become aware of some of our problems. Then usually we can do something with them that they will always remember, like a crab fest.
I've given each of you a presentation, but I'm not going to go through it page by page, because you people, I'm sure, can look at it afterwards. There are
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some points that I would like to bring out that are very evident, and you'll understand the problems we're having in Prince Rupert. On page 1, I'm relating to the fishing industry.
Before that, I'd better give you a little background on myself. I used to be a fisherman. I became a chartered accountant and have been practising here and in Richmond for about 40 years. I've gone through good things and bad things. I've been very fortunate with what we've done. I have been elected a fellow of my institute. There are 180 of us in the institute who are fellows, and there are 8,400 CAs, so I consider myself very fortunate. That's the background I come from.
On the details of the amount paid to the fishermen from 1995 to 2000, you'll notice there's a tremendous drop in the amount of money that has been paid in the fishing industry, not only to the shore workers but to the fishermen. The economic benefits for 1996, if you'll notice, are $560,000. In 2000 I have estimated that they're about $332,000. That's quite a difference.
On the next page I'd like to draw your attention to the top of the page and the importance of the fishing industry to Prince Rupert. In 1996 the amount paid to the shore workers and the fishermen was equal to all the wages paid at Columbia Cellulose or Skeena's pulp mill, Prince Rupert Grain, Ridley Terminals, the Prince Rupert school district, the city of Prince Rupert, the port corporation and the longshoremen. As you can realize, the fishing industry was a very, very major player in the economics of Prince Rupert. That has in large part disappeared, and Prince Rupert needs to develop something else along another line to replace that revenue.
This has caused a tremendous decline in Prince Rupert and its economy. Not only that, it has also been the grain business, Skeena Cellulose, of course, the port corporation and all the others. What's happened to school enrolment, for instance, is that it has dropped 682 students. You multiply them usually by four or five — I've used four — and you get a loss of 2,700 people in Prince Rupert.
In the year 2000, we lost 46 businesses that closed their doors. In 2001 to date, 131 businesses have closed their doors. I've done some statistics on the population. We used to have about 18,000-some-hundred people in town. I think it's down to about 14,500 to 15,000. That, of course, causes pressure everywhere.
Property values, assessment notices, are a very good way to find out what's happening. There are two examples there. In 1996 this house was worth $100,000. Now it's worth $87,000. In example 2, the house was worth $206,000, had $30,000 worth of improvements and is now worth $163,000. You can see that things are not very bright in Prince Rupert as far as the economy goes. It's interesting also to note that in the year 2000 there was one residential house built in Prince Rupert, and in the year 2001 there were three building permits issued for individual residences.
B. Penner: A 300 percent increase.
O. Eidsvik: Yes. That's actually very good, Barry. That's very good.
When you look at No. 7 on page 3, you'll find that in September 2000 the average selling price of a home in Prince Rupert was $109,000; on December 31, 2000, it was $108,000; and on September 30, 2001, it was $94,000.
The next point I want to make is that this situation does not only apply to Prince Rupert. It applies to Terrace, Kitimat, Smithers, Burns Lake, the Chilcotin, Prince George and even Quesnel and Williams Lake. However, I also want to say that it's not all gloom and doom. The simple fact is that the Institute of Chartered Accountants and myself — I support the position; I was one of the ones who started it, hammering away — are really pleased with what you people have done in lowering taxes. We think that the reduction in personal taxes, corporation taxes and the B.C. corporation capital tax is going to make a big difference in bringing investors into Prince Rupert.
I have about a dozen clients in Vancouver who were considering leaving British Columbia, and they're quite well-to-do. They were going to set up companies in Alberta and move their assets out to Alberta because of the present problems in British Columbia. I'm glad to see that problem was solved.
The recommendations I would like to make, in conjunction with the institute, is that we think the small business limit of $200,000 is too low. Small businesses, as you people know better than I, produce most of the jobs in British Columbia and in Canada. The $200,000 limit has been there for some time — many, many years, as a matter of fact.
That's the amount that small business pays tax on — earnings up to $200,000, at 19 percent at the present time. It used to be 23 percent, and it's now down to 19 percent. When you go over $200,000, the tax rate jumps up to 46 and 44 percent. If you have investment income in the company, the rate drops. I think it goes up to 51 and 50 percent. We believe there's a need to increase that threshold to $300,000 or $400,000. We think that would also create jobs, because the small businesses would hire more people.
On page 5 we also refer to a debt management program. We think that's very important, even if things are going the wrong way at the present time. We think there should be a plan made to see what can be done to manage the debt in a proper fashion for the simple reason that if you don't have a plan, you don't have any guidelines. We accountants are great for guidelines. We think that the provincial government should develop guidelines going down the road and a plan to manage the debt that's there and that will be there for a little while.
We would also like to see budget transparency. We don't think there has been any of that in past years, except maybe in the last year. I say maybe. We think it's very important that everybody know what the position of the budget is so that we can measure down the road and have something decent to compare to.
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We also believe that the government should be following generally accepted accounting principles, which is a term that all accountants love to use because we can earn fees on it. We think the government should be applying this to the schools and to all their finances, because then you will get an exact reading of what's going on with the finances of the province and be able to compare it from year to year to make sure that things are on track. If you do it in one year and you don't do it in another year, it doesn't work, and the finances can very easily go astray, as I've seen in quite a few businesses.
When I say development in our area — Prince Rupert, the Queen Charlottes and along the CNR rail line, for instance — I think that does more good for Vancouver sometimes than it does for the north. On page 5, halfway down, I've got an example of a fishboat, a trawler. He spent $286,000 in equipment and gear. He paid $32,000 for some winches, $6,000 for some radar equipment and $89,000 on an engine.
