Public Accounts -- Issue No. 24 -- Monday, January 31, 2005 (HTML)

2004 Legislative Session: 5th Session, 37th Parliament
SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS
MINUTES AND HANSARD

8. The Committee encouraged the Auditor General to issue a follow-up report on Salmon Forever: An Assessment of the Provincial Role in Sustaining Wild Salmon

9. Resolved, that the Committee endorse the recommendations contained in the Report entitled, Office of the Auditor General 2004/05: Report 5 - Salmon Forever: An Assessment of the Provincial Role in Sustaining Wild Salmon

10. The Committee considered its draft Report to the House.

11. Resolved, that the Committee endorse the recommendations contained in the Report entitled, Office of the Auditor General - Audit of the Government’s Review of Eligibility for Disability Assistance

12. Resolved, that the Committee adopt its Report to the House, as amended.

13. Resolved, that the Chair present the Committee’s Report to the House as soon as practicable.

14. The Committee adjourned at 3:32 p.m. to the call of the Chair.

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
PUBLIC ACCOUNTS



CONTENTS

		Page

Unfinished Business		719

Auditor General Report: Preventing and Managing Diabetes in British Columbia		719
	W. Strelioff K. Lane P. Ballem V. Tregillus

Auditor General Report: Internal Audit in Health Authorities		739
	W. Strelioff D. Lau D. Woodward A. van Iersel

Auditor General Report: Salmon Forever		748
	W. Strelioff M. Sydor B. Graham J. Alley R. Davis A. Martin

Draft Committee Report to the House		763
	A. van Iersel W. Strelioff

Auditor General Audit of the Government's Review of Eligibility for Disability Assistance		767

Draft Committee Report to the House (continued)		767

Other Business		768
	W. Strelioff A. van Iersel

Chair:	* Jenny Wai Ching Kwan (Vancouver–Mount Pleasant NDP)
Deputy Chair:	* Ken Johnston (East Kootenay L)
Members:	Bill Belsey (North Coast L) * Bill Bennett (East Kootenay L) * Greg Halsey-Brandt (Richmond Centre L) Arnie Hamilton (Esquimalt-Metchosin L) * Randy Hawes (Maple Ridge–Mission L) Brian J. Kerr (Malahat–Juan de Fuca L) Lorne Mayencourt (Vancouver-Burrard L) * John Nuraney (Burnaby-Willingdon L) * Valerie Roddick (Delta South L) * Lynn Stephens (Langley L) Ralph Sultan (West Vancouver–Capilano L) * Joy K. MacPhail (Vancouver-Hastings NDP) * denotes member present

Witnesses:

Jamie Alley (Ministry of Agriculture, Food and Fisheries)
Dr. Penny Ballem (Deputy Minister of Health Services)
Rod Davis (Ministry of Water, Land and Air Protection)
Bud Graham (Ministry of Agriculture, Food and Fisheries)
Ken Lane (Office of the Auditor General)
David Lau (Office of the Auditor General)
Al Martin (Ministry of Water, Land and Air Protection)
Tin Lok Ng (Office of the Auditor General)
Manjit Sidhu (Ministry of Health Services)
Wayne Strelioff (Auditor General)
Morris Sydor (Office of the Auditor General)
Dave Tredger (Ministry of Sustainable Resource Management)
Valerie Tregillus (Ministry of Health Services)
Arn van Iersel (Comptroller General)
David Woodward (Ministry of Health Services)

J. Kwan (Chair): Good morning, committee members. Sorry for the delay. We will have one or two members joining us as the time…. We have one just joining us now. Anyway, as the meeting progresses, we'll have others joining us as well.

Welcome back, everyone. I hope you had a relaxing holiday. There were many attempts trying to set up committee meetings prior to this time, but because of schedule problems, we were not successful in achieving that. In any event, here we are. We have a full agenda for the day. The agenda has been circulated prior to this time. Committee members have received it, I trust.

With that, we will simply, then, proceed with the items listed. You'll recall from our last meeting that there was an item of unfinished business, and that is the correspondence regarding the Nanaimo doctors issue. I wanted to just finish up that item, committee members, and then we can move on to the various reports and have the presentations.

J. Kwan (Chair): At this point I'm going to invite committee members, if there are any other comments…. There was quite a bit of a heated debate, to my recollection, at that meeting around the correspondence that, I believe, all the committee members have received and should have copies of. I'm going to open up the floor and invite comments from the committee members.

There are no comments? Okay. My suggestion, then, is this: for the correspondence, if it hasn't already been forwarded to the Deputy Minister of Health — I believe she probably has received a copy already — I will simply request on the record that the ministry respond to the people who wrote to us. Then we'll move on to the next item, if committee members are fine with that. I don't know whether or not we need a vote on that.

J. Kwan (Chair): It's not necessary, if committee members are fine without putting this forward as a formal motion and simply just putting it forward as a request to the ministry.

Okay, thank you very much, committee members. I will then call the next item on our agenda, and that is the auditor general's 2004-05 report No. 3: Preventing and Managing Diabetes in British Columbia.

I should also say, committee members, that as you know, we do have a heavy agenda. There is the suggested time allocated to each of the agenda items. I would ask committee members to be mindful of that, because I surely would like to get through the agenda today. Okay, committee members, thank you very much.

I would invite our witnesses to please come forward and make their presentation. I see Mr. Strelioff all ready to go.

Auditor General Report:
Preventing and Managing Diabetes
in British Columbia

W. Strelioff: Thank you very much, Chair. Good morning, and welcome back to the new year.

This morning the first report that we have to deal with is called Preventing and Managing Diabetes in British Columbia. As you know, part of what we do is examine how well government manages its programs and responsibilities, including health care. Of course, we're always searching for opportunities to manage better.

We decided to audit how well B.C. is preventing and managing diabetes, because it reflects how we manage chronic disease in general. Beyond that, of course, diabetes itself is important because it causes much suffering, because dealing with it is a major cost for the health system and because it is becoming more common. In our work we did find that there is much room for improvement, which we will discuss as we proceed this morning.

With me this morning are my colleagues Morris Sydor and Ken Lane. Morris is in charge of our health sector, and Ken led this examination. It's one of many that Ken has led in terms of the complex work we do. He will now review our findings, conclusions and recommendations.

K. Lane: Chronic diseases like arthritis, asthma and diabetes affect about one in four British Columbians. As medical science has conquered many acute illnesses and as our population ages, chronic diseases have become increasingly important causes of illness, of death and of spending on health care. For many chronic conditions, cure is unlikely, and the goal is to manage symptoms and complications over years or decades. This long-term but relatively low-tech management does not always fit well into a system that in many ways is still focused around….

V. Roddick: Sorry to interrupt, but could someone move the speaker closer to the speaker? It's just not picking up at all.

J. Kwan (Chair): We've tried to do that, Val, so we'll see if that works better.

Diabetes is often used as a test case for managing chronic diseases in general. For example, the province and the B.C. Medical Association chose it as one of the first two diseases for which they are jointly developing disease collaboratives. We were similarly interested in diabetes as a test case but also as a disease important in itself.

British Columbians with diabetes have about twice the mortality rate of fellow citizens of the same age. One of the main reasons is cardiovascular disease, which kills about 80 percent of people with diabetes. Diabetes also damages small blood vessels, leading to other serious complications such as kidney failure, blindness and amputation. For example, in B.C. about two-fifths of people on kidney dialysis have diabetes.

A Saskatchewan study found that almost half the adults with diabetes there also had a heart disease complication, shown in green on this slide, often combined with eye or kidney complications. Only about 40 percent, shown in the light grey on the upper right, had no major complications.

B.C. currently spends about $760 million a year to provide hospital, pharmaceutical and medical services to people with diabetes. Comparing people of the same age, we spend about 1.7 times as much per person for people with diabetes as for those without.

About 5.1 percent of all British Columbians have been diagnosed with diabetes. A conservative estimate based on recent mortality and incident rates is that this will reach 7.1 percent by 2010. These are disturbing figures but may not reveal the full extent of the problem, since they only include diagnosed cases. How many British Columbians have undiagnosed diabetes is unknown. However, studies elsewhere in Canada and in the U.S. have estimated that 2 percent or more of adults in each country have undiagnosed diabetes.

To understand where this growth is coming from, it is important to understand something about the two main types of diabetes. Type 1 usually appears in childhood or adolescence. In it, the body totally loses its ability to produce insulin, a hormone essential for life. People with type 1 need regular injections of insulin. Given its severity, it's fortunate that type 1 diabetes does not seem to be becoming more common.

Type 2 diabetes usually shows up in adulthood. The body is poor at producing insulin or at using it efficiently. Management can range from diet and exercise alone to that plus regular injections of insulin. Type 2 is the most common type of diabetes and the one that is increasing in prevalence. One reason for the increase in people with type 2 diabetes is good news: with modern care, people with diabetes are living longer. Another reason is simply that ours is an increasingly older population on average and diabetes is more common with increasing age. As the chart shows, in the 30 to 39 age group about 2 percent of people have diabetes, while in the 70 to 79 group over 16 percent do.

B.C.'s changing ethnic mix can also affect the prevalence of diabetes here. First nations people and members of visible minorities have a higher prevalence of type 2 diabetes than other people and currently make up about a quarter of all British Columbians.

However, the most worrisome reason for rising diabetes rates is weight gain. Individually and collectively, nationally and internationally we are consuming too many calories and burning off too few. Overweight and obesity are usually defined in terms of what is called body mass index or BMI — this is a BMI chart up on the wall — which relates height to weight. A BMI under 25 — say, being 5 foot 10 and weighing under 174 pounds; that's the green square in the middle of the chart — is considered to be in the healthy range. A BMI of 25 to under 30 is in the overweight range — the darker grey. And a BMI over 30 — say, being 5 foot 10 inches and at least 209 pounds, and that's the red square — is defined as obese.

Excess weight markedly increases the risk of diabetes. For example, among men 45 to 64 years old, which is the lower line on the graph, the risk of diabetes is about 1½ times higher for overweight men than for normal weight men. But this risk ratio increases to more than 6 to 1 for very obese men, those with BMIs over 40. For women in this age group, which is shown in the upper line, the risk ratio increases even more rapidly, exceeding 10 to 1 for the very obese.

Unfortunately, obesity is increasing in Canada. The black line on the chart shows that since 1985 the percentage of adult Canadians who are obese has risen from just over 5 percent to 15 percent. The coloured line below shows that obesity in children is rising in parallel. The shorter broken line shows obesity levels among adults in B.C. Now here the good news is that, as in many health measures, British Columbians do better than the Canadian average. The bad news is that all three lines are based on people's estimates of their own weight. The black dot shows the actual level of obesity among B.C. adults when their weight is measured rather than self-reported — almost 18 percent in 1999. In other words, self-reported information shows the rate at which the problem is growing but underplays just how big the problem is.

This is literally a sign of how common obesity has become: "Size extra-extra-extra large available here." It appeared in the window of a souvenir shop in Victoria. A competitor went one better, advertising extra-extra large and extra-extra-extra large at no extra charge.

To recap. We decided to audit how well B.C. is preventing and managing diabetes, because it's a paradigm of how we manage chronic diseases in general. Beyond that, diabetes itself is important because it causes much suffering, because dealing with it is a major cost for the health system and because it's becoming more common. Our audit looked at the roles played by the provincial government and by the health authorities in management and care. We did not examine the roles of private physicians.

What can we all do to improve the situation? A good way to think about this is to group actions into different levels of prevention: primary, secondary and

tertiary. The basic precept here is that it is better, ethically and financially, to prevent a disease or condition in the first place than to cure it later.

Primary prevention focuses on encouraging the underlying social and physical structures that lead to healthy behaviours. Its target market, if you could use that phrase, is a broad population — often everyone in B.C. or everyone in Canada. Its goal is to prevent people from becoming at high risk of a disease or condition of concern.

A good example of successful primary prevention is cigarette smoking. Since 1985 the percentage of Canadian adults who smoke has dropped from about 35 percent to about 21 percent. Again, B.C. is ahead. Our adult smoking rate, 17 percent, is the lowest in Canada, and it's probably the second-lowest in the world after Utah — and, we should point out, ahead of California.

Successful primary prevention. Tobacco reduction shows that primary prevention can be successful as long as several conditions are met. First, health problems must be attacked on multiple fronts using multiple weapons. The weapons used must be effective and applied in sufficient strength, and efforts must be kept up over many years. For example, reducing smoking required social marketing campaigns, fiscal measures such as increased taxation and legal measures such as non-smoking bylaws. It required continued effort over several decades to give time for both the attitudes and the environment to change.

What doesn't work is telling people to be good or blaming the victim. The rising tide of obesity throughout much of the developed world results not from a simultaneous collapse in moral fibre but because since the Second World War we have been massively successful at making food cheaper and more available and physical effort less necessary. On average we consume more calories and burn fewer of them.

Unfortunately, our metabolisms haven't changed. The difference becomes fat on our bodies. For instance, a British report calculated that a 145-pound man would have to engage in 39 minutes of strenuous activity to burn off a small Mars bar or 66 minutes to burn off a Big Mac. By strenuous, they mean activities like cross-country running or coalmining. Not many of us are coalminers anymore.

Secondary prevention focuses on people who are already at high risk of developing a disease. It aims to catch the disease when it becomes manifest or just before and to stop or reverse its progress. Successful secondary prevention focuses on those who are immediately at risk, and it has two stages: finding those at risk and then treating them. There are many methods available for detecting people at risk. The trick is choosing the right combination of method and of population groups to examine so that the cost of finding each new case is reasonable.

Recently several successful long-term secondary prevention tests have been completed. The treatments tested were quite simple — eating better and being more active — but were delivered with careful attention to detail and with lots of support to those in the program. The results were encouraging. The Swedish study found that, on follow-up 19 years later, the people who stuck to the program had normal mortality rates. The Finnish study, a three-year trial, had a 58 percent reduction in diabetes and a similar reduction in heart disease. This study set five goals for better eating and more activity. No participants who reached four or five of those goals contracted diabetes during the trial. As well, two large studies — one in China and one in the U.S.A. — obtained similar results.

Tertiary prevention is another way of describing the ongoing management of care for people who have diabetes. What are being prevented or delayed are the complications resulting from the disease. At this stage, cure or reversal of diabetes itself is rare. So much for background.

How well are we doing in B.C. at preventing and managing diabetes? Primary prevention efforts in B.C. are, unfortunately, limited. We found several primary prevention projects being delivered by health authorities and their local partners or by the provincial government. However, when judged against the rules for successful primary prevention — that is, right treatment at sufficient dose for sufficient time using multiple interventions at multiple points — these efforts fell short. Most projects have limited short-term funding, so sufficient dose for sufficient time is rare. Most intervene at only one point, not at a variety of potential change points.

Regarding secondary prevention, although research has demonstrated that secondary prevention treatments can be effective, we found very little such activity in B.C.

Regarding tertiary prevention, or diabetes management, there's general agreement that such management needs to be well integrated, and the province and health authorities are currently engaged in a number of projects aimed at furthering that integration. However, several issues key to successful integration are not yet being addressed. To structure its chronic disease management efforts, the province has adopted an expanded version of the chronic care model — a well-accepted and research-supported model, which is summarized in the screen in front of you.

The model has six key groups of elements all needed for success. Starting from the upper left, organization of health care includes, for example, incentives to motivate providers and patients. Delivery-system design looks at, for example, who takes responsibility for ensuring continuity of care. Clinical information systems include both patient-specific elements such as treatment plans and population-based information systems such as patient registries.

Starting on the upper right, decision support includes such things as clinical practice guidelines. Self-management support aims to help people with diabetes manage their own condition. Finally, community resources make sure that there are useful links to such things as community recreation services.

When we compared what is being done now in B.C. to the chronic care model, we found four key issues

that are not yet being fully addressed. Phrased as questions, they are these. What information is needed to manage diabetes cost-effectively, and what technology investments are required to collect and manage this information? Second, how can we make best use of diabetes education centres and the skills of their staff? How can we ensure continuity of care of patients' diabetes while they're in hospital for other conditions? And how can we best manage the transition to adulthood for children with diabetes?

Of these, perhaps the most pressing issue is that of information and information systems, in two ways. First, we don't have a clear enough picture of the population dimension of diabetes. We don't have good enough information, for example, on who has diabetes but is not yet diagnosed or who is receiving services from both a family physician and a diabetes education centre or who, on the other hand, has diabetes but has never received diabetes education.

Second, we lack integrated systems for sharing information among caregivers. The biggest gap now is getting information to and from family physicians, who are the cornerstone of chronic disease management. Cost and how to pay for it are problems here. Comprehensive information systems have capital costs in the order of several tens of thousands of dollars per doctor and operating costs of several thousands per year per doctor. However, we currently lack good methods of encouraging family physicians to invest in their parts of an integrated information system and of paying them to do so.

Our recommendations in this audit have several unusual features. Often our audits examine the methods used to implement a single policy decision within a single ministry or agency. What to address in recommendations and who to address them to is straightforward in such cases but not so in the present audit. In essence, what we have found is not a program requiring relatively modest changes but the absence of an organized program. Our recommendations are to the provincial government, not to the government and the health authorities, for three reasons.

First, research has demonstrated a number of diabetes interventions that are effective. However, only some are also cost-effective — that is, they produce units of health, if you could use that phrase, at less than a predetermined unit cost. Even fewer are cost-saving. In other words, it is likely that spending will have to increase if diabetes prevention is to be successful in decisions about public spending or the prerogative of elected representatives.

Second, most tools for primary prevention rest in government's and not the health authorities' hands. In fact, our recommendations are to the provincial government as a whole, as most tools for primary prevention are controlled by ministries other than Health Services.

Finally, diabetes is likely to increase even more unless significant interventions occur. Today we as citizens enjoy the benefits of societal choices such as convenient automobile travel and cheap, calorie-rich food, choices whose side effects will lead to increasing diabetes in the future. Efforts, and thus expenditures, now will mean a healthier and more productive population and lower health care costs in the future. Lack of effort now leaves future generations with a health deficit and the financial consequences of that. In B.C. the provincial Legislature is the best forum for addressing such questions of intergenerational equity.

Given that context, we recommend that the provincial government first search out potentially effective and research-supported methods of preventing diabetes and its consequences and determine, through pilot projects or other means, the effectiveness of these methods when applied in B.C.

Second, develop and provide to cabinet well-supported strategies for prevention, including documentation of the costs and the benefits in medical, social and financial terms of applying the recommended methods and of not doing so.

Third, implement the strategies chosen by cabinet in such a way that they can achieve their optimum effectiveness and be sustained long enough to be effective.

Inaction could have serious consequences. The U.S. Surgeon General recently stated: "Left unabated, overweight and obesity may soon cause as much preventable disease and death as cigarette smoking." If this situation is not reversed, it could wipe out the gains we have made in areas such as heart disease, diabetes, several forms of cancer and other chronic health problems.

A Mayo Clinic study went further and concluded: "In the absence of improved diabetes prevention, treatment and control, the favourable shifts in mortality rates observed in the general population during the last four decades are likely to diminish and perhaps even reverse."

A British doctor put it more bluntly: "This will be the first generation where children die before their parents as a consequence of childhood obesity."

On the other hand, concerted action could have big payoffs. This graph is from the Wanless report, a major British government examination on how to improve health in that country. The chair of the commission, Derek Wanless, was the retired head of one of Britain's largest banks, and he took a businesslike and economically focused approach to the subject. His commission concluded that if sufficient effort were put into population and preventive health, including the diabetes prevention steps we have talked about today — that's the fully engaged scenario, the bottom line there — the growth in U.K. health spending as a percentage of gross domestic product could be contained and, as the curve shows, even reversed. If things continued as they had, spending as a percentage of GDP would continue to grow. By 2023 they predicted that the difference between fully engaged and continuing as before, the top line, would amount to about 2 percent of gross domestic product, a significant saving.

To recap. As a province we can take action against diabetes at the primary level, where we aim to prevent

people from becoming at risk of diabetes; at the secondary level, where we prevent people at risk from slipping into full-blown diabetes; and at the tertiary or management stage, where we prevent complications and suffering. We know that primary prevention can be successful, as shown by tobacco reduction. But success still needs a number of interventions, each a big enough dose applied long enough and applied to multiple targets. Unfortunately, little is being done in B.C. now that meets this standard.

In secondary prevention, research has demonstrated several approaches, none of them unusual in technology or cost, that can reverse or markedly slow peoples' progression from prediabetes to full-blown diabetes. However, there is very little such activity in B.C.

In diabetes management there is general agreement on the need for better integration of services, and the province and the health authorities are currently engaged in a number of projects aimed at furthering such integration. However, we found several key issues needed for successful integration are not yet being addressed.

Committee members, I'm going to canvass to see if we want to pause at this time to ask questions. Rather, historically what we normally do is invite the ministry to come forward and make their presentation, and then we will ask questions jointly to all our presenters. If that's the wish of the committee…. I see heads nodding. That's the direction we'll go, then.

Thank you very much to the auditor general's office. We will now invite the Ministry of Health to come forward, and we'll receive their presentation. Then they'll be open to questions from committee members. Thank you.

P. Ballem: Thank you. I'd like to take the opportunity to introduce Valerie Tregillus, who is with me today as our senior director and who has been working with us on our diabetes strategy.

Thank you very much for the opportunity to come and speak to the committee about diabetes management and prevention in British Columbia. Thanks to the auditor general and his staff for their report. We always find the auditor general's reports helpful to us in providing us with a reflection from a third party in terms of how we're doing. What I'd like to do, because we are making a lot of progress in this area, is perhaps take the opportunity to update some of the information that has been described to you, to speak to some of the issues raised by the auditor general and to just give you a quick overview of where we are from the ministry's perspective.

Just a couple of things in terms of some of the comments made by the auditor general. Although our system in this province and in this country historically was a system based on acute care, I think the move that we have made in the 1990s — and then taken another step further forward in terms of our health authority structure — has really given us a platform that is ideally focused in order to provide a system of care that actually takes advantage of the full continuum.

As you know, the health authorities are responsible for upstream prevention, health promotion efforts. They have some involvement in primary care and are working to increase that, although our current structure in the province and in most of the country still prevents them from really completely being able to manage the primary care agenda, because it's still encased in a relationship primarily with government. But they do manage acute care, rehabilitation and the community care sector as well. In fact, they have the ability and the responsibility, based on their population needs, to actually make strategic investments in prevention and to see those as investments for the future in terms of mitigating the pressure on their acute care system.

Now, what we've done is, rather than go through the detail, because it has been presented to you…. The major essence of the recommendations from the auditor general's report is to search out and implement effective disease-specific management strategies and to develop and provide to cabinet well-supported prevention strategies, including in that business case a documentation of costs and benefits. Indeed, the ministry has done a lot of work over the last three years to look at the whole business case of prevention and to understand what the key risk factors are across many different disease entities whereby, if we were to focus our efforts, we would get a return not just on things like diabetes but on heart disease in general, stroke and other chronic illnesses for which our system has to invest many resources to support our patients.

If you look at this slide, this is really the essence of a huge amount of work on developing a business case that we've done. This slide shows you the six main areas, which account for well over half of the disease burden that we're dealing with in our province today. As you can see, tobacco still carries the biggest risk factor across many different chronic illnesses in our health care system today. Focusing on tobacco reduction is fundamental, as you've heard, not just for diabetes but for all kinds of other entities.

The use and misuse of alcohol also accounts for a significant burden of illness. Obesity and physical inactivity go together, because obesity is the result of both increased caloric intake and, also, decreased burning of calories, and physical inactivity contributes to that. There are occupational issues that we know contribute significantly to the burden of disease. The use of illicit drugs is the sixth major risk factor.

In articulating our prevention strategies in the province, what we have chosen to do is not work disease by disease but to focus on these very, very major

risk factors for which the mitigating strategies that we can put in place will impact across all kinds of things, including diabetes.

I think some members of the committee are on the select standing committee and have heard a lot about the strategies that we have put in place around moving forward on a prevention agenda. The report of the select standing committee that recently came out, in November of last year, speaks to many of those things. I think we are active. I'll come back to some of the things that we're doing.

I think the auditor general has highlighted that the growth of seniors in our population over the next 20 years is certainly a challenge for us. We know that our seniors population, as he has said, has a much higher risk of diabetes as well as other chronic diseases. That is, in fact, where the burden of illness is. As he's pointed out, if we don't move upstream and start addressing the risks in our children, our teens and our young adults, bringing in the necessity for investment in managing acute symptoms of these diseases as people get older, it's going to create a situation where our health care system is not going to be sustainable.

This slide actually illustrates the burden of chronic disease. Although diabetes is certainly a significant issue, as you can see, we have a raft of chronic disease that creates a burden for us in terms of managing our health care system. Across all of these different diseases, we have to ensure that our prevention activities, the work we do at the primary care interface, the way we manage people when they do develop acute complications, the secondary and tertiary prevention around those patients…. It all needs to flow in an organized strategy, but you can see that we have a burden of many diseases.

One of the basic premises that we'd like to leave with the committee today is that to develop an individual strategy for every chronic disease will actually waste resources. Our approach has been to take the whole entity of chronic disease management and chronic disease prevention and to create prevention and management strategies that actually can work in an integrated fashion — whether you have congestive heart failure, hypertension, diabetes or asthma, as examples. If we take the culture of our health care system and our health care providers in particular and help them, as the auditor general has pointed out, to understand and support the benefits of prevention and of high-quality primary care management of these conditions and early identification of people at risk — whether it be for hypertension, diabetes or rheumatoid arthritis — and then manage secondary complications that do occur effectively to prevent them from happening again…. That's a culture that we need to get basically very well grounded in our health system. I think we're well on the way to doing that, and we're seen as leaders in the country.

This slide is something that illustrates why it's critical — the business case that we've prepared around this concept and how we're using this information to take the system and the public to help them understand where we need to focus our efforts. What this slide shows is that in the left-hand triangle the top 5 percent of the population using our health care system is actually consuming 30 percent of all the resources. What that tells you is that in terms of change management, if you can focus — just start with that 5 percent, which amounts to about 125,000 people — your efforts on who they are and why they're consuming such an untoward proportion of all of our health care resources and actually use them as a driving wedge to start to change our system of care across the whole continuum, then you will have immediate returns.

The follow-the-money principle is something that we are working on. In that 5 percent, you will find a lot of frail seniors with many different illnesses. They may have diabetes, hypertension and congestive heart failure, and they may have had a stroke on top of that. If we can focus our efforts on a group that are so apparent in terms of their health care needs and understand how the system failed them in terms of preventing those conditions — how they're not doing as well to support them in terms of how they're being managed now that they have those conditions — we will actually move much more quickly in terms of being able to advance the sustainability and best-outcomes agenda.

In essence, the data behind that last slide really basically can be described in this slide. That is that 5 percent of the registered adult population…. By that, I mean people registered with our Medical Services Plan. They account for 30 percent of the payments we make to physicians, 36 percent of the hospitalizations and 64 percent of our hospital days. So you can see that that's consuming a huge amount of our primary and secondary care providers and the use of our acute care. As I told you, these patients have a high number of what we call comorbid conditions. That means they have many different illnesses at the same time. They use many different drugs, and 80 percent of this 5 percent group have at least six complex chronic conditions.

So you see, when you see that data, the notion of trying to focus uniquely on just one condition, like diabetes, we will not have the uptake and be on the steep part of the curve where the auditor general saw you in terms of success. Our approach has been to actually look at the patients who are consuming a lot of resources, knowing that we will uncover there and be able to create strategies that will impact significantly not only on diabetes and its prevention and management but also on all of the other chronic diseases that are the burden we're trying to manage.

In terms of diabetes itself, we have good data and a very good understanding of the kinds of things that poor management of diabetes or just the outcomes that actually do occur with long-term diabetes — that they are using resources in our system…. As you can see, if you look down the left-hand side of this slide, you've got cataract surgery; angioplasties, which are interventions where you go with a catheter into somebody's coronary arteries and squeeze them out and open up

their coronary blood vessels again; coronary bypass, which is open heart surgery; dialysis, which as you know, is the treatment for kidney failure, which is a complication of diabetes; lower limb amputations, which occur with longstanding aggressive diabetes; and retinal surgery.

You can see that the contribution in 2002-03 by diabetes patients to these very significant complications and interventions that are needed is very significant. So I think the auditor general has quite rightly pointed out that managing this disease better upstream, both at the prevention level and at the secondary prevention — in other words, identifying people early on in the stage of their disease — will have an impact.

I'll show you some data later that actually speaks to how we're doing around some of these complications.

Val Tregillus, who's here with me today, has in fact done leading work in this country in using our administrative data to actually demonstrate both to the health authorities and, more importantly, to our providers — and particularly our physicians, our nutritionists and our nurse case managers who work in our community care system — that we can and need to do a better job managing patients with diabetes.

We have used MSP and Pharmacare data, which as you know, are databases not necessarily set up to show outcomes. Actually, they are databases set up to manage payment systems for providers and track payment systems to pharmacists in the case of Pharmacare, but they provide good — pretty decent — surrogate markers for how we're doing, the kind of care we're delivering, the kind of prescribing practices we have. Because of the need for diagnostic codes in the MSP database, we could actually identify people's diagnoses. They're not a perfect electronic health record by any stretch of the imagination, but we've used them quite successfully to be able to illustrate that there's progress to be made.

What you can see is that if you look at people in the five geographic health authorities from the MSP database, which is tracking diagnosis and care delivered by our physicians and some of our allied professions, and from our Pharmacare database, which tracks prescribing, you can see that we have a way to go in terms of optimizing the medical diabetes care at the primary care level. So 28 percent, 32 percent, 35 percent, 38 percent and another 38 percent in terms of care being delivered up to guidelines: those are the results we landed on in 2002-03.

This is the challenge that faces every delivery system in the world. In Canada we have our own unique structure for that, and it's a challenge for us. Basically, to change the management of diabetes at the primary and secondary care level requires a huge grass-roots transformation in how we do business, and it does require proper support to providers so that they have good information reflecting their own practice, being able to compare their practice to their colleagues and to the standards and providing a continual feedback loop to help move them along, as well as providing them with what we call decision-support tools so that they can make the right decisions.

In January 2002, with Val Tregillus leading it, the ministry launched our comprehensive chronic disease management initiative. I just want to say that as a provider in our health care system for nearly 30 years now, my reading of the early results of this initiative are that…. I don't think anywhere that I've ever experienced, outside of things like randomized controlled trials, have we ever seen the kinds of results that we're seeing with this initiative. At the grass-roots level, without the structure and the funding of a research program, we're actually seeing practitioners fundamentally change how they do business. They're doing it because they've become aware that (a) it's the right thing to do, (b) it's been accountable for how they practise, and (c) they're seeing the benefits of doing it as part of a team and in a structured environment that's extremely supportive of them.

We have chronic disease management initiatives in all of these areas of chronic illness: diabetes; congestive heart failure; hypertension; kidney disease; asthma; chronic obstructive pulmonary disease, which are things like emphysema and chronic bronchitis; depression; osteoarthritis and rheumatoid arthritis; and dementia. As you can see, we cut across a wide array of very important chronic illnesses, and the approach that we're taking is the same across all of these different entities.

This slide shows you the expanded chronic care model which the auditor general's staff referenced. If you go to the bottom of this curve and see these two oval-shaped circles, on the left-hand side you have an activated community. That reference is: you have to mobilize our communities. We cannot solve this in the health care system alone. One ministry in government cannot solve these problems. It takes every sector to get engaged — education, transportation, housing, the advanced education system, our environmental sector. Everybody has to be engaged — our physical activity, our recreation sector, our municipal sector. They've all got to take responsibility and be engaged in that. In fact, our Healthy Living Alliance with the ministry has brought together many different groups, including UBCM and the B.C. recreation community, as well as our disease-specific NGOs, to actually start the work of mobilizing our community.

It also really requires an informed and activated patient. At the individual patient level, we've got to get the attention of our individual patients through things like diabetes education centres and other mechanisms. We have to be able to give patients the information and, basically, the incentives that they need to actually take a real interest in their disease and how it's being managed and what they can contribute to that.

I think one of the challenges we have is that our seniors population was raised in an environment where you went to the doctor, and whatever the doctor said, that's what you did. It was much more of a passive role for a patient. I think what we're seeing in the

generations behind our seniors is that our public actually wants a lot more information. They want to make some of their own decisions, and they want much more control. Bringing along everybody in terms of that kind of an approach and then providing them with the tools to actually be able to take control and manage things themselves is really critical.

On the right-hand side. If you have a galvanized community and patient, you also have to have a prepared and proactive practice team, and you've got to have prepared and proactive community partners — our Heart and Stroke Foundation, our Diabetes Association. All of them have a role to play in supporting these two circles to come together in relationships that can actually move health outcomes forward.