Guess where he spent the money? He didn't spend it in Prince Rupert. He spent it in Vancouver, because that's where the shipyards and all the manufacturers are. He also spent $30,000 for gear and nets, $9,000 for insurance and $131,000 for engine repairs. It didn't get spent in Prince Rupert; it got spent in Vancouver. Allied Shipbuilders is the one that repairs most of the big ships. They earn lots of money, and therefore all the wages are in Vancouver.
What I'm basically saying is that if the government sees the need to develop the north — and we would like to see that — we believe that much of that money will flow back to Vancouver. The richer you make Prince George, Prince Rupert, Terrace and the northern parts, the better off Vancouver will be. Vancouver isn't very healthy at the present time.
For instance, we like to go out to nice restaurants when we're in Vancouver. A year or two years ago you had to phone on a Thursday to get a reservation. At the present time, you can phone one of these very nice restaurants on a Saturday afternoon and find a place for two for a very fine dinner. That indicates what the economy is like in Vancouver in relation to what it was two or three years ago. I think that if you develop the north, you're going to see much of that flow to Vancouver, and Vancouver will also be in a much better financial situation. That's a little biased, of course.
My wish list — what I'm looking for, if the government could give us a hand with it — is first of all aquaculture. Really, British Columbia is a very small player, when you have 500,000 tonnes of aquaculture and salmon moving into the United States from Norway, Chile and all these places. I don't like farmed fish, by the way. I prefer the wild stuff, but it's a fact of life.
Aquaculture is here, and as long as it's safely done and the waste is handled correctly and the nets prevent fish from escaping, we think it's a very good idea. The sooner you lift the moratorium, we'd be very, very happy.
The only problem is that there's a whole bunch of Norwegians coming into the north coast to do the sea farming, not us. The sea farming industry is a good one on Vancouver Island, and we think it could be very good for Prince Rupert. That's the closest thing I can see to getting some development going here to help with jobs and so on.
Then, of course, the lifting of the moratorium on oil and gas is very, very necessary, but that's a long-term thing. I think there's no harm in lifting the moratorium. It's only for exploration work. When you go to the next stage, then you've got to make sure. I plan on living here, because the lifestyle is very good in Prince Rupert. I intend to live here for a long time, and I don't want any oil spills or explosions down there.
Now I'm going to go into my Norwegian mode. Norway is a very poor country, a second cousin to Sweden. They developed oil and gas, to much opposition, by the way. The fishermen and the environmentalists raised hell, but the government decided to go ahead. I was back there about five years ago, and I was asking my cousins and the fishermen what they thought about the oil and gas.
They said: "You know, there's a boundary around the oil rigs where they can't fish, and that's where all the fishermen fish, because most of the fish are sitting in a place where they can't get caught and they drift out every once in awhile." They are actually making money on the oil rigs, believe it or not. Do you know what the environmentalists said? My cousin said that there are no complaints from the environmentalists at all any more.
I would also like to see the Norwegian principle used in spending the money. I want to make sure that Port Hardy and the Queen Charlottes and the aboriginals and Prince Rupert and Bella Coola and these places receive money from the oil and gas. That's going to be a very difficult negotiation with the federal government, of course. You have some federal people here in the audience who will give you a hand if you need it — like Vince. If you're going to offer Vince a retainer, he'll be glad to take a retainer and go back to Ottawa and lobby like heck.
In Norway, what they have done, though, is set up a big trust fund. This trust fund enables all the villages and the small towns on the coast to build roads, schools, hospitals, gymnasiums, playgrounds, older citizens' homes and so on. It has worked very well in Norway, and now Sweden is the second cousin to Norway — which, being a Norwegian, I think is pretty good.
B. Lekstrom (Chair): Odd, just a couple of minutes.
O. Eidsvik: Okay. I'm almost finished. The other one is Skeena Cellulose, which is a very touchy problem. I'm enough of an accountant to realize that you can't settle Skeena Cellulose unless the price is right and unless somebody can expect to make money on it. I agree with that position.
I've had very difficult negotiations with some of my clients when they've been buying or selling a business and they haven't had enough money to buy the building with. They were able to buy the inventory and the
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business, but they couldn't buy the storeroom. What they did was this. The owner leased them the place for five or ten years, and by that time, the person had earned enough money to be able to buy the fixed assets. I think the provincial government should be looking at some situation where they can reduce the price for proposed buyers, hanging out the forest rights and leasing out the forest rights for a decent price and giving the forest people, if they are good corporate citizens, a five-year option on using the forest rights. Then if they're good corporate citizens, they get another five years, and at the end of 15 years, they would be allowed to buy the forest rights if they so desire.
That would cut the amount of money that the present prospective buyers would require to buy Skeena Cellulose. I do say, with a touch of caution, that nobody will buy the place if the pulp prices go up and they can see a profit coming from the place. It was one way that we had in many, many purchases for our clients — to not sell the fixed assets but to lease them. It worked wonderfully on fish boats and quotas and all these things in the past. I don't see any reason why it wouldn't work on Skeena Cellulose.
I need your help on one more thing, and this is the end. I want you people to help us get 50 percent of the fisheries jobs in Ottawa moved to Vancouver and Prince Rupert, and the other 50 percent can go to the east coast. At the present time, we don't believe that the fisheries department listens to the advice they get from Prince Rupert or Nanaimo or Vancouver. They're way back in Ottawa. If we can get those people out here right on the grounds, it would help the situation in Vancouver and the fishing industry tremendously.
I thank you for the time, and it's very nice to see you.
B. Lekstrom (Chair): Odd, you've put a huge amount of information across in what's certainly a very short time frame. I'd like to thank you on behalf of the committee for your presentation. You've done an amazing job.
If there is one short question, I would entertain that. I see no questions.