In this big oval, you can see all the different parameters that help feed that dynamic: healthy policy to enhance health; supportive environments, which I've spoken to and will come back to; strengthening community action; and then self-management; the redesign of our health care system so it can support a different way of delivering health care; decision support — it's very important that you have everybody with the best information available; then information systems to link all that together.

We have many partners in terms of our chronic disease model: the ministry; the health authorities; many health professions organizations; individual health professionals, who are important opinion leaders; patient advocacy groups; and lots of private-public partnerships, particularly with the pharmaceutical industry, who actually are very interested in moving this agenda forward and taking a responsible role in terms of ensuring that some of the very amazing but sometimes very expensive products that they bring forward to us are used responsibly and in a way that will give us the best outcome.

The chronic disease patient self-management program has been expanded across B.C. to basically address the issues of patients becoming informed and activated as their own self-managers. I would just speak to the issues of diabetes education centres. We believe that diabetes education centres are only one component of a multi-pronged approach that allows people who learn different ways and some of whom…. Going to a diabetes education centre probably is not how they're going to get galvanized to take responsibility for their own disease, so we are taking a multi-pronged approach to how we get patients really engaged and galvanized to basically take action that's going to help them.

Aligning incentives with performance is absolutely fundamental. When you go back to the data I showed you about the level of up-to-standard treatment and care for people with diabetes being where it was when we started — in the 30 to 40 percent range…. We know that we have to do a better job making sure that people have the right incentives, as practitioners, to do the right thing and that they understand accountability to do that.

So we have B.C. diabetes care guidelines that have been established now by the Medical Services Commission in the tripartite relationship with the BCMA, government and our public members. That is then supported by a change management approach that has used a quality-improvement collaborative around diabetes that involves the Healthy Heart Society, the BCMA and several of the health authorities.

We've also used a patient self-management coaching program that we're running through the College of Family Physicians. So that's teaching our family physicians how you can help a patient self-manage. The fundamental issue is that lots of our physicians who have been out in the community were taught a bit of a different model. They had to know what the right thing to do was, and their job was to inform the patient. Understanding how to coach a patient to actually take more responsibility themselves is a skill set that they tell us they need some help with.

Clinical practice self-assessment training. This helps our GPs, in particular, to be able to assess themselves on how they're doing in terms of their own practice and how well they are up to the standard that's established for care. Then integrating medical information at the point of patient care is a project that, if you have some questions, I'll let Val talk to you about. It's a pretty innovative project with UBC that, basically, we're doing to help our practitioners, using information technology in an efficient way, to manage the huge amount of information that they are bringing to the interface with their individual patients.

I just want to speak specifically to the auditor general's comments about our electronic health information systems. It's true. I think you know that there's a national organization called the Canada Health Infoway that has been given now in the range of $1.5 billion by the federal government to move the agenda of establishing an electronic health record across this country by 2009. They have specific targets they have been given, and every jurisdiction has a plan that has been developed for moving that agenda forward over the coming five to eight years, through a sharing of the funding from Canada Health Infoway.

We are well underway in this province. It's a very complex undertaking. Every province is at a different place. We have a province that's very well positioned and is moving this forward, but basically, in the meantime we have used some very innovative techniques to provide access to the kind of information that a doctor would have available through an electronic health record. Not being there yet, we wanted to allow them to move forward in the meantime.

So we've developed an electronic toolkit which basically, through web-based technology, is allowing our physicians to access rapid information support on their own patients and also allows them to access their own results in contrast to other physicians in their teams. So we have provided those physicians who are on board…. I believe we have up to 2,000 doctors involved now — is that correct, Val? — who actually

have access to this web-based technology that is providing them, specifically around diabetes and heart failure, access to the kind of information that, ultimately, we hope to be able to give them through an electronic health record.

This toolkit has won an award. It won the public sector Public Value Award through, I think, the national association of…. I can't remember what the name of the group is.

Now, I just want to give you this slide. This is not in relation to diabetes, but it shows, with this approach that we're taking, the kinds of results we can get. It goes back to my comments about grass-roots transformation. This is data that is from the congestive heart failure collaborative. This is June '03 on the left-hand side and May '04 — so a year's worth of data illustrated in this slide. What this shows you is that at the beginning of this collaborative, only about 20 percent of the patients with congestive heart failure being cared for by the hundreds of physicians in this collaborative actually had had an appropriate investigation, which is basically a standard of care for people with heart failure. At the beginning, only 20 percent had had that, but by the time we were at a year later, nearly 80 percent — I think it's 73.2 percent — had actually had this study done.

What this shows you is that in an environment that did not involve any new compensation changes or any new monetary incentives, just by providing information, proper decision support, access to our electronic toolkit and a very supportive environment, practitioners can really change how they do business and do the right thing. This slide is one illustration.

This is another slide, again from the congestive heart failure collaborative, showing how we got on a very steep curve around medication prescribing for heart failure and got from 20 percent of the patients having the appropriate meds all the way up to 93 percent in less than a year.

What this shows you is that we have a strategy that can achieve results. Our big challenge now is how to roll that out across a number of these different chronic diseases and all of the practitioners. I think that what we did in terms of the BCMA agreement, which was signed in the last eight months, was we built into that agreement, with our colleagues at the BCMA, some very key incentives to help roll these results out across the whole population, particularly of primary care physicians.

This is the business case that was developed specifically for diabetes in terms of improving chronic disease management. This is mainly the management of people with either early- or late-stage diabetes, and it doesn't actually address the prevention strategies which I've talked about.

In terms of management of diabetes, the substantial progress, as I've told you…. We have clinical guidelines that have been published. We have patient registers, where we have our patients across the province with diabetes identified, that our doctors who are caring for them can have access to. And the patients themselves can have access to their own progress. We have performance measures built into our performance agreements, both in our service plan and in our performance agreements with the health authorities, and we have a safe and secure website which is allowing us to sort of leap ahead of the electronic health record more structured process and give our providers and patients access to information while we're waiting to have the perfect solution come on stream over the coming years.

This is a graph that basically shows you measuring hemoglobin A1c. For some of you who may be familiar with diabetes, it's a fundamental measure of tracking somebody's progress in terms of managing their diabetes. Most patients with diabetes understand that hemoglobin A1c is a test you can't cheat on. Unlike the old after-fasting glucose, where you could take a couple of days and starve yourself and cheat and have a good result on your fasting glucose, the hemoglobin A1c actually measures how well you've managed your sugars and your diet — and, if it's the case, your insulin — over a much longer period of time. It's a very good measure of how well somebody is doing over weeks and months in terms of managing their diabetes.

This is 1999, where only 31 percent of diabetics were getting their hemoglobin A1c measured at the appropriate times. You can see that, with the initiation, we released that data in 2001. We got the business case for diabetes done here in 2002. We distributed the guideline, and we started in, in 2003, with some of our health authorities and our British Columbia collaboratives.

What you can see is that these are the kinds of results we're getting. In response to the auditor general, who quite rightly said we need to steepen our curve, I think we are on a much steeper track and intend to steepen that up as much as possible.

This slide also shows you important data over the last three years in terms of the percentage of diabetic patients with complications. I would not call this nirvana, but at least I think I can reassure you that the trends in terms of complications from diabetes are coming down. If we are to show ourselves successful in the prevention strategies, we would hope to see this come down over the next five years very significantly. It's only through primary prevention that you start to really have an impact on these target-organ complications of a condition like diabetes.

In terms of prevention, I've mentioned a number of different areas, but we have a number of very active strategies currently underway. We are participating in the National Diabetes Surveillance System at the level of the province, and we share that data with our health authorities. I think you know that we are in the process of defining core public health functions and revisiting a very old public health act that will be renewed and refreshed in the next two years.

We've done a lot of work with our health authority colleagues, other provinces and territories and the federal government in getting input on what a new con-

temporary public health act would look like. Core programs, in terms of prevention and of chronic disease and health promotion, will be a fundamental piece of that.

Basically, we have produced five major evidence-based directional documents in the area of chronic disease prevention and how to plan for that and build capacity. Those have been shared with the health authorities around the risk factors of physical activity, healthy eating and tobacco, and we have a couple more that we are working on. Again, back to our fundamental premise: if we focus disease by disease by disease, we will lose resources and time. We're much better off to go to the key risk factors and focus on those.

We have a very aggressive strategy to engage other ministries, because as I've indicated, every ministry needs to be involved in this. You know, the government is looking at a fundamental platform for moving ahead on prevention, understanding that it's not just the Ministry of Health that has to be responsible but that most ministries can play a role in prevention strategies.

As an example, the Ministry of Transportation and CAWS can work on things like the Rails to Trails program, where you're actually taking old railway lines and converting them into bicycling paths. We know that alone in a community can really change the dynamic around how families can get physical activity on their time off. There are lots of different examples of that.

On Action Schools, I'll show you a little bit about…. It's a major initiative rolling out across this province in terms of physical activity and healthy eating and linking that to academic performance in our schools. That is probably, in the western world as far as we can know, the best hard science, evidence-based program of its kind that has ever been rolled out.

I talked to you about our Healthy Living Alliance, and we have many partners engaged in this strategy. This is just a slide around smoking rates. I think the auditor general quite rightly has said that the multi-pronged approach to tobacco control that this province has had underway for some years, which we've continued to modify and nuance and encourage, has resulted in us in this province — now out in 2004 — having the lowest smoking rates in the western world, with only Utah being ahead of us. That has a very major impact on many chronic diseases.

British Columbia was also instrumental, both in the Ministry of Education and in Health, in galvanizing the federal-provincial community at the deputy ministers' and the Health and Education ministers' levels to actually come together for the first healthy schools and health-promoting schools initiative that has ever happened in Canada, which I think is a major step forward. We have brought together, through CMEC — the Council of Ministers of Education, Canada — and through the Conference of Deputy Ministers of Health…. We have now come together, and across the country we have a healthy schools and health-promoting schools initiative that is focusing Health Canada and other parts of the federal government and every provincial government, through their Education and Health ministries, on how to actually create a supportive school environment for kids making healthy choices.

As the auditor general has said, in terms of mobilizing community, we have a multi-pronged effort particularly focusing on physical activity, which is a fundamental risk factor for diabetes and other chronic diseases. We have a lot going on where the platform of the Olympic Games, coming to British Columbia in 2010, has been a great source of enthusiasm. We have 92 Spirit of B.C. community committees across the province that are engaged in looking at working on a number of community initiatives, of which physical activity is one priority area.

This province has also committed to the 20 percent challenge, which is that we will increase physical activity in our province by 20 percent by the time the Olympic Games come to town. We have three municipalities who have already passed motions at the municipal council level also committing to this — the city of Vancouver, Kelowna and Kimberley — and we know of 12 other municipalities who are considering such motions. That means it's coming from beyond the government. It's going down into the municipal level.

We also have individual communities rolling out their own programs. Fort St. John — some of you may know of the Walk to Whistler Challenge that they've put in place. Vancouver actually has two different activity programs for youth — one called Get Out and the other, More Sport. Abbotsford has its In Motion program.

Largely through the mobilization that's happening with the B.C. community committees, through the work of our Healthy Living Alliance and through the ministry and the health authorities, you can see that we're starting to get some real motion. Interestingly, of the provincial sport organizations, we have 15 sports that are putting a significant focus over the next two years on increasing participation. Finally, we are happy to see the BCMA respond to these challenges by their Docs on the Run program, where they have their own activity among their own profession to role-model activity.

This is just a little note on Action Schools. You know, the mission of Action Schools is to provide more opportunities for more children to be more physically active more often. It's a fascinating program which gives a lot of empowerment to the schools, their teachers and their parents in terms of choosing off a menu that's evidence-based on being able to understand the benefits they would get from certain activities and to actually choose their own program.

We now have this program in 25 percent of our elementary schools, involving about 45,000 kids and about 1,800 teachers. We're in the process of expanding that from kindergarten to grade 9 and into our high schools. There's a very strong healthy eating component as a part of this, because the two obviously go together.

In conclusion, we welcome the auditor general's suggestions and the work that they've done on diabetes, which is one of a number of very important chronic diseases that, frankly, are the focus of how we need to evolve our health care system. We understand very well that alignment of policy, funding, information for supporting clinical decisions, our prevention strategies, our labour agreements, our professional regulation, the ability for patients to access self-management strategies…. Alignment of all these things is actually key to our success not just with diabetes but with all our chronic illnesses.

We are applying these principles to all of them, including diabetes. We already have evidence of success, but we are not in any way naïve about the tremendous challenge that we still have ahead of us. It is critical to have government supporting these moves and helping us with our alignment that is going to be necessary to get to a standard of practice that meets the best-practice threshold and accountability for our patient outcomes.

Committee members, the floor is now open for questions to both the auditor general's office and the Ministry of Health.

L. Stephens: Dr. Ballem, I have a few questions for you. It was a very good presentation, and I think it was very comprehensive. I particularly like your slide 12, which talks about the expanded chronic care model and an evidence-based approach — and that it's focused on community care, which I think is what these kinds of initiatives have to be focused on.

You talked a bit about the diabetes education centres. My first question is: how many of those are in the province, and where are they located?

L. Stephens: We have 81 in the province, and I'm presuming they're scattered around the province in the larger centres.

V. Tregillus: Yes, they are. The health authorities are at this time amalgamating them, because we have distinct silo education centres for heart, kidney and diabetes. That doesn't make sense. It's a duplication of resources and confusing to patients, so those different centres are being amalgamated.

L. Stephens: Public education, I think, is a big plus when it comes to educating the general public, and those who have diabetes in particular. Are there any public education programs being planned — perhaps television advertising or newspaper advertising or some large public information initiative?

P. Ballem: Maybe I can speak to a couple of these. Val, you can jump in if you have anything else to add.

Certainly, in tobacco control we have ongoing public education — a very structured response. That is the kind of thing that we would like to move forward. What's important is that the Healthy Living Alliance, which constitutes all of the large non-governmental organizations like the Heart and Stroke Foundation, the Diabetes Association, the B.C. Lung Association — those kinds of NGOs which of themselves have their own public information campaigns…. What we have got them to do through the Healthy Living Alliance is come together and look at the five or six major risk factors and actually work with us on strategies to take advantage of the resources they're investing in public education and help make sure that we are getting the best mileage out of it.

Through a combination of work from government in the health authorities and then with the NGOs, what we're trying to do is align our public information campaigns to make sure that we're getting the best value. It's expensive, as you know, to run a public education campaign and to buy TV spots. Ideally, if we can all do it in partnership, agree on the most effective messages and then be able to address more issues than they might be able to do on their own, or we on our own, that's how we're trying to approach that.

L. Stephens: In terms of diabetes management, I think…. I understand your view in that there needs to be a comprehensive chronic disease management strategy, and I don't disagree with that. But I do think that diabetes, to some degree, is a stand-alone issue because of the other health problems that flow from that. I think it means that there needs to be a bit more emphasis placed on diabetes management at the caregiver level and also from the patient level.

You mention in your caregiver-level comments the negotiation of the 2004 working agreement with the B.C. Medical Association. What is happening there? I noticed in the auditor general's report that people receiving good care from the docs is below the recommended level.

The collaboratives that we've started and initiated across the province…. One is diabetes. Another I showed you some data from is congestive heart failure — a number of the chronic diseases. The purpose of

that was to build on the science, which basically said that if you put in place certain elements that support providers, patients and systems to provide better care, then you can actually have people practising up to the best-practice standard.

Through our learnings in that, we then took some of those learnings to the negotiating table with the BCMA and said: "Okay. This is coming from both our work and the work of your constituency. How do we now integrate this into our agreement so that as we continue to put more resources into the interface between government and the BCMA, we actually know that it's going to things that are going to advance the agenda of better management of things like diabetes?"

There are a number of elements in that agreement that are actually now addressing that. The first was that we matched money that the BCMA is coming up with around primary care, where they've freed up money out of their fee-for-service and we've added money. Together that comes to, I think, about $70 million. Now they have a chance, through the General Practices Services Committee, which we sit on and they sit on, to say: "Okay. How can we use this money to better move an agenda like better chronic disease management and help provide doctors with a fiscal incentive to do a better job?" That's one mechanism.

The second mechanism is that as a part of our agreement, we are having what we call our PQID days, which are professional quality improvement days. I think there are 16 of those happening.

P. Ballem: Thirty of those are happening across the province. They involve the health authorities and the practising primary care communities. The physicians shut their offices for a day, and they go to a meeting where we have experts, we have people who have skill sets in change management, and they can have a discussion about what the barriers are to them doing a better job. How can the health authority, the government, the BCMA help them with those? What are some of the learnings they've had that they can share with each other? How, in general, are we going to move forward a quality-practice agenda?

We've had a tremendous output from those. That was another fundamental piece of how we're actually moving forward. I think the other final piece is an ongoing commitment around the development of better clinical guidelines and looking at ways that we can actually reward people who are practising to those guidelines. Those are the basic elements.

V. Tregillus: I think the most fundamental thing that we've found is that doctors absolutely want to provide and believe that they're providing good care. It is only when they receive their own personal data on their patients that they realize that their care is perhaps below par. First of all, that is a tremendous learning when they receive their own data, and then they can take steps to improve their performance.

The key for us is this providing back to the doctors of their own performance data. We find that doctors are incredibly open to improving care, and it's a very powerful thing. When you actually acknowledge that you could do better, then miracles can occur. We are seeing that around the province now. Close to 1,000 doctors have come out to these PQIDs. We're reaching new doctors all the time, and they're astounded at the data. They say: "This can't be right. Your data must be wrong. We're providing better care than this."

That's when folk open up. We're all the same. We all want to believe we're doing absolutely the best job we can. The data and measurement is key and very, very powerful in change management.

P. Ballem: If I may, Madam Chair, I think the electronic toolkit that we described in the presentation — to the point that the auditor general made that, ideally, you need an electronic health record…. The electronic toolkit actually provides web-based access to that kind of information. That's how we've got around the fact that we're not there yet with the EHR. Nobody else is yet either. I think we've led the country in terms of saying: "Well, okay. If we can't be there yet on that, how are we going to give them access to the kind of information that can still galvanize them into better practice?"

L. Stephens: And all of this is driven through the primary health care model — with the docs and their electronic recordkeeping and the various new focuses on the primary care doctor and that particular model. This is where you're driving that through?

L. Stephens: At the patient level there are the courses and the coaching. I, frankly, have not heard about that at all and did not know that was available. It says that it includes an evidence-based chronic disease self-management program which helps people develop the skills they need to better look after their own health and cope with chronic conditions. How many of those are available? Where are they available? Are they available through the doctors at the primary care?

I'll tell you that I know a couple of people with diabetes, and none of them are aware of this. None of them have been able to access it, and none of them, to my knowledge, have been informed by their physician that this is in fact available. That's one of the areas where, perhaps, it needs better work.

I think the positive outcomes for diabetes are based on the level of knowledge. Individuals who have that disease are better able to look after their own health needs. I would suggest that this needs to have a bit more profile placed upon it, more emphasis in the doctors' offices and with the doctors themselves. Where are these available, and how can people access them?

V. Tregillus: They are available throughout the province. They are available through physicians, and the patients can self-refer if they connect with their health authorities. The evidence-based program we're running is from the Centre on Aging at the University of Victoria based on the Stanford model. This is a capacity-building program. In addition to that program, there are specific education groups, through the diabetes education centres and other places in the community, teaching patients self-management strategies.

One of the things that has changed in the last year…. We understood that the waiting list was very long for diabetes education and for the patient self-management training, so we've in fact instigated group patient visits. Instead of practitioners seeing one patient at a time — it's never-ending — now ten, 15, 20 patients get together. The group learning, the peer teaching, that goes on is phenomenal and tremendous support for patients from that model.

The identified gaps. I would like to know of the mechanism that the ministry is employing to identify gaps in care and services. What leverage, if any, aside from funding, does the Ministry of Health have to move the chronic care disease management forward through the health authorities?

P. Ballem: A couple of things. In terms of identifying gaps, because of the surveillance data we have in this province, if you start with prevention, we know where we sit. We actually have some of the best data in the country and are outperforming the rest of the country. We're doing two things. First of all, we're trying to continue to improve that performance overall and not sit back on our laurels. As the auditor general pointed out, even though we're doing better than the rest of Canada, we're still on an upward curve. So galvanizing our general public….

I think there are some key inequities within our population, and the auditor general did mention aboriginals. They're a group that has been known for many, many years to be at a very significant risk for diabetes, and we will need specific strategies for them. We're working closely with our…. We have, as you know, an aboriginal health adviser in our ministry, who is working specifically with the health authorities on their aboriginal health plans. Trying to address the gap in effective prevention strategies with aboriginals is another key area that we're trying to focus on. We're trying to identify within populations where we're missing the boat, as well as our across-the-board strategies.

At the primary care level, we figured out how to track the data. Through our knowledge management and technology division in the ministry, we are getting better and better comprehensive data. I think what Val has outlined to you is that our experience is very consistent with the scientific literature, which basically says that you have to take a supportive approach to get to quality improvement in these areas. You have to understand the barriers that lead providers to not be able to provide quality care and, as best as you can and as quickly as you can, try and address those.

I think the PQIDs are really a revolutionary exercise for us in the province in terms of, over a very short period of time, touching…. We will have touched thousands of physicians by the time they're done, and there are key themes that are coming through. Val just told me on the way down here that we have a number of themes that we will be taking back to the leadership council, which is the CEOs of the health authorities, to discuss. "Here are things that you can do to help move this agenda that aren't going to be a major strain on your fiscal resources and that are fairly concrete actions you can take that are going to help move this agenda along."

We actually are in a nice position to have put in place processes and then have the ability to get back quickly on an ongoing basis with areas where gaps can be filled and addressed and get going on it. Our hope is that we will really steepen the curve of progress, not just in diabetes but in a number of other areas.

V. Roddick: Madam Chair, as I informed you prior, I'm going to have to leave now.

I just have two quick questions. One is to the auditor general. On your handout to us with the slides, on page 10, on the middle one, dealing with secondary prevention, you were saying there is no organized process to deliver research-proven services to prediabetics. I assume by that you mean the at-risk groups. What I understand from the presentations and the report is that both groups here are pretty well together on the fact that the general population in terms of education and targeting for obesity and smoking and physical fitness…. You agree on that. I assume you agree to an extent on the diabetes management.

I'm trying to understand just what you mean by "secondary." Maybe they just kind of merge one into another or something. If you could give us some examples of what you mean by an organized process to reach those sorts of target groups…. When do you flow from one to another?

K. Lane: If you look at our general flow diagram on page 18 of the report, it may be useful. The point is that the essential, underlying biochemical change in diabetes is increasing blood glucose levels. It's a slow creep upwards. As the levels go up, the risks increase. We define diabetes in a technical sense as at the level at which some of the important complications such as eye damage and kidney damage kick in. That doesn't mean that being just below there is a good thing to be. Secondary prevention is looking for people who are creep-

Now, the problem is that we have a well-designed system for dealing with people when they come in sick. That's often when the complications turn up. There are two groups of people we may not catch. One is the undiagnosed diabetic who technically is above the level but doesn't show complications yet, and the other is the person who's below that level. They don't present to their physicians. They don't come in and say: "Check me out just in case."

The first problem you have with secondary prevention is finding those people. There are things such as free testing in malls catching people or going out to workplaces or targeting groups who are at risk, such as going to old-age groups or first nations groups. In each of these, you're looking at a relatively small percentage of people who would benefit from treatment. You have to find a cost-effective way of finding those people. Once you've found them, then you have to have a method for delivering the care. The care is not, in many pieces, what we would think of as medical care. It's not things that physicians, GPs, are talking about. It's basically counselling on diet and activity, with lots of support. It's more like the kind of thing you'd find in a health club or a community centre.

First you have to find them, and then you have to deliver that service. Now, it's not wildly expensive, but it's not things that we would consider a medical care cost. It might be $600 or $1,000 a year per person, but it doesn't fit right in with what GPs do or with what hospitals do, and it's more controlled and managed than what you'd find in a rec centre. That it's in between is the problem.

G. Halsey-Brandt: So what you're saying is that if I go for my annual medical or something…. It would be one of the checkpoints on the list that the MD might check for in terms of measuring your glucose levels.

J. Kwan (Chair): Mr. Halsey-Brandt, sorry. Before you go on, I think Dr. Ballem would like to add something to that answer to your question.

P. Ballem: Yeah, I would just like to add to that. In fact, the literature is quite clear that the body mass index is one of the best high-level screening things that everybody can actually do for themselves if they know how to do the calculation in terms of a risk factor for type 2 diabetes, which is where the big growth in diabetes….

I think the auditor general quite rightly pointed out that type 1 is fairly stable but type 2 is where we're getting all the grief. It's absolutely related to obesity and people being overweight. So really, you don't need a blood test. If we start with that, we're going to spend a lot of money unnecessarily. In fact, if every employee wellness program and every school nurse and teacher — basically everybody — were taught how to calculate their body mass index or how to measure their waist in relationship to their hips, you would very quickly, with a home remedy, know who's at risk. Then you can follow through to look at the specific risk of diabetes.

Those same parameters put you at risk for stroke, heart disease and all kinds of stuff. So I agree with the auditor general's staff that there are some very, very inexpensive ways that we can start to educate the public and help them self-identify. Then I think the question is: how do we galvanize communities to get them into programming and activities that are going to help them understand how to make healthy choices for themselves?

My second question is to the health people. On page 14 you mention about B.C. general practitioners receiving a yearly bonus for each diabetes patient receiving care consistent with the guidelines, which I thought was revolutionary and rather fascinating — to pay doctors to keep people well, which I think should be the system. Is that part of that general practitioners…? I think you mentioned a service committee, the $7 million…?

P. Ballem: Yes, it is. That was an initiative that we started with the general practitioners services committee before the last agreement. With the last agreement, we kind of bumped up those kinds of initiatives and opened up much more in the way of opportunities to do that kind of thing.

B. Bennett: This is a question for Dr. Ballem. In the auditor general's report, they divide the diabetes question into the three different stages — primary, secondary and disease management. In your presentation to us this morning I think the first 21 pages of 27 dealt with everything but primary care. It's really only the last couple or three pages that deal with primary care. The actual recommendations of the auditor general are altogether to do with primary care and prevention; they're not to do with the other two stages.

I think I heard you saying that the response to this disease has to be across government. We all know that when there is a problem that no one ministry feels is their total responsibility, sometimes there can be some confusion and even sidestepping in terms of who is ultimately responsible to manage the problem. I see this as something that government has to get a grip on.

My question to you is: does the Ministry of Health Services accept responsibility for the management of this disease, including the prevention side? Does it see itself as the ministry that should take the lead on this and that should try and line up the other ministries and so forth to do what's necessary?

P. Ballem: I would say the answer to that is yes, primarily since we are the Ministry of Health Services. As you can see, if we can't manage the resource implications to us in terms of health service delivery, from not having the upstream prevention strategy be successful, then we will find it very difficult to do our job.

But I think for a number of other reasons…. We have the provincial health officer, who as you know, is affiliated with our ministry and is an officer of the Legislature. He has a responsibility to report on health status and disease surveillance. First and foremost, you know, we support the provincial health officer in basically bringing to the attention of the Legislature health status indicators that would show you the story of the rising incidence of physical inactivity and obesity and the issue of diabetes as part of our burden of disease.

We have a very active prevention strategy. What is out of our control is the ability to make some decisions in other sectors that could actually really benefit us. For instance, in municipalities how they organize and fund their recreation communities and programs can have a huge impact on the success of getting a community involved in recreational activities that actually lead to physical fitness and keep their public active. We don't have jurisdiction over that, but we certainly can and are playing an active facilitation role and helping them see that they can be a big player on the health agenda by understanding the relationship between what they do and health status and the determinants of chronic disease.

I would say yes, we see ourselves as being responsible to facilitate this. We're not responsible for making all the decisions that need to be made to be successful, but we will do whatever is necessary to try to align other decisions with better health outcomes as the final sort of goal that we're all working towards. I think, to speak to that, the work of the Select Standing Committee on Health was enormously helpful to us, because the committee actually articulated how important it is for every part of government at all levels — not just the provincial government but the federal, provincial and municipal — to take an active part in this. Good health outcomes and health status are one of the fundamental measures of a healthy society.

We're happy to facilitate, be the leader and do what we can within our own mandate and then encourage other people to get on board and help us out.

R. Hawes: I actually have two questions. One is kind of technical, but I'll ask the first one first. That's with respect to the benefit side — prediabetes indicators.

Dr. Ballem, you said that the blood test is an indicator, I guess — the glucose test. But people who are at higher risk with other factors should know that and do something about it early. The reality is — and I don't think I'm atypical — that I am probably one of the ones in a high-risk category. I have had glucose tests, and I don't have a problem with diabetes, so I haven't done anything about it. There are thousands of people like me who, just because they're in a high-risk category, don't just jump to what the government says they should do. Maybe they should, but they don't.

But the reality is that if there were a glucose test that indicated a problem coming, I think that's what galvanizes some people. You mentioned on slide 13 that P3 partnerships are one of the things you're looking at. I know, having talked to the B.C. diabetes society…. I had a discussion with them with respect to things like the blood pressure testing that's in drugstores — you know, that machine that's not all that accurate. But really, as an indicator, if you take that test and you're high, it might drive people to at least get checked or talk to somebody.

Glucose testing in drugstores, the same type of thing with the strips…. My guess is that the B.C. Pharmacy Association would be interested, I'm sure, in providing that kind of testing. I'm sure the manufacturers of the strips would probably even supply them, because it helps them sell their product, I suppose, at some stage. Have we looked at things like that — those kinds of partnerships, making that kind of testing available on a much broader basis through drugstores at all times?

P. Ballem: We've had some interesting discussions with a number of different partners. We have a very strong relationship with the B.C. Pharmacy Association and the Association of Chain Drugstores. Similarly, I think you know we have a very strong relationship with the Diabetes Association.

I think one of the things that is important for us to do is try to figure out how you galvanize people to actually make healthy choices even when, as you've described for yourself, you may be at risk, although your glucose test doesn't show that you have any of the early signals of diabetes. At the same time, though — and this goes back to why we've chosen to look at overall chronic disease management — you would carry a risk, however, for heart disease. If we were to be able to wave a magic wand and look at people's blood vessels, what you see is that silent changes that actually don't become apparent until you develop symptoms are happening all the time across youth and young adults and our middle-aged and seniors.

I think the key thing is: what are the major risk factors that everybody can kind of have a look at themselves? If there are some other things that partners in the private sector can actually help provide to incent people to think about these things, that's great. With some exceptions, we present no barriers to that kind of thing. But I think what's really important for us to do is to look at what some of the key, really cost-effective things are that people can do in their own home and then how they can understand what the different risk factors are that they have. It's true: if you don't have an abnormal blood glucose, you still are at risk for diabetes, but it's not as apparent as if your glucose was a little bit up. On the other hand, we would know that just those measurements on you would say you are at a

very significant increased risk for heart disease. That, as well, is something you can get from diabetes, but you can get it on its own.

We're trying to get the public aware of all these different risk factors across the spectrum of chronic disease and help them then figure out how you get them to make the healthy choices. Galvanizing that is the key.

R. Hawes: I don't have a problem with your answer except that it didn't really answer the question that I had, which was: in addition to those tools, would the ministry not be interested in discussing with the B.C. Pharmacy Association and whoever — the manufacturer of the strips and whatever — a broader availability of that kind of testing? I mean, all the other things are great, and they should be carried on, but that's just an extra tool. It sounds like we're not interested in pursuing it, and I'd be disappointed if we weren't, because if there is an interest — and I'm sure there is — on behalf of partners that we could reach out to, there's no cost to it to the government.

P. Ballem: I think, though, with respect, member, that we're very interested in talking with partners about these things. One of the things I think people don't realize is that, for instance, you pursue something like that…. Sometimes if you do, for instance, a glucose strip test at the wrong time…. Someone comes in after lunch, and they do a glucose strip test. They may spill some sugar. Whether that's of any significance, you have to go through quite a series of things to actually understand it.

So yes, we're very interested in talking to our private sector partners about things like that. The one thing, though, we have to make sure of is that it's specific enough that it doesn't end up sending everyone to their doctor and to a whole multiple set of tests that could have been avoided if we actually structured it properly. Within those confines, we've very interested.

R. Hawes: Just a comment. I think the pharmacists of this province who are, I believe, as potential consultants, grossly underutilized…. I really do believe that most people could be advised to talk to their pharmacist first, who would explain. I'm sure they would be happy to do that — to consult someone and say, "You should be alarmed; you should go for further tests," or whatever.

My second question, and it's my last one, is really very technical. Slide 9 — I think it's slide 9 — shows that 25 percent of the angioplasties performed in this province are for people with diabetes, and 32 percent of coronary bypasses.