Moving on to our next presenter this evening, I will call on Mr. Dave McGuigan. Good evening and welcome.
D. McGuigan: Good evening. It's nice to be here. I won't have a long dissertation. Actually, I was just in Ottawa the last three days supporting and defending the province on its veto power on Bill C-10, which is marine conservation areas.
To give you a little bit of background on myself, I was born and raised in Vancouver to one of Vancouver's older families, and I've been a banker for some 27 years. I just retired earlier this year. I don't know if you want to call it retired; I'm in the consulting business now. This oil and gas scenario is becoming a full-time job.
Some five years ago I sat with Bill Belsey, whom I'm sure you all know, in one of the local establishments and looked around at our economy here and said: "We're not going anywhere. We need some diversification on the north coast — not just Prince Rupert, but the whole north coast." We came across this little-known offshore oil and gas. A lot of people didn't know about it. It was sitting out there. It was a sleeper.
I don't know if very many of you are aware of this, but there have been eight wells drilled offshore here in B.C. and eight wells drilled on the islands. You'd also be interested to know that the drill rig that drilled those wells was made in Victoria by Victoria Machinery Depot. You can probably see the site from your office. It was called the Sedco 135. It was built in 1965, and it drilled about half the wells out here offshore. It's still operating today. It was a high tech rig of its day.
Over the last five years there's also been a considerable amount of talk about the offshore oil and gas potential in this area and the benefits that may come from it. It's been an intention of our committee to make sure as many people as possible are aware of this. We used the press extensively.
As MLAs, some of you had received a little mail in your mailboxes from us, as did the opposition. I don't think they kept it, but they still got it. Offshore oil and gas potential and the benefits that may come from it in this region and for the province on the whole are substantial. I think that's pretty obvious. I think all you have to do is look at the east coast of Canada, and it will give you an answer to the potentials at stake for us down the road.
A little bit of information. The GNP in 1999 of Newfoundland was the highest in Canada, a lot higher than B.C. or Ontario. This was because of oil and gas. It was a former have-not province. I should emphasize also that 73 percent of the revenue that's generated from Newfoundland goes to the federal government. The province gets the leftovers, and still they have a GNP that's greater than the rest of the country. You might remind some of your counterparts in Ottawa about that.
If you look closer to home here in Blair's country, you'll see that it's done a lot for this province. I'm not sure of the exact figures, but I think it's upwards of $2 billion that it has generated for the provincial coffers. You think about what it would be like on the north coast here if we were able to double that.
This report, B.C. Offshore Hydrocarbon Development: Issues and Prospects — this is part of my "picture tells a thousand words" scenario — was done by the Maritime Awards Society. It's on the Internet for anybody who wishes to access the information. It indicated that the potential in revenue for the province is somewhere in the region of $4 billion a year. Frankly, there's nothing in British Columbia — and I emphasize nothing — that could have the capacity to generate that amount of money.
Obviously, that will pay for some of your programs and maybe help you a little bit in your funding down the road on your long-term planning. Obviously, it will help with our hospital crisis and even pay for a few colleges that are needed in the region. That's a little
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shot, I guess. Actually, this one here could probably pay for itself, if some people thought a little bit outside of the box, shall we say.
The region requires economic development — there's no question about it — and we need it now. We don't want to think about it five or ten years from now. As my counterparts who spoke earlier have indicated, the school enrolments dropped substantially. We'll just build that into the adult community that's also left. That represents, from what I understand, upwards of 20 percent of our population in this community. First nations unemployment on the north coast averages around 80 percent. You and your recommendations can make a change to that.
The province has started a process for reviewing the moratorium, and I, for one, applaud you. I've been to Victoria. I've talked to the Premier. I've talked to the minister. I've talked to all the ADMs. They know me. They might find me irritating, but they're very cooperative and informative.
A report just came out Monday night that some of you may not be aware of. This is a government report, legally contracted through B.C. Bid and the whole scenario. I think it's about 200 or 300 pages. It indicated that the technology was there. I haven't seen the report. It's in the mail, I understand. It's being couriered to me. That offshore oil and gas development can take place with the technology we have today. The report indicated there was no reason why not. For those in the audience here who want to see it, it's also on the Internet under the Energy and Mines website.
As added support to that thinking, there was a recent poll completed in September of this year by McIntyre and Mustel out of Vancouver. What they do is polls. To give you an idea, 66 percent of the B.C. people support the lifting of the moratorium on offshore oil and gas. They broke it down to a coastal community, and 72 percent of the people on the coast of B.C. support the lifting of the moratorium. I think that's a pretty clear message to all of you and to the government that the people want it lifted.
The study went into a lot of other issues, such as what are the greatest concerns to them. The two major concerns were health and jobs, obviously, which seem to be the issues today. I might add — and it's no shot against the environmental community; they all play a part in this — that in the population of B.C., of the people polled, only 2 percent thought that was a major issue right now. I'll be glad to make the poll available, if you'd like. It's a professionally done one, and it wasn't biased, but some people might imply it to be.
B. Penner: Can you tell us the date of it?
D. McGuigan: September of this year — last month. It was introduced in the October 2 oil and gas conference that was put on. The Ministry of Energy and Mines has a copy of it. There were about three or four people from Energy and Mines there.
T. Bhullar (Deputy Chair): Could you forward it to the committee?
D. McGuigan: I will be glad to do that, yes.
I think we have to speed up the processes. Mr. Eidsvik indicated this process is going to take awhile. I'm a little bit more optimistic. Mr. Eidsvik is from Norway. I hesitate to mention that Norway was able, from start to production, to get their oil and gas flowing in five years. That shows Norwegians have initiative. It has been very successful.