R. Hawes: Now, my understanding, having met with a company called Angiotech, is that for people with diabetes and certain racial minorities, angioplasties are subject to a very high rate of failure unless the stents that are used are treated with taxol or whatever they use. It's my understanding that we don't fund that treated stent in this province. I'm wondering, within these stats then, how many of the people in the 25 percent angioplasty category actually move on to the second category because they have a failed angioplasty because they were already at a high risk for failure because of the disease. Reanastomosis is apparently at much higher prevalence in people with diabetes unless they use a treated stent. Is that not correct?

P. Ballem: We actually do fund a significant number of drug-eluding stents in this province.

P. Ballem: We have the criteria that are basically the evidence-based criteria that the province has agreed on. I can't give you the very specifics of them, but they will be the best-practice criteria for who gets a drug-eluding stent. What we know is that that is an area of practice that's evolving very quickly. Basically, we're trying to keep up and ahead of that practice evolution to make sure that people for whom the evidence is very clear that they will benefit from a stent that is many, many, many times more expensive than a regular stent…. We're basically making our best effort to make sure that they would get it, if that's what the agreed-upon evidence says.

R. Hawes: Would we have a stat that would show the number of people in the 25 percent…? That sounds really high to me. The 25 percent that have moved on to the 35 percent, that have had both the angioplasty and the coronary bypass….

P. Ballem: Actually, the indications for coronary bypass are getting smaller and smaller now. In fact, coronary bypass surgery is an area where the indications are basically more and more limited. I can't tell you at this point in time…. It would take me a while, through our cardiac registry, to be able to say that these people failed angioplasty and went on. Usually how it works is that people present, and they're put through a lens of: what are the interventions that would work for you? It's usually not a progression. They usually go straight to coronary bypass or angioplasty. If you would like that information, I'll ask the PHSA to see if they can provide it for you.

R. Hawes: And the only reason I'm asking is that when Angiotech tells me, anyway, about the high failure rate with angioplasties, with the non-drug-eluding stent…. Apparently, a lot of people with diabetes were getting angioplasties without that type of stent. If they are moving on to the 32 percent, the cost factor alone would say that all people with diabetes should automatically be treated with the drug-eluding stent, and that may decrease your 32 percent somewhat.

I'm just wondering. If the two are tied together, it would be very easy to see what the cost benefit of that is.

P. Ballem: I think the key thing is that we, as you know, across all of our pharmaceuticals and pharmaceutical-related devices, try and use the best evidence to make our best decisions, and that's what we continue to do in this particular area.

R. Hawes: I'll talk to you at another time about another discussion that I had. Thanks.

J. Kwan (Chair): Thank you very much. I have a few questions, and then I have Mr. Nuraney. If committee members are fine, I will stay in the chair and just ask my questions of our witnesses. Okay, I see heads nodding, so I'm going to proceed and stay in the chair and ask my questions.

I would just like to follow up on the question that was actually asked by Ms. Stephens about the 81 educational centres that provide services. Part of the response was also that there is amalgamation going on. I'm wondering if it's possible for the committee to get a list of where the 81 centres are, what services they provide and what the amalgamation looked like before and what it looks like now in terms of that specialization — just so we get a sense of it in terms of what the services are.

J. Kwan (Chair): Thank you. The other question that I have follows on. Several members asked questions around the practitioners receiving this yearly bonus to ensure that each of their patients in turn received consistent care with the B.C. diabetes care guidelines. I don't know if I heard the answer correctly. Is it the case that there are about 1,000 doctors that are on that program right now? Do they have to sign on to it or register somehow in order to receive this bonus? How does it work exactly, and how much do they get?

V. Tregillus: The physicians, after they've provided evidence-based care for one year, submit a bill, and they receive $75.

J. Kwan (Chair): Per year. In turn, then, what the ministry does is provide them with a guideline, and they work to ensure that their patient is receiving consistent care per the guideline, and that goes across the board for other chronic diseases.

J. Kwan (Chair): How many doctors do you have that are participating in this program right now?

V. Tregillus: Yes, it is. In the PQID process, where we've been going around the province, we've been checking with doctors who are billing for that payment and with doctors who are not. In the cases of the doctors who are not billing, they talk about not being able to get their patients into the protocols. It's quite an intense protocol to have patients correctly followed. Patients aren't used to it either. They've been used to coming to the doctor perhaps once a year and not having their A1c's checked and not really taking an active part in managing their disease. It's really a tremendous shift of the system for both the physician-led team and the patients. For some doctors in some areas it has been more difficult than others.

J. Kwan (Chair): Do we know how many patients, on a ratio basis, are not following the regime that the doctor prescribed to them? Do we have a sense of it? I'm just trying to figure out how much of it is the doctor's problem and how much of it is the patient's problem.

V. Tregillus: What we have concluded from all the evidence and all the investigations is that it is a systems problem. It goes from public attitudes right through to very highly sophisticated technology and how we've organized ourselves in the past as health services and how we're now organizing ourselves. It's a complete modernization of approach. As the auditor general suggested earlier, it's a complete switch. It's an integrated approach, from public education right through to the way hospitals do discharge. It covers everything.

V. Tregillus: Yes, they are. In fact, they are engaging small groups of physicians — around 12 at a time — in all the different regions of the province. They're engaging them with the electronic….

V. Tregillus: They're engaging with these doctors using the electronic toolkit and showing doctors how they can go through their charts, audit care that they're

giving to the patients and improve that care. The feedback is that doctors are…. This is a tremendously different role for the college, and I think doctors are really responding to that role.

I'm wondering. On the slide from the auditor general's office that talks about…. As we know, the visible minorities community as well as the first nations community are at high risk for diabetes. I know that there was some mention about trying to assess that a little bit better — trying to develop programs towards those targeted groups. I'm wondering: from the ministry's point of view, what have we done in this area? What kinds of programs do we have in place to try and target awareness, education and prevention, as well as treatment, for this particular segment of our population that's different from the larger overall population?

P. Ballem: This is a very important issue for our province. As you know, we have one of the most diverse populations of anywhere in the country. This is an area where, at the level of the health authority, we have made clear to them that we want them to understand the subpopulation health inequities they have in the population they serve. It's not enough for them to just say: "Overall, our population is healthy on the basis of X, Y and Z." We actually want them to go down below that and understand that perhaps their South Asian population may be at a disadvantage in certain areas, or their aboriginal population may be at a disadvantage.

One of the challenges that we have is actually trying to get that kind of population health data. We're very fortunate in this province in that we have that data for our aboriginal community, because we're one of the few provinces, through our MSP premiums, that has a flag that identifies a status Indian, for which the federal government pays the premium. That's why Perry Kendall, as our provincial health officer, has probably the best data in the country around the health status of our aboriginal community.

When you go beyond that, it's very, very difficult to be sure that, you know, you're capturing data on a subpopulation. We need to be working very closely with those different communities about how they would self-identify and how we actually get some of that subdata.

I worked for a number of years on the whole issue of cervical cancer, which we know was, in our Chinese immigrant community, a very significant issue. Really, it was only through working backwards through the Cancer Agency and just looking at the names of people that you could actually identify them. We don't have a process anymore in our health care system for people to identify their ethnic origins. That's one of our biggest challenges in terms of identifying those subpopulations and their risks.

What we do now is…. From the literature and from countries of origin and work on immigrants coming from countries of origin to Canada and North America, we know that their risk would basically go up in certain areas. Then we just take a community-by-community approach. For Vancouver coastal, which has a huge South Asian and Chinese population, their job is to be able to work on their chronic disease prevention strategies and show that they are culturally specific. It's best done at the level of the health authority, because they've got the practitioners and the programs in their public health system around prevention that, by definition, have to work with those different subgroups.

The ministry's role is to help provide the information to say, "These groups are going to be at an increased risk," and to make sure that the health authorities are moving forward on that. That's the way we've tried to approach that.

J. Kwan (Chair): When you say "culturally specific," am I understanding, as well, that it's language-specific?

J. Kwan (Chair): Just a further question. The health authorities, then, really take on the tasks, if you will, of getting programs up and running and so on. Do we have any sense of the breakdown of what programs they do have in place? Do we know?

I mean, I don't expect that you have that list of information here, but is that something that the ministry has that could be shared with the committee? I'm just curious, because if we know that these communities are highly at risk…. I understand the difficulty in trying to reach into the communities and all the different barriers in place, but at the same time, what measures do we have in place? What are the programs that are out there that are language-specific and culturally specific and so on? It might be able to give us a bit of a measure in terms of what's going on.

P. Ballem: That's an important question. Maybe I could start with the ministry. We've done a lot of work in the B.C. HealthGuide program and have embarked on a course of not just translating the HealthGuide into a number of our most common other languages in the province but actually doing the work, which you know is so important, of making it culturally appropriate. I think some people don't understand that you can't just translate something like the B.C. HealthGuide and it's going to be helpful. We've embarked on that.

We also have the NurseLine, which provides translation services for over 100 languages. Right away, for our broad community in the province, they do have access to nurses who can speak to them — and, in some cases, pharmacists — in their own language.

At the health authority level, one of the expectations in the performance agreements that will be going out after the budget will be that they actually do an

inventory of what they're doing at the community level on the health promotion and prevention public health side across the core program areas that we will be establishing for public health. That will be the first time since we've had the new health authorities that we will have a comprehensive idea of just what they are doing. Addressing the culturally specific activities will be a part of this inventory that we've asked them to do.

P. Ballem: Well, we would normally expect them to be back to us within a month of them getting our instruction letter. It may be that that will take a bit longer, because there are a number of things that they…. I would say that within the next four to six months we will have that information.

J. Kwan (Chair): I have a question, also, about if the ministry is looking at the overall implications — for example, the government's delisting of optometry care and whether there are ramifications in relation to diabetes. For example, we know that eye care is hugely related to one of the side effects of diabetes. Whether or not early detection and those issues are impacted because of that delisting or, alternatively, even the change in policy with respect to who could actually give eye exams…. There's all that discussion about opticians — that change, in terms of eye examination and the ramifications, if any, for chronic diseases such as diabetes. I would expect there would be some. Has there been any analysis done, or is the ministry undertaking any analysis around that?

P. Ballem: Actually, we've done quite a lot of extensive work on that. Just to be clear, the deinsuring of regular eye exams across the board that happened in January 2002 was done within a framework whereby if you have diabetes, you absolutely would qualify. I mean, there are certain indications for people to have a reimbursed eye exam. It's perfectly appropriate for a patient with diabetes to actually have their eyes examined regularly. That is still covered in the MSP fee guide. What we are not insuring is, basically, people who are healthy, who have no significant risk factors, to just go and get their eyes checked. That is what has been deinsured, just for adults. As I think you know, children — I believe age 18 and under — and seniors still remain with their eye exams insured.

The second thing is in terms of the issue of automated vision testing or automated refraction testing — which is something that we are considering in terms of the development of policy — where opticians now have access to technology that allows them to do a very robust examination of vision. We're looking at what role that might play, but always in the very clear context that anybody with something like diabetes would not be eligible to have that if they had not also had an accompanying ophthalmologist or optometrist eye health exam.

It's really important that access to that kind of technology has to be in a context where people might think, if they had their vision tested by this computerized machine, that everything is fine, when they actually have an underlying condition that would put them at risk for other kinds of eye health problems, like a retinal problem in the case of a diabetic. They would not have access to that testing without someone having the whole look at their eye to say: "Okay, you can go have your vision tested this way. In the meantime, I've checked your retina, I've checked you for cataracts, I've checked your lens, and everything's fine."

It's complicated, but the ministry…. If indeed at some point the government, in working with the optometrists and opticians, decides to move forward with a policy, it would only be with those safeguards in place.

J. Kwan (Chair): One last question. You mentioned, for the delisting question as well as the new technology for opticians and so on, that if it's to be used, it would not apply to people with diabetes. However, as we know, there are a number of people who are not diagnosed who might be at risk and who might actually have diabetes and not know it. But they are not covered — right? The question then becomes, for that group of people…. If you're diagnosed, it's one thing, but if you're not diagnosed, early detection through these other services…. Would it help — as part of the strategy in identifying people who ultimately may have diabetes and, therefore, minimize risks to them as well as health costs down the road — if that early detection comes into play through these other measures? That's the question mark that I'm wondering about.

P. Ballem: Okay. A good question. An eye exam, though…. If you look at the kinds of changes that diabetics get through their eye exam, that would be a fairly late presentation of diabetes. When you get retinal changes from diabetes, which is what you would pick up on an eye exam, that individual has had diabetes that's been undiagnosed and untreated for a fairly long period of time. They're in a tertiary stage of their disease.

I think that in the case of eye exams, that probably would be really one of our poorest upfront primary and secondary screening techniques to detect early diabetes. You would want to go the way of body mass index or even some kind of blood sugar marker. By the time they actually would be picked up in a full eye health exam by an optometrist or an ophthalmologist, they're well down the road. Their family doctor would have missed some important earlier signs on that.

J. Kwan (Chair): One real last question: is the Mount St. Joseph Hospital diabetes clinic still operating? They specifically target the ethnic community. Particularly, I know, in the Chinese community they've been very important to them in that service.

P. Ballem: Right. I can't answer that, Madam Chair, but I'd be happy to get back to you on that.

J. Nuraney: As most of you know, I'm a late addition to this committee. My question really is to educate myself on this issue.

The report that the auditor general has prepared and then the presentation from the Ministry of Health Services tell me that most of the concerns raised in the report are…. The ministry is well aware of all of them, and the initiatives that are in place address most if not all of the recommendations that the report has presented.

The question I ask of the auditor general is: how does he choose his subject matter of reporting? Does he consult with ministries prior to undertaking such a vast and, I'm sure, costly task?

W. Strelioff: Thank you for the question. Yes, we do consult with the ministries. The reason we did this one is because it causes lots of suffering in the community, it's a major cost driver for the health system, and it's becoming more common.

Focusing particularly on that second factor — that it's becoming a major cost driver for the health system — we decided that's an issue that we should examine to find out how well we're doing in B.C. Of course, as we explore alternative focuses for our examinations, we also have discussions with officials within the health system to see whether this is the right focus for our work within our limited resources. Certainly, there's been lots of discussion about actions underway. We still have a long way to go.

J. Kwan (Chair): Mr. Nuraney, just for your information, the auditor general's office also makes a presentation to the Public Accounts Committee members with respect to the workplan for the following year. They do that when they have that work available and ready to go for the following fiscal year. They make that presentation to the Ministry of Finance as well. Just for your information as a new member of the Public Accounts Committee.

J. Kwan (Chair): That's correct. It's a full workplan of what they intend to do for the year. We would have that on record, if you wish to go back and look at that.

J. Nuraney: Just two more questions, Madam Chair. How much would a report like this cost?

W. Strelioff: Most projects like this cost about…. If you took it as a proportion of the total expenditure of the office rationed by the time we spent, about $250,000.

One of the recommendations that your report has made addresses the cabinet — advice to the cabinet. I'm wondering: is it part of the mandate of the auditor general to recommend policies to the cabinet?

W. Strelioff: As we said in our presentation, our focus for these recommendations is a little bit different than usual. The topic of chronic disease management, we determined, required a multi-pronged approach. It couldn't be addressed only by one ministry with specific actions. It really was a priority question for legislators and cabinet.

As you recognized, this is a different approach to our recommendations. We moved them to cabinet because it requires more than one agency to come to the table, and it also relates to priority-setting for resources. So we said: "Cabinet, to the extent that you want to take action on this, it has to be led by you."

J. Kwan (Chair): Thank you very much, Mr. Nuraney. Are there any other questions from committee members at this time?

Seeing none, thank you very much to all of our witnesses for the presentation and the information it provided. For the information that's been requested, I wonder if that could be forwarded to the Clerk's office, in which case, then, the Clerk's office could copy it to everyone on the committee once they receive it. Thank you.

Committee members, the recommendations are before you. I'm going to canvass committee members in terms of what action we should take with respect to the recommendations from the auditor general's office.

At this point we're running a little bit behind time based on our estimated time of one and a half hours for each of the items, with the exception of the last one — for it to have an hour. My suggestion is going to be this: lunch has been served at the back of the room. I wonder if we can continue with our agenda. Committee members could feel free to go to the back of the room — and the witnesses as well — to help themselves, and we'll just carry on with our agenda.

I'll remind committee members at this point that if we follow the timing as suggested of one and a half hours for each of the items, the second item will take us to 2 o'clock, the fourth item will take us to 3:30. That would mean that for the fifth item, on the report to the House, we would only have half an hour and that we will have no time, basically, for other business.

I'm going to just be a little bit vigilant. Although, it's not my practice to cut anybody off — and it's certainly not my intention to do that — but to remind people of the timing every now and again.

B. Bennett: I think that sounds like a solid plan. The only thing that I would suggest is the presenters ought to bear in mind the total amount of time that we have, and we really do need to leave some time for the committee.

J. Kwan (Chair): Thank you very much. Presenters, you've heard the comments, and we're all in agreement.

W. Strelioff: As we make some transitions in terms of who makes the presentations, I'd just like to bring to your attention that with us today are a number of people from our office that I've invited to attend this meeting as part of their orientation to watch what happens to our work and reports when it reaches the stage of committee deliberations. So they're here to witness how committees deal with our reports as well as part of their orientation.

I'd like to draw your attention to one guest — his name is Ho Shim — who has just left. I'll keep on going anyway. Ho Shim is from Korea. He's with us for about a year and a half. He works at the board of audit inspections with Korea. He's the second person that we've had working with us. For about a year and a half the earlier person worked on one of our environmental audits, contaminated sites, and after the year and a half, he went back with his family to Korea and now is working there.

There is Mr. Shim. He start about a week or two ago. He's going to be helping us focus on capital projects and capital project management, because that's his area of expertise in Korea. Then after a year and half he'll return with his family. I'd just like to welcome Mr. Shim — who has left again; no, he's still there — to Victoria, B.C. and Canada.

Now, the second report that you're dealing with today is called Internal Audit in Health Authorities: A Status Report. In the case of health authorities a strong internal audit capacity can assist the boards of directors to ensure their organizations are managing public resources and delivering their important services in the best manner possible.

With this in mind, when I found out that the boards of directors were actually setting up internal audit functions, I decided to examine what was happening, with the view of encouraging them to do so. Just like the private sector, a strong internal audit group is an important ingredient to a well-performing board of directors and to a well-performing organization. Boards need the capacity to initiate examinations directly and to do so independent of management.

We wanted to support and help ensure that internal audit groups are established properly, with solid mandates independent of management; that they report directly to boards of directors; that boards directly oversee their work program; that internal audit groups build the right capacity; and that they have full access to all information. The B.C. provincial public sector has pockets of strong internal audit groups, but in general the state of internal audit has not been well supported. Internal audit groups can support continuous-improvement thinking throughout an organization.

In addition, within the health sector internal audit groups can help organizations ensure that they have the decision-making information required to link costs, strategies and results and carry out specific examinations, such as whether physicians are delivering the services contracted for. Is the internal performance information reliable — for example, financial, waiting times, infection rates? Is access to electronic information processing secure? Are construction projects on schedule, on budget and delivering what is expected? Are food services safe and clean? Is access to drugs secure?

D. Lau: Good afternoon, committee members. The following presentation reviews our report, Internal Audit in Health Authorities: A Status Report. During this presentation I will provide some background information, the purpose and overall conclusion and our detailed findings.

We carried out this review because the health authorities are significant players in providing health services to taxpayers. The table shows that as of March 31, 2004, they held assets of $4.1 billion, had revenues and expenditures for a year of about $7.7 billion and employed about 96,000 people.

Health care services are complex, and the authorities have to deliver them over large geographical areas. The boards of health authorities need assurance that health needs in their regions are identified and met efficiently and effectively through properly funded and managed programs. Internal audit is one of the key vehicles that the boards can use to help them carry out their responsibilities.

The Institute of Internal Auditors define internal auditing as "an independent, objective assurance and consulting activity designed to add value and improve an organization's operations." An internal audit "helps an organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and im-

Internal audit work can cover all aspects of an organization's operations: internal audit reviews, reliability and integrity of information, compliance with policies and regulations, the safeguarding of assets, the economical and efficient use of resources and the operational goals and objectives of an organization. The internal audit function serves not only the board and management but the whole organization.

The purpose of our review was to evaluate the extent to which health authority boards and management are using internal audit in carrying out their responsibilities. In our report we organized our findings around three main questions. Do boards and management use internal audit effectively? Do internal audit groups have the appropriate capacity to be effective? Are internal audit groups effective in performing their responsibilities?

Our overall conclusion was that the health authorities have recognized the importance of internal audit and have either set up internal audit groups or are in the process of doing so. The boards have set up good processes to oversee internal audit activities. The internal audit units established have been provided with the appropriate style of funding and have recruited qualified staff. The internal audit groups are proceeding along the right path and should soon be able to serve the boards and authorities effectively.

For the first question, which considered whether the boards and management are using internal audits effectively, we found that all six boards have decided to set up an internal audit unit in their respective authorities. At the time of our review, four of the authorities hade internal audit groups in place, while the other two were in the process of establishing the function.

The four authorities with internal audit groups have drawn up comprehensive audit charters, which address all significant areas of operations except for clinical risks. The internal audit groups all report to and have direct access to their boards, which is consistent with best practice for achieving independence from management. All the boards have delegated responsibility for overseeing internal audit to the finance and audit committees. These responsibilities include hiring, evaluating and replacing the head of internal audit; approving general audit plans; making proposals for specific other projects; reviewing audit reports; and approving internal audit resources.

The second question considered the capacity of internal audit groups. It found that all of the heads of internal audit have the appropriate professional qualifications for the position. Occasionally, special skills and knowledge are required. The internal audit groups' annual plans generally include the use of outside professional services. Funds have been included in the individual budget for that purpose.

The internal audit groups in the authorities have recognized that there are great benefits in cooperating and sharing experience with each other and have formed a peer group to meet quarterly. The requirements of professional standards, the complexity of the health care system, regulatory requirements and changes in technology drive the need for ongoing professional training. The boards generally support and have provided funding for such training.

The resources allocated to internal audit groups were sufficient for startup purposes. The boards recognized that resourcing needs should be reviewed in future. Each of the four established internal audit groups have prepared an annual audit plan, but only two of them have prepared multi-year audit plans. The others recognized the need for such plans and were in the process of preparing them.

All of the internal audit groups have adopted the standards established by the Institute of Internal Auditors in carrying out their work. Few projects have been completed and reported to date, because the groups were established only recently and had to spend considerable time getting established. We found that two authorities' audit charters require audit follow-up. In other authorities, there is expectation by the boards that follow-up reviews will be carried out.

The third question considered whether the internal audit groups are effective in performing their responsibilities. They found that because the internal audit units are still in the startup phase, they have not yet reached the capacity to be as effective as they could be. Not all of the groups have developed performance measures or reported on their performance. It is important that the finance audit committees work with the internal audit groups to select measures to evaluate and report on their performance annually.

Another way to obtain performance information is to carry out a self-assessment and have it validated by an independent, qualified person. All the authorities recognize the benefits of external reviews and are considering how to do so.

All of the health authorities are moving in the right direction with respect to having an effective internal audit function and should obtain significant benefits from their internal audit groups in the future. We encourage the boards of the authorities to continue to monitor their internal audit groups and ensure they conduct their activities in accordance with best practices.

Our report contains a summary of best practices for internal audit groups by these five headings: roles, responsibilities and authorities and board oversight of internal audit; resourcing the internal audit function; planning internal audit's activities; the audit process; and evaluating internal audit performance. These are based on a review of a number of best-practices guides and other reviews of the internal audit function. They encourage government organizations that are planning to establish an internal audit function and those that already have one to use these best practices. That concludes our presentation.

As you might notice, we have no recommendations within this report. Unless you choose to make your

However, as David noted, we do set out a summary of best practices and ask boards and internal audit groups to refer to this summary as they further develop their capacity. We have also made available our report and the summary of best practices to other boards of directors or governors, including universities. That concludes our opening comments.

J. MacPhail: On one of the background slides, the third background slide, it says IIA defines…. I'm sorry; I missed what IIA is.

J. MacPhail: Okay. Thanks. What's the law around this? Is there any law around this, any legislation requiring this?

W. Strelioff: Requiring the best practices to be used by boards in setting up internal audits?

J. MacPhail: This is about the effective use of internal audits. That's what the report is about. You've made some very good recommendations around best practices. Is it voluntary that the boards do this, that the authorities do it, or is there legislation requiring an internal auditing process?

W. Strelioff: It's voluntary. It's good practice, but some boards do not create robust internal audit groups. When I saw the health authority boards consider doing this and beginning to actually set up internal audit groups, we decided to carry out an examination to encourage it.

K. Johnston (Deputy Chair): On the slide on your page 3, you talk about effective use of internal audits. The second bullet talks about mandates addressing all key areas of operations except clinical risks. Could you expand on that for me? I think I get the drift of what clinical risks are, but when you're setting performance standards for the internal audits for the health authorities, what exactly are these key areas? Could you just…?

W. Strelioff: Our report focuses primarily on examining whether they were examining financial management issues and compliance with legislative authorities issues. We did not focus on the extent to which internal audit groups or boards are asking their internal audit groups to look at clinical practice issues — for example, infection control. One of the health authorities — I think it's the interior one — actually asked their internal audit groups to look at infection control and were very positive about the results.

In our examination, though, we were focusing on organizations that were just beginning to set up internal audits and, as a starting point, looking at some of the basic financial management and information-gathering roles that an internal audit can take.

K. Johnston (Deputy Chair): Yeah. I was trying to get a sense of actually what they were looking at internally. If it's not clinical, you know, I mean…. Would we be looking at the kitchen, or…?

W. Strelioff: Go to page 43 of our report. There's a whole series of examinations that have been taken on by internal audit groups under the subtitles "Internal Control Reviews," "Financial Control Reviews," "Information Systems" and then "Other Types of Examinations."

There's another use of internal audit, and that can get into clinical practice as well.

K. Johnston (Deputy Chair): Yeah, that's why I was sort of going with it. I was wondering. You know, I think that would be more useful in the long run than some of those other matters.

Secondly, is there going to be a consistency between the various health authorities — I think you mentioned that you put some best practices forward — so that there's a common benchmark, if you will, as to what everybody's looking at, all the individual authorities?

My understanding is that the internal audit groups…. There are only six health authorities. They actually are beginning to meet and communicate amongst themselves and also share the best practices. Also, when we meet with boards of directors, we point to the best practices that the boards of directors — particularly the audit committees — should look to when they are reassessing their relationships with internal audit groups and how best to direct their work program.

Madam Chair, there's just one thing I was wondering about the agenda. Are we getting somebody from strategic initiatives and corporate services from the ministry to talk to us as well, or are we just asking…?

W. Strelioff: Madam Chair, there is a person from Health Services: David Woodward, deputy minister.

K. Johnston (Deputy Chair): Okay. I just wondered if they're making a presentation. That's all. Thank you.

J. Nuraney: As a part of the internal audit structure, would you or would somebody be looking at an economic benefit of contracting out services?

W. Strelioff: My understanding of that question is that there could be two ways. One is that when a board establishes an internal audit group, they can hire their own people to a certain extent and contract for expertise when the internal audit group needs it because the examination practice moves into clinical practices, a skill that is not there. Or does the board actually look to contract out the whole internal audit function? Is that…? No?

J. Nuraney: Specifically, say referring to Bill 29, for example, where the services were contracted out by the hospitals.

J. Nuraney: The actual economic benefit — would that be a part of the internal audit structure or not?

W. Strelioff: It would be up to a board, but I would assume that a well-functioning board carrying out its due diligence…. Before it decides on a specific initiative that is important, it can ask its internal audit group to examine whether the contracting-out is the best approach in terms of cost and benefit. So it would be one of the tools available to a board to help them make those decisions and also, once the decision is made, to monitor whether the promises that were put in place in terms of the contracted-out service actually are realized. So internal audit is one mechanism that a board can use to do that.

J. Nuraney: So we could perhaps direct our questions to those boards, with the specific requests. Could we?

W. Strelioff: My understanding of the question is that you could ask a board of directors: what due diligence have they done before making a particular decision? Then, to what extent have they used their internal audit capacity to help them make that decision? Is that…?

L. Stephens: Mr. Strelioff, did you find in your study that perhaps the health authorities were concerned more about the inputs than the outputs?

W. Strelioff: Members, I think most organizations are having a difficult time identifying outcomes and outputs that relate to those outcomes, and then how to align their programs and strategies to actually make a difference. Most organizations, including the health system as well, are having a difficult time coming to grips with those kinds of questions — period. So the general state of the art in internal auditing and in program management still focuses on inputs and limited outputs, and not moving to the broader outcome relationships.

L. Stephens: That's unfortunate, because a lot of what we've tried to do in government, in terms of the ministries themselves, is to focus on the results-based outcomes of initiatives as opposed to just measuring the inputs.

W. Strelioff: On the other hand, it's not easy just to say, "Well, you shall now focus on results or outcomes," and then tomorrow it happens. There's a lot of rethinking and changing roles and gathering relevant performance information involved, before you can begin to monitor different strategies and how it impacts what success looks like — what you're trying to achieve. So it's a good direction. We've encouraged strongly the messages that you've put in place through the Budget Transparency and Accountability Act, which is to encourage all organizations to focus on results and outcomes.

Also, having service plans being tabled at the time the budget is delivered is a really important step to hold on to — and use those service plans and service plan reports to ask questions about to what extent organizations can link resources, strategies and outcomes. It's a very important step to take, but it's not something that just happens tomorrow.

L. Stephens: I understand there are times when it's needed to change the corporate structure, if you like, and the corporate mind-set in the health authorities. I think one of the areas — and I'm going to ask you if you found this to be the case — that the health authorities really have to focus on is determining what their costs are for their procedures and their operations. I don't think they know what it costs them to do a surgical procedure. I don't think they have that knowledge as of yet.

Are those some of the areas they're working on in terms of their internal audits as well, to be able to determine what their true costs are for their operations and their procedures and to be able to say with certainty: "This is the budget or these are the funds that are going to be required for this next year, two years, five years" — whatever it is — "given that we are going to be performing these kinds of procedures and these number of procedures"? Are they working in that direction?

W. Strelioff: I think this is a good question for my colleague from the Health ministry. When I last asked this question within the health system, a lot of the focus was on integrating different health organizations into six, and that was the key focus. That was taking up all the information management energy and focus. But I think the general acknowledgment is that we need the type of information that you're talking about, and we're moving toward that. Now, as to how quickly

we're moving that way, I think Mr. Woodward would be a good person to just touch base with.

W. Strelioff: While he approaches, it's one of the reasons why we've been holding strongly on moving to generally accepted accounting principles. The starting point is to get a complete picture or accounting of costs and resources. You need that starting point, and then you drill down. Certainly, in the health and education systems, as we move that way — we're moving right now — and over the future, it does facilitate the gathering of more specific cost information. You start off with a complete picture, and then you drill down.

L. Stephens: One final suggestion I have for you is that perhaps you may want to look at food services as your next project. It's a very serious concern not just to patients but to family members and various other organizations that deal with the hospitals in terms of food services. That's something you may want to consider for the future.

J. Kwan (Chair): I see that the ministry staff are just setting up to get ready for their presentation. Perhaps we'll take the last question from Mr. Hawes, and then we'll have them make their presentation and then answer your questions. Is that okay?

R. Hawes: I'd be interested in hearing what the auditor general has to say about….

Maybe you can clarify my understanding of your presentation. I took from it that there were at least two health authorities that were less enthusiastic about setting up an internal audit program than the others.

D. Lau: It's only one left. Vancouver coastal still hasn't got internal audits.

R. Hawes: Okay. But again, I'm back to the enthusiasm with which they approach this. I mean, it's one thing to set up an internal audit program and be really serious about it. It's quite another thing to set up a program that's sort of window dressing. Was it your belief that all six authorities now are adopting an internal audit program that's going to be effective and meaningful?

D. Lau: From our observation, yes. I think there is probably something the ministry can respond to the status of Vancouver coastal…. At the time that we were doing the review, they were making sure that they were getting all the functions set up properly. They didn't want to hurry getting internal audit functions set up just for the sake of having a group auditing. They were doing a lot of studying, getting consulting with their accounting firms and making sure they're set up properly. So it's something the ministry will probably have to follow up on with their Vancouver coastal health authority.

Of all the other authorities that we set up, that we interviewed, many of them are really keen on having internal audit groups. They believe they can provide value to the management, to the boards, to day-to-day operations and so on. So yes, the answer is that they're very consistent in terms of getting internal audit functions set up.

R. Hawes: My second and last question to the auditor general is with respect to the audit that you're looking at doing for the new hospital in Abbotsford. I take it that would be working with the internal audit — or would it be? — group from Fraser health that I'm assuming…. I know that the health authority is doing their own audit of this program from start to finish.

W. Strelioff: Members, Madam Chair, I think the question relates to the public-private partnership in building the Abbotsford hospital and cancer centre — correct?