I once talked to a visitor in Vancouver, the Secretary of State for Norway — who's a fisherman, I might add — and he was very reluctant in the beginning about oil and gas, but he's fully supportive of it. That's been shown to have worked well in Norway.
I encourage you to pass on a message to the Premier that we as a committee and a number of other organizations would like the government to start discussions with the federal government on the Pacific accord immediately, not next year or the year after. The Pacific accord was started in the mid-eighties, somewhere around '87 or '88. Due to an accident, our friends to the north have shelved the paper for a while, but they were into drafting a Pacific accord. It's incumbent that we start discussions with the federal government in any case about our resources off the coast, whether we develop them or not.
I think also that the government should start talking with the first nations. The first nations have been here long before you and I were here. At the very least, they have an interest because it affects their environment — culturally, food from the sea, etc. It would be good if the government had some informal talks initially with the first nations about what they would see for themselves. I think it would be good.
For those in the audience who don't know, Mr. Lekstrom is the Chair of the offshore oil and gas northern caucus committee. I encourage you, Mr. Lekstrom, to attempt to visit some of these first nations communities and get their feedback on the issue.
Just to give you a little bit more information on this resource, people knock around a lot of numbers, but the estimated value of this offshore oil and gas out here, on a one-third recovery rate, is somewhere around $400 billion. That's a substantial amount of money sitting out there. Some of the oil and gas companies may not want to develop it, because the leases are already held by Shell and Petro-Canada for the most part. They don't have to pay for it; it's in their back pocket right now. As soon as the moratorium is lifted — and we hope that's very soon — they're going to have to do something about it.
For that resource, a normal field would last 25 to 35 years. We had made a proposal that we form a trust. Odd beat me to the draw here, but we made this proposal to the government three years ago that a trust be formed and a percentage of the royalty be put into a north coast trust, with the investments in the trust going to B.C. corporations — B.C. bonds, of course, and what not.
This trust would be administered by people on the north coast. An inflation clause would be built into it, so it would be current-value money all the time, and
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the trust money would be used for infrastructure on the north coast. Our tax bases in our communities are not large enough to build the facilities that our communities require.
The Shetland Islands have done something like this, and so have the Orkney Islands. They are planning for the future when their oil and gas will be played out also.
I also encourage you to look toward our neighbours to the north to Cook Inlet. That's a community of 8,000 people who have lived with oil and gas for 30 years. It's been very successful, and they have now found another pool that will keep them going for another 25 years. That community is very, very successful. They've created a number of other industries around the oil and gas industry, and they're building on their infrastructure also.
The resource is a strategic one to Canada and, for that matter, to the United States and Japan. Our two largest trading partners have expressed a lot of interest. We should not miss the opportunity to develop it from the standpoint of supplying our strategic partners with the energy.
Our group feels that if the government of B.C. shows the initiative, the resource can be on stream in five years, as it was in Norway, and that we can benefit substantially from it in a very short period of time. I know the Premier has indicated times like eight or ten years, but as I indicated, I think we can do it over a shorter period of time.
A number of people have lined up to look at this resource and are waiting for what your government is going to do — and my government. I don't hesitate to say that it's my government too. They've indicated that they're interested in building an LNG plant, LPG plant. There are a few aluminum companies around here, even a steel plant.
Prince Rupert is the gateway to the Asian markets. We're closer to Japan than any place in North America. That's one of our pitches, so you're going to get it more than once. We have to pound it into the governments-to-be. We live here. We can't understand why this hasn't developed, and it takes the support of federal and provincial governments to make it happen.
I haven't got much more to say, other than thank you for coming to Prince Rupert and taking the time to listen to us. I think you'll find that when you gather your thoughts on what we've said to you, there is a great deal of opportunity here on the north coast. It doesn't take much to kick-start it. Some of these resources we have up here will pay for some of the bills down the road.
Just to give you an idea, this is an environmental review. This is just one volume of an environmental review that was done in Nova Scotia. They did this environmental review. It's pretty. I mean, they even hand these things out, and there's even colour pictures in it. They did this within a five-year time frame, and they're pumping gas now. Why can't we?
B. Lekstrom (Chair): Dave, thank you very much for your presentation this evening. I will look to members of the committee, if there are any questions.
B. Penner: I think this is just a question asking you for some help. As you know, the government and the Premier have committed to embarking on a review here to make sure it's safe before we decide on whether or not to allow exploration. That's ongoing. That's underway as we speak, to quote some federal cabinet minister who I normally don't quote.
The thing that we are going to need your help with is also working with the federal government. A few weeks ago I ran into some senior people from the Department of Environment, western region, I think they call themselves, including a representative from the federal Minister of Environment's office. Their attitude was not entirely accommodating about even considering lifting the moratorium. The way they put it to me was: "Why would you want to give people on the north coast false hope?"
I ask you to help us work with the federal government to tell them that it's not false hope we're looking for. It's real opportunity. We'll take our chances. We don't need to be considered as children in terms of being protected from our own aspirations.
D. McGuigan: Well, let's face it. It's Mr. Anderson, and I would address the issue with Mr. Anderson personally and politely on a couple of occasions. We must bear in mind, I think, that Mr. Anderson has the best interests of the country as a whole at heart, but he was the one who recommended that the moratorium be put into place in 1972.
I don't expect him to change his mind to that extent. However, we had a committee when Paul Martin was here. We addressed our concerns to the Finance minister and passed him a brief on it and asked him to pass it on to the Prime Minister. We've had the opportunity to talk to a number of other ministers in Ottawa about oil and gas.
We will certainly pass on those thoughts. I would certainly like to know who the environmental people, the ministry people are on this end of the country, and I'll pass it on. It takes a while for them to get a response.