I've been asked in the past by this committee what work we are doing on the various P3 initiatives of government and have said that we are examining the Abbotsford hospital initiative. What I can say today is…. Well, I can give you an update on that project right now. Back in the fall we had initiated what we refer to as a direct examination of the due diligence carried out, led by Partnerships B.C., in moving to this public-private partnership related to the Abbotsford health centre.

We met with the board of Partnerships B.C. and gave them a briefing on what we were doing. The board advised us that by the government policy, government has asked Partnerships B.C. to prepare what it calls a value-for-money report on its due diligence carried out in reaching an agreement related to the public-private partnership. That agreement was signed, I think, around December 8. We agreed with various groups within government, including Partnerships B.C., that we would work together on the examination. So instead of issuing two reports related to the due diligence carried out on the Abbotsford hospital, we would participate in what we call attesting to the value-for-money report that is going to be prepared by Partnerships B.C. on the due diligence carried out in this initiative.

My understanding is that early next week Partnerships B.C. will be making public what's called their value-for-money report on their due diligence carried out on this initiative. Within that report will be a short-form opinion from my office advising you as legislators and advising the public in general of the extent to which we think that report describes fairly the context and rationale behind the initiative, the decisions made

We're finalizing that work right now, and that report issued by Partnerships B.C. is supposed to be made public early next week. Now, when you see this report, it's a change in approach for our office. Normally, we will carry out an examination directly and write the story as to what due diligence has been carried out. It will be our own report, our own story in terms of what we think. In this case, instead of writing it ourselves, what we're going to be doing is expressing an opinion on whether the report prepared by Partnerships B.C. fairly describes the due diligence carried out. My understanding is that the report will be made public early next week.

W. Strelioff: With our opinion right inside it and an explanation as to why we took this approach rather than our usual direct approach.

One of the key reasons is that we think, in general, that it's better for management to step forward and explain what it has done in a forthright way in terms of its due diligence. If we can make this a routine part of every specific initiative related to alternate service delivery or P3s, we think that we will have advanced the state of the art in a systemic way rather than carrying out sort of one-off kinds of examinations.

That's the rationale for it. Whether it is successful in terms of systemic change or explanations on what due diligence has been carried out by government is something that you'll have to judge.

R. Hawes: Just a follow-up to the auditor, then. I guess that was the nub of my question. Do you see the internal audit function within the health authorities as being a part of that systemic change? In other words, you should not have to go out and do specific audits when an internal audit division in the health authority has perhaps done what you might otherwise have done. You may, rather, just comment on whether or not it met auditing standards or whatever. Do you see this as part of systemic change?

W. Strelioff: Well, I think a lot of boards of directors can use internal audit groups very well and very targeted. The role of an external audit is still very important in terms of a public examination. The state of the art in internal audit right across the public sector, particularly in the health system, is formative, to give it the most positive description.

J. Kwan (Chair): Committee members, I'm now going to invite the ministry to make their presentation. We have about an hour to receive the presentation as well as follow up with questions and further discussion about this particular report.

D. Woodward: I have a very short presentation for you, so there will be time for questions. I'd like to introduce Manjit Sidhu, who is our ministry executive financial officer. He's joining me today.

I'd like to start off by thanking the committee for the opportunity to speak to this report and to thank the auditor general's office for the work they have done on this report and for their thoughtful comments and suggestions. The report does, in our view, provide a good overview of the progress that the health authorities have made to date in implementing internal audit programs, and I think it provides some good advice for the authorities in furthering the implementation of those programs.

I think it's important to recognize, as Mr. Strelioff said, that internal audit is just in its infancy in the health authorities. We are really just getting going. As the auditor general has pointed out, it does take a bit of time for these programs to establish themselves, get up to full efficiency and really get rolling. That makes the timing for this report rather timely in fact. The auditor has brought in some good suggestions, and those can be incorporated by the health authorities as they're evolving their departments.

Both the ministry and the health authorities do recognize the importance of internal audit to the efficient operation of an organization. I think it's important for the boards to have — independent isn't quite the right word — a quasi-independent view of the state of the nation inside their health authorities. It also gives them an assessment of the financial risks and controls in their organization. It's also important for management, because internal audit can provide some good advice around making things run more efficiently and effectively. I've spoken to the health authorities and the management and asked them about their response, and it has generally been very positive. They found their internal audit departments to be very helpful in terms of the advice they provide and the reviews they do. Again, it is early days. There haven't been a lot of reports done. But the ones that have been done have been received very favourably.

We are pleased that the auditor general's report is very positive and encouraging. There is always room for improvement, but it does demonstrate that the health authorities are making some solid progress and taking the appropriate steps to achieve high-functioning internal audit programs.

One of the things that the report highlighted was the benefit we got from the consolidation of 52 health authorities down to six, in terms of the capacity to sustain internal audit resources. When we had 52 health authorities, only two of them had internal audit operations. The rest had none. From a financial management and control perspective, consolidating — getting larger critical mass to support internal audit functions — is a very positive step.

Even though the health authorities have internal audit departments, they are relatively small, and they are all newly established. The health authorities recog-

nized very early on that it would be really important to work together and share learnings. So they formed this health care internal assurance and auditors peer group, which is basically the internal audit departments from each of the health authorities working together. Our office of the comptroller general internal audit department is a member of that committee, and they bring a wealth of experience to this group. By having this collaborative group we can make sure that we get best practices disseminated quickly. They can share experiences. The internal audit branch of the Ministry of Finance can contribute their advice, and through all of this we hopefully will get our internal audit departments up and running and efficient in a quicker manner than if left to their own devices.

In terms of the conclusions it is early days. The health authorities have taken appropriate steps to establish effective internal audit programs. It is important to note that internal audit is part of a range of risk management activities. There are a number of things. There was a bit of a discussion a little earlier on around the clinical side. There are a number of practices and accreditation processes that speak to the clinical risks. There are things like hospital accreditation reviews, which include risk management assessments. There are the hospital medical advisory committees that oversee the quality of patient care, and all of the boards have quality committees that also deal with quality assurance and risk.

In the auditor general's report there is an appendix — I believe it's appendix A — that lists 12 different reviews that go on in the Vancouver Island health authority, as an example of some of the other types of reviews in the system.

I think the auditor general's comments are going to help the health authorities fully implement high-functioning internal audit programs, and again, we welcome the input.

Looking forward, clearly the health authorities are at the early stage, as we've mentioned, but they will gain experience and capacity as they evolve and their programs mature. We will be there to help where we can. Internal audit from the Ministry of Finance will offer assistance and guidance where necessary.

With that, I would like to again thank the auditor general for his comments and conclude my very short presentation.

J. MacPhail: I realize that it's early stages, but what are the consequences that can flow from an internal audit? What do you do with them? What are the penalties or the rewards?

D. Woodward: Arn may want to speak to that, but if I could, just ahead. There are no real penalties or rewards that I'm aware of. The internal audit's job is to advise the board of the status of controls — risks that it identifies, the way programs operate — and suggest improvements in those controls. The management would, much the way the auditor general does for reports to government, give some recommendations. Management would respond to those recommendations.

D. Woodward: I guess the board would be accountable for taking action to correct that.

J. MacPhail: I'm just trying to figure out the purpose of us wanting internal audits. I'm in favour, and I'm just trying to figure out why I'm in favour, as a taxpayer.

You have the internal audit. It goes to the board. The board makes a decision or not. Who knows about it?

D. Woodward: Management sees the report because management has input. The management provides a response to the auditor's report.

J. MacPhail: But that's all internal unless you make it public. It could be a nice little closed circle that I as a taxpayer never find out a thing about. I would like an answer, Mr. Chair, about whether the internal audits are made public — within the confines of the FOIPPA and all that stuff. Thanks.

A. van Iersel: If I may clarify, for the internal audit function that's part of my office, the reports are all subject to FOI. In fact, what frequently happens is that we are asked for a list of all the audit activity that has happened for a fiscal year, and then various reports are selected from that. They're not public in the sense that we proactively release them, although we're trying to work with ministries to reconsider that further. For example, Children and Families put some of their reports on the website, and that's actually the advice we're giving to ministries.

The internal audit is primarily a tool to work with boards and with management in terms of identifying problems and, more importantly, identifying the action plans that are necessary to address those issues, but

whenever a report is asked for, subject usually to very little severing, that report is released. They are available in that way.

A. van Iersel: In this case, I'm speaking for my own office. I think we have to double-check the application of FOI to the health authorities.

J. MacPhail: Yes, I understand. Thank you very much, but my question is about the health authorities.

J. Nuraney: Did I hear, earlier on, it being said that one of the five authorities has not yet got the structure in place? If that is so, which one? Why are they dragging their feet?

D. Woodward: One of the six doesn't. It's Vancouver coastal. They have been trying to hire a head of internal audit without success. They have made a couple of offers to folks, and they haven't been accepted. They are using PricewaterhouseCoopers Inc. in the interim to do their internal audits. They have a charter. They have all the process. They just don't have their own dedicated staff.

L. Stephens: I think these internal audits are excellent. I think they're a wonderful management tool to make sure that the operation works as efficiently and effectively as it possibly can. I think the health authorities — and the health system, generally speaking — are one of the organizations that need these kinds of internal audits, perhaps more so than a lot of a lot of other areas. I don't think they've really been able to get a handle on what their operating costs are, what their procedures cost or any of these other kinds of issues. For me, that's the really important one, for them to know and to understand how much it costs to provide these kinds of services.

I asked the auditor general about the inputs and the outputs. I know, Mr. Woodward, you know what I'm talking about when we're talking about not measuring the inputs but measuring the outputs and achieving the results for that efficiency and effectiveness. That means accountability. If the health authorities aren't ready to accept that accountability, these internal audits could go sideways and be quite ineffective. Is there a commitment for these internal audits to in fact be ones that actually measure what is being done? And therefore the health authorities and the boards will be accountable for what these audits reveal.

D. Woodward: I think there is that commitment. As Mr. Strelioff said, it's a bit of "walk before you run." I think most of the internal audit departments now are focusing primarily on the traditional role of internal audit: financial controls, financial risks. There is some of that, like when they do contract management audits. Part of a contract management audit would be about the process of letting the contract and how you monitor it, but also part of it should be: did we get what we asked for?

I know that one of the health authorities did a follow-up on a surgical contract that they had, to see what they got for it. I don't know what the result of that audit is, and in fact I don't think it's finished yet. I know another one has looked at their food services contract. I'm sure there are…. I know others have done contract management reviews. I don't know the specifics of the contracts. I think that gets to part of it.

You did mention earlier around costing and case costing. It's a hugely complex issue. Around the world it's a complex issue. We have a couple of health authorities who have done some case costing, attempting to identify that, in the Fraser health authority. I think Royal Columbian has done some and St. Paul's Hospital has done some.

It is a very tricky business, particularly when you get into the big tertiary hospitals and you've got things like academics, research — you know, those kinds of things. It's very tricky, but they are making some steps. And it's important to us too, because we need to know that information.

L. Stephens: I think it's going to be extremely important, because the whole the issue of our health system being more efficient and more effective in providing these services is going to be a lot more important as we move through. I think everybody understands that there is a lot of pressure on our public health care system to be as competitive as possible, as it is in the private system. I'm not suggesting that we go down that road of a private system, but I am suggesting that our public system needs to be as efficient, as effective as it can possibly be.

These internal audits are crucial in determining how the system moves in that direction, so I'm a big supporter of these. I'd like to see them be as effective as they possibly can and ask those hard questions and make sure that the boards and the health authorities are very accountable for the money they get, how they spend it and what comes out the other end in terms of services for people.

R. Hawes: To Mr. Woodward. The word "accountability" has come up here several times. Right now the ministry has an accountability framework and a contract with all of the health authorities to provide certain

outcomes. I've always wondered who's measuring those outcomes. What kind of statistical information…? Who provides you with the information to say they have achieved or are working towards or are succeeding or not succeeding in their outcomes contract? And I'm wondering, first and foremost: would the ministry be directing part of this internal audit program to verify the kinds of reporting-out that's required for the accountability framework? That's one.

The second question would be: is the ministry…? I'll go back. Ms. MacPhail asked the auditor general whether there was some legislation forcing this to happen. Is there something within the ministry that is directing the health authorities to get this job done, to get it done effectively and directing the areas in which they are to complete audits?

D. Woodward: The ministry does not direct the health authorities' internal audit departments. The internal audit departments work with the boards to set up a workplan, an audit plan. The ministry doesn't direct that.

In terms of the accountability between the ministry and the health authorities, there are performance agreements that have some fairly specific deliverables in them. We monitor that within the ministry. The performance management and improvement division primarily monitors the results of those and meets with the health authorities on a regular basis to discuss the progress. That's how that accountability works.

R. Hawes: Okay, but within that, I assume they're relying on information provided by the health authorities.

D. Woodward: Yes, and there are data sources. We have our own internal data sources. The discharge abstract database — DAD — is commonly referred to, which tells us some details about people who come out of the hospital so we can monitor that kind of activity.

R. Hawes: But the performance framework is much broader than just who's coming out of the hospital.

R. Hawes: That's why I'm wondering whether or not…. It seems to me that it's the ministry that directs to a great degree what the board does. I get the relationship between the board and the authority, but there is a relationship between the board and the ministry as well.

R. Hawes: And they are taking, and should be taking, some direction from the ministry. Is that correct?

D. Woodward: Yes, and we provide that direction, primarily through the performance agreements, where we outline our expectations of the health authorities.

R. Hawes: That's why I'm wondering whether or not the internal audit process will form part of that and whether or not there will be some direction from the ministry to the boards with respect to at least approving the veracity of some of the information that comes out of the health authorities. That's number one.

Number two. Maybe that's back to the auditor general, because I'm assuming that if this information, if these audits aren't public…. They are certainly not public, but they are available to the auditor general, I'm presuming, because he has access to all information, as far as I know.

W. Strelioff: Yes, they are available to me. My understanding is that they are FOIable as well.

R. Hawes: Back to the other question, then, with respect to how the ministry…. Are you developing tools that are considering developing the internal audit process as a tool to at least provide more confidence? I guess I'll put it that way. Or are you already confident in the accountability and the outcomes reporting?

D. Woodward: I think we have a pretty good degree of confidence in what gets reported out. I'm not aware of any specific initiative to say that internal audit has to be involved in the reporting you provide to us. Again, a lot of the information that we get comes out of databases that are filled from information from the hospitals, so certainly, there could be a role in looking at the discharge abstract database in terms of how the forms are filled out.

I'm not exactly sure of all the specifics of how it works, but certainly, there could be a role for internal audit to perhaps look at that and say if the forms are being filled out appropriately in a timely manner and submitted appropriately — that kind of thing. But there's nothing that we're doing…. We're not prescribing anything that I'm aware of, member. We could certainly look at it, though. I'm not closing the door on it.

R. Hawes: And just one last point, I guess. If I were to take this hat off and just speak as a member of the public, it would probably give me a little bit more confidence that my taxpayer's dollars are being spent appropriately within the health authorities if I knew that there was an internal audit process that somebody outside of the health authority is looking at and has mandated and that there's some veracity to the numbers that are coming out and where the dollars are going.

D. Woodward: Certainly, I don't dispute that. I guess I come back to my comment about walking before we run. I'd need to get them established and get a good understanding. Part of the growth is that the health authorities themselves have to get used to it. They aren't used to this particular process — right? — so they've got to adapt to it. Down the road we would expect much more robust activity from the internal

J. Kwan (Chair): Are there other questions from committee members? Seeing none, thank you very much to our witnesses.

Committee members, there are no recommendations associated with this report as identified by the auditor general, unless any committee member wishes to come up with a recommendation. We're prepared to entertain that, but if not, I would simply ask that the report be received, and then we'll move on to the next agenda item.

J. Kwan (Chair): Our next item on the agenda, committee members, is the office of the auditor general 2004-05, report No. 5, Salmon Forever: An Assessment of the Provincial Role in Sustaining Wild Salmon. We'll just give our witnesses a moment to orient themselves, and then we will receive the presentation.

W. Strelioff: The report is Salmon Forever: An Assessment of the Provincial Role in Sustaining Wild Salmon. As you might know or, sometimes, remember, part of what we do is examine how well government manages its programs and responsibilities. We look for opportunities for government to manage better and to report more completely. In this case, we examined how well the government is managing its responsibilities to sustain wild salmon in British Columbia. For example, do we know the extent to which we are leaving future generations of Canadians a healthy wild salmon resource? To what extent are we building, sustaining or letting depletion take place with respect to our wild salmon stocks and their genetic diversity?