We would like some support and some pressure. I don't know if there's any pressure that's being put on Ottawa from Victoria on this, and I'm sure you're not going to let me know. The fact is that it's good for British Columbia, and I think you're going about it the right way. You've hired the right people. You've got a scientific team looking at it that, in my mind, is a good team.
One thing I'll comment on is that though you've developed a team to do an energy development policy for British Columbia, I'm extremely disappointed that you haven't included the offshore in it. I don't understand why not. There's energy out there.
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B. Lekstrom (Chair): All right. Well, Dave, again, on behalf of the committee, I want to thank you for the presentation you've given our committee this evening. I can assure you, like the other presenters through the previous 16 meetings we've held, that the information you've put forward will be given due consideration in the development of our report.
D. McGuigan: Get yesterday's Globe and Mail. That's what we want to see out there.
B. Lekstrom (Chair): At this time — it is now 8:30 — we will move into our open mike session. We do have a number of people that have expressed an interest in addressing the committee. I will call first upon Mr. Bob Payne.
B. Payne: My name is Bob Payne. I'm a businessperson here in Prince Rupert. Of course, I don't speak for anybody but myself. Thanks for the opportunity.
I'd just like to say a few things about the way I see the kinds of problems we have in the north and other non-urban areas of the province that are particular to those types of places, as opposed to urban areas.
Political power in the province and in the country resides largely — well, entirely — with population, and we're too small a part of that to have a lot of impact on our own. Of course, our MLAs or MPs have huge geographical areas that have a lot of different issues. Most of those issues revolve around land use and resources. Every citizen, myself included, thinks our agenda is the one you should be listening to.
Economic growth in urban areas can and does occur pretty much under the radar. There were all sorts of new-economy companies that grew exponentially in Vancouver and then imploded. They pretty much didn't have much to do with government. They rented space, they plugged in a few computers and did whatever they did. Some of them thrived, and some of them disappeared.
The multi-layered nature of an urban economy means that a lot of expansion, where government is concerned, is just filling in the blanks. The process exists, and new businesses' experience is kind of a paint-by-numbers process. It's not uncomplicated, but it's doable. New and disruptive and controversial economic initiatives are a relatively small part of any cityscape. In resource areas, the opposite is true. Our political power is spread thin, and there just aren't very many people here. When it comes to economic initiatives, government is kind of a monster stepping carefully among a bunch of mice.
Every existing resource industry has a tremendous amount of government attention, because there are land use issues. It's a mine or a forest company, maritime construction or whatever, but wholly new and untried industries have a completely new game to invent. Expansions of existing industries at least have some sort of previous plot line, though changes in the last decade have undermined any ability to rely on precedent even for existing industries.
Private special interests, many of which you would have a lot of trouble even locating on the map, have had enormous influence on public policy decisions made over resources in this province — certainly more than the people who actually live here. I believe we have to be masters in our own house in British Columbia. To get there is going to require a lot of courage on the part of the government.
The B.C. Liberal government has set a reduced bureaucratic burden on business, and that's certainly welcome. We can rebuild confidence in the business community here in B.C. and elsewhere to move forward, but I think most British Columbians know that doing so will be an uphill battle. It's not going to be without bumps.
Many British Columbians seem to have little understanding of the enormous amount of money that resource industries have poured and continue to pour into provincial coffers. Certainly, the northeast hydrocarbon now is like a billion dollars a year, and I don't think a lot of that goes back to the Peace. Perhaps Mr. Blair Lekstrom could tell us about that. I don't know.
The lower mainland wasn't built on film-making and computing. It was built on minerals and logs and fish and now natural gas, a lot of it. Human progress has always been a matter of trial and error. We take a step or two forward and one back, and we fix things as we go along. I think we have to have some faith in the ability of people to manage the new problems we encounter, as we encounter them, if we expect to maintain a standard of living in B.C. that's high quality.
I don't think we can live in an error-free utopia. It's not going to happen. Renewable resource industries aren't going to happen if the planning process is expected to be perfect. Places that have tried it haven't exactly been examples of economic growth. I think we should recognize that a quality environment springs from a quality economy that can afford intelligent regulation, not the other way around.
Everyone is aware of the financial problems faced by our provincial government. Some have alleged that tax cuts are the problem. I think the government knows that tax competitiveness is no longer optional. We don't have some magical quality that absolves us in the risk and reward calculations made by people putting up their money and doing business. We've made a lot of mistakes in the past in this province, and it's going to take a while to fix them.
We in Prince Rupert are facing a particularly uncertain future. As the international economy recovers, and I hope it will soon, I think our traditional employers can recover. I hope they do. The new opportunities — oil and gas and aquaculture and perhaps others — are going to have a real problem. It's that there's no real current way forward, and we have to invent it as we move along. I hope we'll make use of the experience of other jurisdictions and not insist on trying to reinvent the wheel while things wither away.
Investment needs to be made welcome in the province again, and I think the current government has moved pretty decisively to help that happen. It has to
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continue if we're going to recover in a reasonable time frame. The new and pretty promising initiatives you've heard about from people tonight are going to face a lot of obstacles outside of the purely economic questions of whether they actually can be done and whether we can make money doing it.
We're going to face in British Columbia the ruthless and pretty unscrupulous tactics that were employed by parts of the international environmental movement where the logging industry was concerned under the last government. It was pretty devastating for the province. I think it's pretty clear that a lot of these resource opportunities are going to be unpopular in a lot of circles. A lot of famous talking heads are going to be briefed and trotted out, and they're dutifully going to bray. I think the most recent one was Prince Philip in Toronto, who I suspect might be able to find the Queen Charlottes, but I don't think he has any idea where the Sable trench is.
If British Columbia has decided to pursue some or all of these opportunities, courage is going to be required. It's going to be a pretty rough ride, but I don't see that the province has much of an alternative. Right now we're facing a bit of a demographic time bomb in the province. The pattern of two workers out, one worker in is going to start pretty soon. Attracting professionals to government services, whether it's education or medicine, is difficult. The government faces a bit of a funding crunch. I think there's no real option other than to grow our way out of it.
I'm sure you've done a lot of listening as you move around the province. Not all of it is going to be pleasant, and I don't think it's going to be all that easy for the next while. If I could leave you with one thought, it would be this. Listening is necessary, but not forever. The province and certainly this city need decisions and then to move on, one way or the other, pretty quickly. Our citizens here certainly deserve to know where they're headed economically, and we deserve to know soon. Thanks very much for your attention.
B. Lekstrom (Chair): Bob, I would like to thank you for your presentation this evening, and certainly for the open mike session. I know there would probably be the wish for a number of questions, but in order to get to everybody in this evening, I'm going to have to refrain from that.
For our next presenter this evening, I will call on Brian Denton. Good evening.
B. Denton: Thank you very much, Mr. Chairman and committee, for allowing me to be here tonight and for being here yourselves tonight.
My name is Brian Denton. I was born in Vancouver, was raised in the Okanagan and graduated from UBC in mechanical engineering. For the past 13 years I've been employed locally by Canadian Stevedoring/BCR Marine Co. in the deep sea marine terminal and vessel loading operations. Prior to this I was employed for ten years by the port of Prince Rupert, and prior to that I worked for eight years as a commercial fisherman in this area. In total, I have now worked on the waterfront in Prince Rupert for over 30 years.
I wish to speak to you for a few minutes tonight on the status of the deep sea shipping business in Prince Rupert and on some of the changes I believe we need to make to improve our economic situation in this community. Although this is my personal presentation, I hope I am speaking tonight on behalf of all longshoremen, foremen, terminal operators, stevedores, shipping agents, tugboat operators and the many others who directly or indirectly make their living from deep sea shipping in this area.
I wish to begin by stating that we are presently experiencing the virtual disintegration of the marine shipping industry in Prince Rupert. Shipments from the Ridley Island coal terminal have fallen to less than 50 percent of what they were and are now at roughly 20 percent of the terminal's capacity. Shipments of grain through the Ridley Island grain terminal have similarly fallen, and there are rumours that Prince Rupert Grain may not even start up this winter.
Our general cargo terminal, Fairview Terminals — a fabulous three-berth facility — is sitting virtually empty. Lumber shipments from this terminal are no longer occurring due to the closure of the Skeena Cellulose sawmills. Our local pulp mill has closed, reducing to zero the amount of pulp being loaded aboard vessels from Prince Rupert.
What was seen to be the destiny of this community — the shipping business — is struggling for its very survival. It is a very depressing, demoralizing experience. Expertise that has taken 25 years and longer to develop is being wasted and lost as individuals now go on to employment insurance or leave town in search of work. Jobs have either already disappeared or are in threat of being eliminated.
People are being forced to sell their homes at terribly depressed values, leaving this area unwillingly and to going to work in often much larger areas where they have no desire to live. What is happening is simply awful. Our community, including our much-needed shipping business, is indeed in a desperate situation, and our hands are tied as to our options for survival. We have no place to turn, except to leave this area and take with us the skills and expertise that only time can create.
What do we do to bring back employment to our area? To begin, I believe we must change our way of thinking in many ways but particularly in three basic ways, as follows.
First, the potential of this area. Time and again we hear about the tremendous potential Prince Rupert has. Time and again we tell ourselves it is just a matter of time before this area grows and prospers. Well, it is time to stop this talk, because it is just giving us all a false sense of security.
It is not a given that this area will grow and prosper, as can be seen from what is happening here. Potential is not paying the bills. As difficult as it is, it is time we faced the hard truth: that is, Prince Rupert is struggling for its very survival. Unless things change very quickly, thousands of people will unwillingly be
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uprooted from this community with dreadful financial repercussions to all involved.
Our second way of thinking: congestion of the lower mainland. For close to 20 years we in the shipping business have been waiting for the reported congestion of the lower mainland to drive cargo this way. Well, it is just not happening. Every time congestion of a terminal occurs down south, actions are taken to relieve the congestion.
One person years ago scoffed at the notion that Vancouver was becoming congested. This person remarked: "Congested in Vancouver? Really now, have you ever been to Rotterdam?" Although congestion may someday cause cargo to come this way, we can no longer afford to wait for it to happen. This community must therefore stop assuming such a thing will happen and make other plans to base our economy upon.
Our third way of thinking: we need to recognize the significant growth that is taking place in the lower mainland of British Columbia versus the relative collapse of our northern corridor. Along with this recognition, we as a province and as a country must decide if this is what we want to occur.
As the Minister of Finance, Mr. Paul Martin, recently stated in a meeting in Prince Rupert: "The federal government does not want Canada to become a nation of five cities." If we do not want Canada to become a nation of five cities, then what are we going to do to prevent it? I would suggest there are many ways that the political leaders of our province could find to exert considerable control on the decline of the north versus the growth of the southern area of our province, if there were the collective wish to do so.
I wish now to briefly suggest several specific ways that need to be taken to improve the economy of Prince Rupert and area.
One, return to operation the Skeena Cellulose sawmills. Regardless of whether the pulp mill does or does not continue to operate, it is vitally important that the sawmills in Terrace, Carnaby and Smithers resume operation as soon as possible. Hopefully, the resumption of these sawmills will also lead to the resumption of export volumes of lumber shipments through Prince Rupert. The possibility of lumber markets developing in China has suddenly emerged, and it is imperative to this area that we not miss out on the opportunities that these new markets may offer.
Our second option: continuation of round log exports. Although we would all like to see value-adding to our forest products, the export of whole round logs has been an important part of the northern economy for many years. At this time, with commodity shipments through Prince Rupert having declined so drastically, the export of round logs and the diversification that this commodity represents becomes all the more vital to our failing economy. The export of round logs from the north therefore needs to be encouraged at this time.
The third area: restrictive foreshore development policies of Fisheries and Oceans. Fisheries and Oceans Canada have very restricted development criteria on the undeveloped foreshore of the Prince Rupert and area harbour. If we cannot reasonably develop our foreshore in this area, our development potential will be severely restricted. This has negative implications not only to Prince Rupert but to the entire northern corridor, and it needs to be corrected.
Another item: restrictive provincial and federal legislation. While we may not be able to save our pulp mill or increase shipments of coal or grain through our local terminals, we must be free to develop our local resources. In this regard, there exist two major impediments to the development of our local resources.
Offshore oil and gas exploration and fish farming. I ask: are we expected to sell our houses at depressed prices, to unwillingly uproot ourselves and our families from this area and move to other centres to find work when there would be work here if not for the moratoria presently in place on offshore oil and gas exploration and on fish farming? If oil and gas exploration can safely take place in so many other areas of the world, then so can it here. If fish farming can take place in the southern areas of our province, then so can it here.
Cruise vessels. I do not believe for a minute that the thousands of passengers on the cruise vessels travelling our coastline are not interested in seeing Prince Rupert. In the early 1980s we had up to 80 sailings to our city from a number of cruise vessels, including the MV Prince George, Princess Patricia and The Love Boat.
This is world-famous, beautiful British Columbia. People travel from all over the world to see beautiful British Columbia. Many of them are Americans. As the cruise vessel industry struggles for safe areas to travel, Prince Rupert looks all the more inviting a place to visit. The development of cruise vessel facilities in Prince Rupert would benefit the entire northern corridor, the province of British Columbia and Canada. Therefore, this proposed facility should be supported accordingly by our provincial and federal governments.
In conclusion, we are in a desperate situation in Prince Rupert. We cannot wait for the tremendous potential of this area to bring us the jobs we have lost with the closure of the Skeena Cellulose sawmills and lumber mills. We must change the way of our thinking in various respects, as we can no longer assume that growth is inevitable or that congestion of the lower mainland will direct traffic to our underutilized shipping facilities.
We as a community, as a province and as a country need to act quickly and aggressively to rebuild the devastated economy of our community and our region and to allow the citizens of the north to fully utilize the resources of our area.
B. Lekstrom (Chair): Thank you, Brian, for your presentation. I know you weren't given a great deal of time to put that much information forward, but you did it very effectively.
I will now move on to our next presenter, Mr. Gary Coons. Good evening.
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G. Coons: Good evening. Thank you very much for your time and for visiting Prince Rupert. I'm Gary Coons, president of the Prince Rupert District Teachers Union. I've been in Rupert for over 24 years. I came here for one year and decided to stay. I feel I'm a very committed teacher, and I'm very excited about the role that I'm going to partake in for the next three years, hopefully.
The last four or five speakers have had a certain agenda. I'd like to get back to the social agenda. I think the economic agenda is very important, but being a teacher, I think we have to go back. We've heard the horror stories from the first six or seven speakers about health care and the problems that we've had and that they're encountering. I'm going to stick to the education agenda, along with a bit of health care in the mix.
For the sake of quality education, the B.C. government must carry through on its promise to maintain and enhance funding for public education. No cuts to funding for health and education was a campaign promise by the current government. For that commitment to be meaningful, the actual dollars in the budget each year must at least reflect the additional costs of inflation — as probably my good friend Odd would agree — and, importantly to us, the collective agreements that will, hopefully, be signed in the next month or two.
A three-year freeze on the budgets for education will have the impact of making deep cuts, cuts that will have a significant negative impact on the quality of public education in this province. Over the last decade, when real per-pupil expenditures on education declined slightly, cuts to programs were an ongoing phenomenon. A freeze on spending will have a much more negative impact than the slow squeeze of the past decade. Unless the policy directions of this government change to reflect the reality of funding needed to maintain a quality system, the impact will be deep cuts in services to our children.
The key role that education must play in this increasingly complex and technical world is widely recognized. I'm sure we all realize that education is truly an investment — one that not only pays off in supporting individual development but also provides social and economic returns to society as a whole. A well-educated workforce attracts investment and the kinds of businesses that provide well-paying jobs and helps to diversify our economy from its traditional resource base.
Despite the economic difficulties that have developed in the past few months, a commitment to maintaining funding to education is essential for the long-term stability in the educational system necessary to sustain economic and social development. Government expenditures on education can cushion the downturn in employment in the short term. Money spent on education has the most positive impact of all government expenditures. Schools are found in every community with children, unlike other services, which tend to be more centralized.
During these times, the government should be spending more on services, not less. Increased expenditures would have the impact of stimulating the economy and cushioning the impact of the downturn in other areas. Spending cuts, as demonstrated by the Canadian Centre for Policy Alternatives, will make a bad situation worse and could spell the difference between a slowdown and a full-blown recession. Rather than cutting spending, the government should be scaling back on the tax cuts it has announced and repealing its commitment to balance the budget by the year 2004-05.
A favourable climate for education is a long-term impact. A positive climate helps teachers do their best. We all have an interest in a positive educational climate: students, parents, teachers, community and government. Maintaining and building on the system that exists will help maintain a positive environment. Forcing cuts from an already lean school system will do real harm. A negative climate not only affects today's teaching but also has a profound effect on the future.
Our province and much of the rest of the developed world faces a teacher shortage, one that is already being felt. The teachers who will be needed in five years have begun their university programs this year. These younger people have many options open to them. Feeling positive about the prospects of working in public schools is one factor in the choices they will make.
Creating tension and anxiety for current teachers and turning away potential teachers for the future turns short-term pain into long-term damage. It could take decades to repair the harm we would do to our public education system if there's a three-year freeze on education expenditures. Having a well-financed education system is an important part of creating the conditions that are positive for all. This requires maintaining and enhancing the relative level of funding, not just fixed dollar amounts.
There's a real concern locally with the proposed spending freeze for health and education. Prince Rupert has approximately 240 teachers, about 3,300 students, ten in-town schools and three village schools that are accessible only by boat or seaplane. Our student population, as mentioned, is 51 percent first nations.
We as an educational community are working hard and have recognized the need for a long-term, sustained commitment to improve the education of first nations students. To help us in this endeavour, all stakeholders in this district have signed a first nations education-in-partnership agreement. It's signed by the school district, teachers, all the unions involved, the band councils from Hartley Bay and Metlakatla, the Ministry of Education and the tribal council. All of the stakeholders are signing this as a long-term commitment.
This, in my mind, is seriously threatened by any cuts to health and education. It is extremely difficult to retain and attract teachers to work in our village schools. Besides the beauty of a remote location and working with wonderful children, the incentives are noticeably lacking. The village allowance that the 30
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teachers get is basically the same as in 1992. It has not changed in eight years. We're having a real problem getting incentives through into the villages.
It's also increasingly more burdensome trying to recruit specialist teachers in such areas as science, math, French immersion, etc. With a looming teacher shortage and about 13,000 teachers on the verge of retiring in the next five or six years, this problem will be getting worse in all subject areas.
We have a high proportion of special needs students in our district. A freeze on education would severely affect resources currently available to them. You have heard the stories about that. A spending freeze that relates to a significant cutback would have devastating effects in school district 52. More resources are needed, not fewer. For the sake of quality education, the B.C. government must carry on its promise to maintain and enhance funding for public education.
B. Lekstrom (Chair): Gary, I thank you. I know five minutes is not a great deal of time to put that through. We will hear from one more speaker this evening. I will call on Inderjit Grewal.
I. Grewal: Good evening. Thank you for coming and hearing us. Actually, I came with no intention of speaking tonight but just hearing and being here for support to other community members. Before I start, I just want to say that English is my fourth language, so please don't pay too much attention to my grammar.
B. Penner: Only four languages? [Laughter.]
I. Grewal: Yeah. My dad spoke differently from my mom. I went to school in Kashmir, so I spoke Urdu most of the time. English is my fourth language.
My name is Inderjit Grewal. I was born and raised in India and moved here around four years ago. Well, I don't know much about politics. In India things are easy. You bribe the politicians, and you get the work done in, like, minutes. [Laughter.] I don't think that's going to work here.
As I told you, I moved here about four years ago. My whole family died in a car accident. It was really hard for me, as a single female, staying back, so I decided to come to Canada and to live independently and make my career. I came here and started working at the Northcoast Transition House in Prince Rupert. For three years I have been working full-time with the kids and working towards my degree in counselling.
When I heard about these cuts, to be honest, I was really concerned, worried and very scared. I think I'm the youngest speaker tonight. I'm 27. I was really worried about where I'm going to go in this whole picture. Basically, so much depends on seniority: if I moved here four years ago, where am I going to fall? So many questions.
I have so many co-workers who are pretty much in the same age category as I am, and we have a lot of discussions every day at work. It's really important to keep youth like us in mind when these cuts are taking place. I live on my own. I don't have any family to support. It's going to affect my day-to-day life. I'm living from paycheque to paycheque. How these cuts are going to affect me as an individual is important too. Tonight everybody has been talking about this million dollars and big megabudget stuff, but I'm worried about my xyz-per-hour cheque, to be honest.
Transition House is a shelter for women and children who are fleeing abusive relationships. From April last year to April this year there were 1,200 bed-stays for women and 1,250 bed-stays for kids. We are talking about 2,450 bed-stays in a small town like Prince Rupert, so you can well imagine the degree of abuse in this particular town.
Some of these cases were extremely high-risk: high-risk women in really bad shape, staying with us for anywhere from one month to six months. They needed support every hour while staying with us. We provide food, shelter, clothing — support to women and children. I work with children in particular, helping them from being victims to survivors.
Tonight what I'm going to ask is that. I don't know lots of alternative suggestions. We just need money desperately. That's all I have to say. I don't know how you're going to do it. I don't know much about this whole thing, but we do need money. You know, we're talking about three years right here, and instead of balancing everything in three years, let's make it 30 years. Just make it one person cut per year or something like that. I don't know — maybe buy another bank machine or something and have lots of green notes every day. Just a request: little agencies like that have a lot of impact on communities like this, so please don't forget about that.
B. Lekstrom (Chair): Thank you for your presentation. Certainly, as with many of the other presenters, when people come and they speak to our committee, you can tell it's from their hearts. I can tell you that your comments will be taken. There are some tough decisions that have to be made, but there has to be compassion and a lot of thought put into those as well. I appreciate your comments.
With that, it is shortly after 9 p.m. now. The committee is scheduled to catch a flight out of here relatively shortly. Before closing, I would like to take this opportunity on behalf of the committee to thank the people of Prince Rupert and the surrounding area for coming out and sharing your views and giving us your ideas on the upcoming budget. I can tell you that it goes without saying that this committee, as well as the many people in government and across British Columbia, realize the challenges you're facing here in the northwest. We will do our part to get our province back in order.
I thank you. With that, have a safe night. I will now adjourn this meeting.
The committee adjourned at 9:04 p.m.
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