Because management of wild salmon and salmon aquaculture is a shared federal-provincial responsibility, we worked with the auditors general of Canada and New Brunswick to complete our examination. Together we were able to accomplish more with less duplication of effort and achieve a broader view and understanding of the issues.

On page 1 of my report I include a summary statement signed by the auditors general of Canada and New Brunswick; by the commissioner of the environment and sustainable development, who works within the office of the auditor general of Canada; and by me. The examination done by the auditor general of New Brunswick focused only on salmon aquaculture, because wild salmon stocks on the east coast are severely depleted, primarily, I understand, due to acid rain. The focuses of the examinations of my office and my federal colleagues are similar. Together we found much room for improvement.

In December I wrote to you, advising you that the House of Commons Standing Committee on Fisheries and Oceans invited us to attend one of their meetings related to public hearings on the 2004 Fraser River sockeye salmon harvest. At the meeting held in Vancouver, we reviewed our report and answered their questions.

Working with the federal government, the challenge for B.C. is to balance in the best manner possible its sustainability goals with social, economic and environmental well-being. Historically, wild salmon has been a significant part of our province in terms of our economy, our environment and our communities. B.C. is one of the few remaining locations in the world to support relatively large numbers of wild salmon. Over the last several decades the long-term sustainability of wild salmon in B.C. has come into question. Some experts suggest that the depleted state of wild salmon on the Atlantic coasts of Europe and North America stands as a warning for managers of wild Pacific salmon. Experience in other jurisdictions illustrates that proactive government participation is essential for ensuring that habitat conditions are in place for wild salmon to carry out their life functions.

In 2002 wild salmon contributed more than $600 million to the B.C. economy through recreational fishing and commercial landings. Recreational fishing accounts for about 3,600 person-years of employment annually. Commercial fishing accounts for over 900 person-years.

More specifically, my office examined B.C.'s programs for protecting and restoring salmon habitat and for preventing and mitigating potential impacts of salmon aquaculture on wild salmon stocks. Concerns about salmon and salmon aquaculture are not new, and neither are attempts to improve the state of the resource and its habitat. In the meantime, some salmon populations are in trouble. Habitat loss continues to occur. It is not known what long-term effects salmon aquaculture is likely to have on the natural resource or the environment.

In addition, uncertainty about the future has been increased as a result of delays in implementing legislation beneficial to wild salmon protection, changing government business practices related to resource management, persistent gaps in information and knowledge, and lack of public accountability reports.

With me this morning are Morris Sydor and Tin Lok Ng, who explain in more detail what we examined and why, our findings and conclusions, and what we recommend.

In addition to our audit team and the audit teams of the offices of the auditors general of Canada and New Brunswick, we also created an external advisory group to help guide our work. The members of that group are listed on page 12 of our report.

I'm going to now turn it over to Morris and Tin Lok to review with you our findings, conclusions and recommendations.

M. Sydor: Good afternoon, committee members. This presentation is going to review our report, Salmon Forever. This report represents a departure from our usual reporting practice. As was just noted, three offices — the federal auditor general, the auditor general of New Brunswick and our audit — undertook coordinated work. We examined similar issues related to our jurisdictions, and we each issued a report at the same time. The federal and New Brunswick reports cover wild salmon issues and the impacts of aquaculture. The New Brunswick report focuses only on aquaculture issues. The three reports each had a common summary — that is, a common message signed by three auditors general and a commissioner for environment and sustainable development. All of the reports were released on the same day: this past October 26.

The common message by the auditors general and the environment commissioner identified several themes. There was acknowledgment that salmon stocks are under pressure on both coasts. As well, the federal government has been struggling since 2000 to finalize a wild salmon policy, and in British Columbia the government does not have a clear vision, an overarching strategy, for wild salmon sustainability. There is acknowledgment that both levels of government have responsibilities related to wild salmon, with the federal government having the senior responsibility. Although many agreements and committees exist, problems with coordinating efforts still exist. Each of the three audits looked at aquaculture issues and found there are gaps in knowledge about the potential effects of salmon aquaculture.

These concerns are not new, but progress has been slow. The collaboration of a variety of agencies within government and between governments is essential. The respective governments are urged to take immediate action on these important issues.

Our review looked at the five species of wild salmon found in British Columbia: chinook, chum, coho, pink and sockeye. Pink, chum and sockeye are considered the most abundant, while coho and chinook are under pressure.

Wild salmon have had a profound impact on our history, culture and economy and continue to contribute significant social, economic and cultural benefits. Over the last several decades, however, the long-term sustainability of wild salmon has come into question. The health of freshwater habitat can be impacted by various human activities. For example, this table shows the many types of land use and development activities that can have an environmental impact on salmon and their habitat. Forestry, water use, urbanization, agriculture and aquaculture can all have potential impacts.

Under the federal Fisheries Act, the Department of Fisheries and Oceans Canada has senior responsibility for managing all the wild salmon, including allocation, inventories, escapement and habitat management. The provincial government participates in the day-to-day management of wild salmon issues through legislation and regulations that govern land use and resource development activities. The shared responsibility for salmon and their habitat between these two governments has led to the creation of many agreements and protocols.

The province's role in managing habitat is significant, and there are many reasons for the province to play an active role. The province has obligations under agreements with the federal government and obligations under provincial legislation. Salmon has an important economic impact — $607 million in 2002 for commercial and recreational activities and 4,500 person-years of employment for those two sectors.

The province is also responsible for being a good steward of public lands, so it needs to manage activities that can affect fish habitat. Increasingly, global markets are requiring some form of eco-certification for resource-based products. Certification of wild stocks for marketing will require being able to demonstrate the viability and sustainability of wild stocks. Salmon are an important public symbol for British Columbia. Sustaining them is a demonstration of government delivering on its commitment to protect the public interest.

The purpose of this audit was to assess whether the province has effective programs in place to ensure the sustainability of wild salmon in British Columbia. We examined how the province protects and restores habitat as well as how it mitigates the potential impacts of salmon aquaculture on wild stocks. We also reviewed how the government accounted for its performance. We focused our review on the four ministries and two agencies responsible for habitat and fish protection as well as for land and resource management activities that can impact wild salmon.

Over all, we concluded that the province needs to be more aggressive if it is to ensure the future sustainability of wild salmon. Protecting habitat and restoring past problems are essential if this goal is to be attained. Although the province does not have the primary legal obligation, its role in managing habitat is significant. The absence of a provincial vision and a strategic plan have prevented establishment of a coordinated program. The shared responsibility between the two governments has led to a mosaic of agreement on protocols that have not substantially clarified roles. This has created awkward arrangements and working relationships.

Existing provincial legislation does not provide adequate protection, because some key provisions are either not in force or are not being acted upon. Although aquaculture impacts are recognized and addressed, gaps exist and more research and studies are needed. Finally, government ministries and agencies are providing limited accountability to legislators and the public on their progress in sustaining wild salmon.

The first major issue we considered was the adequacy of vision, strategy and leadership. Sustaining wild salmon requires a clear vision to reflect the province's intentions regarding wild salmon. We concluded that the province does not have a clear vision in place to protect or restore habitat or to guide and support policy and program development for maintaining salmon in their habitat. As well, because of the significant federal influence around wild salmon, a common federal-provincial strategy approach needs to be developed to better coordinate efforts and achieve results.

Clear leadership is needed if complex strategies are to be coordinated and managed effectively. However, we found an absence of strong leadership. Several ministries and agencies have a role, but there is no one lead agency to give clear policy direction for setting provincial goals or objectives. With the many agencies involved, there has been a proliferation of memoranda, service agreements and committees. With so many committees operating at any time, there is uncertainty among the players as to which agreement or committee bears what responsibility.

We next looked at how the province protects habitat. We found that the province can play a more active role. Although there is no legislation outlining the province's role in wild salmon issues, legislation that provides provisions beneficial to wild salmon exists.

The Fish Protection Act, for example, can provide significant benefits. However, it provides incomplete protection because several important provisions have not been implemented. The Water Act also contains provisions beneficial to wild salmon but has not been used as an effective tool for protecting fish habitat. The act does not require that water needs for fish be considered in a consistent or rigorous manner.

For the forest industry the Forest Practices Code and related guidebooks provide good direction on best practices. A key provision in the Forest Practices Code, and one continued in the Forest and Range Practices Act, is the requirement for the establishment of riparian reserves and riparian management zones.

We also found guidelines for agricultural operations were being developed. The government is working with agricultural groups to implement best practices, including riparian habitat protection and development of farm environmental plans.

Changing business processes are creating uncertainty. The move to a results-based approach means that government will not be in a position to identify and fix problems before they occur. Compliance and enforcement regimes are being redesigned. Greater emphasis is being placed on the use of risk assessment to determine where and how infractions will be weighed and pursued. To date there have been limited evaluations carried out to assess the effectiveness of legislation or prescribed standards in protecting fish and fish habitat.

Restoring habitat is another way that government can contribute to the sustainability of wild salmon. We found that government has reduced its involvement in habitat restoration. Many programs targeted at wild salmon no longer exist. Several years ago the government announced it would pass the living rivers act, but the promised act is not yet in place. Similarly, a ten-year program to correct past damage was proposed but has not been established. Several fisheries- and habitat-related programs remain under the forest investment account, B.C. Hydro's water use plans, and fish and wildlife compensation programs.

To make the best use of scarce resources, funds ought to be spent based on priority. Currently, information on restoration needs is incomplete. There is no single inventory of the work previously completed or the ranking of watersheds and habitat requiring restoration.

Effectiveness evaluations are necessary to ensure scarce resources have been allocated in an efficient and effective manner. Few evaluation programs are currently in place. In the past some have been carried out under the urban salmon habitat program and watershed restoration program. The B.C. Hydro programs incorporate periodic assessments. Monitoring of the results is to take place at five-, ten- and 15-year intervals. Successful programs require effectiveness evaluations, and they should be part of any restoration program.

On the issue of managing information on wild salmon, we found that the province has collected a considerable amount of inventory information about fish and fish habitat. Although this information does not have a focus on salmon, it is still useful. However, concerns were expressed about the accuracy and timeliness of data being collected. A number of information gaps have been identified, and we were informed that data cleanup and completeness issues were being addressed. Consistent application of standards is needed to maintain the integrity of the data being collected.

Ministries and agencies rely on skilled staff and consultants to carry out government responsibilities and programs. Many skilled professionals are involved in managing information related to wild salmon. We found that training opportunities for these staff are adequate but that the resources are stressed due to shifts in roles and workforce adjustments. There is uncertainty about the long-term capacity needs, as the extent of the problem and level of effort needed has not been defined.

Now I'll provide our findings on the salmon aquaculture component of this audit. Salmon aquaculture started in B.C. about 30 years ago. Today the province is the fourth-largest producer in the world. In 2002, 12 companies produced about 85,000 tonnes from 121 farms. Government has stated that salmon aquaculture has the potential to generate $1 billion in economic activities over the next ten years. Nevertheless, concerns remain about the industry's impact on the environment and wild salmon and whether risks are completely understood.

The three main areas of risks in the salmon farming industry concern marine environmental impacts of aquaculture operations, competition from escaped

farm fish and the health effects from the transfer of parasites and diseases. An incomplete understanding of these risks has generated considerable and intense debate in British Columbia.

As with wild salmon, the federal and provincial governments have jurisdiction over and therefore overlapping responsibilities for the regulation of salmon farming. Agreements are used to better define rules and responsibilities. As well, coordinating committees have been established at the project level and management level to guide policy discussions. However, tension and divergence of opinion still exist between the two levels of government, as illustrated by policy differences surrounding siting criteria for salmon farms.

The province responded to public concerns over fish farms and in 1997 completed the Salmon Aquaculture Review. The review concluded that salmon farming poses a low risk to wild salmon but qualified that by adding "as currently practised and at current production levels." The province accepted the report's conclusion of low risk and developed a risk management framework. In 2002 the salmon aquaculture policy framework was established. Regulations were strengthened or adopted. The aquaculture regulation, for example, provides rules for farm operations in escape prevention. The finfish aquaculture waste control regulation provides waste management standards and monitoring requirements for fish farms.

We found that although constructive measures for fish health, waste, best practices and compliance and enforcement have been put into place, important issues still remain. The Ministry of Water, Land and Air Protection sets performance standards to limit the impact of fish farms on the surrounding environment. Fish farm operators are required to monitor their sites according to protocol set by the ministry and to report results within set timetables. Debate still remains, however, around the need to do more research to apply such values in British Columbia. The ministry recognizes this issue and will review the regulation in five years.

With regard to escape prevention, regulatory requirements have strengthened farm and net cage design construction and have improved management and operational practices. The number of reported escapes has decreased. However, knowledge gaps remain about the potential impacts of escaped farm salmon.

For fish health, the Ministry of Agriculture, Food and Fisheries has adopted a range of measures to deal with fish health issues. In 2000, for example, it started the fish health audit and surveillance program, and in 2003, as a condition for granting licences, it required farms to establish a fish health management plan. In November of 2003 a sea lice monitoring program was established to form part of the fish health management plan.

Compliance and enforcement activities are also underway. Inspections are conducted at least once a year and cover essential areas required by both the Ministry of Agriculture, Food and Fisheries and the Ministry of Water, Land and Air Protection. Inspection results are reported annually and are publicly available on the Ministry of Agriculture, Food and Fisheries website.

There are, however, concerns about the short statutory time period for initiating enforcement actions and the limited penalty provisions of the aquaculture regulation. Properly sited farms can reduce environmental impacts and impacts on wild salmon, and 15 criteria have been developed as guidelines. But outstanding disagreements persist between the federal and provincial agencies concerning the values for siting net cages in close proximity to wild salmon streams, fish habitat buffers, seabed characterization and the grandfathering of old sites. As a result, efforts to relocate poorly sited existing farms have been slow.

The province's ability to manage the risks associated with the interaction between wild salmon and salmon aquaculture is still hindered by gaps and uncertainty in knowledge. There is a need to address the priority knowledge gaps associated with wild and farmed salmon interactions in several areas, particularly around issues of fish health and disease, escapee behaviour and cumulative environmental impacts.

In the area of reporting on performance, we found there was limited accountability, both on the part of government overall and by individual ministries and agencies. We made 14 recommendations in our report that cover vision, strategy, leadership, effectiveness evaluations, information and knowledge improvement needs, and performance reporting.

To our witnesses and committee members, we could entertain questions at this point, or we could move on to receive the presentation from the ministry and then proceed with questions. What's your wish?

Okay. We'll then ask the ministry witnesses to please come forward. We will receive their presentation, and then we'll open up the floor for questions. We have two ministries, actually — first, the Ministry of Agriculture, Food and Fisheries and then the Ministry of Water, Land and Air Protection.

I will first ask Mr. Graham. Am I right in assuming that you'll be making the presentation?

B. Graham: I'll make some opening remarks. I'm going to ask Mr. Alley to provide the overview presentation, and then we'll go from there.

J. Kwan (Chair): Okay. I'm just wondering: will the Ministry of Water, Land and Air Protection be making

B. Graham: No. We have consolidated the government response into one presentation.

B. Graham: Good afternoon. My name is Bud Graham. I'm the assistant deputy minister for the Ministry of Agriculture, Food and Fisheries. With me today are a number of other people from various government agencies. Mr. Jamie Alley, to my left, is joining us, and Dr. Al Castledine, our director of aquaculture development, will be joining us a little later. Unfortunately, he's in another meeting with Minister van Dongen at this moment in time, so he'll get here as soon as possible.

Mr. Alley is currently the director of seafood development in the ministry. Until recently he worked in the Ministry of Water, Land and Air Protection and was responsible for coordinating government's response to the auditor general's report.

Dr. Castledine is the director of aquaculture development and is responsible for the sustainable development of our shellfish and finfish aquaculture sectors, including our research and development programs.

With us also today from the Ministry of Water, Land and Air Protection are Al Martin and Rod Davis. Al Martin is the director of the fish and wildlife recreation and allocation branch and in that capacity is responsible for the management of provincial freshwater programs. He has also been coordinating the ministry's habitat restoration programs.

Rod Davis is the associate director of the biodiversity branch and is responsible for habitat protection programs, including our work with the Department of Fisheries and Oceans on fish habitat.

Finally, with us today from the Ministry of Sustainable Resource Management is Mr. Dave Tredger. He is the manager of ecosystem information in the resource information branch, and he's familiar with the province's natural resource information systems for fish and fish habitat.

With that as an introduction of our team, what I would like to do is ask Mr. Alley whether he would go through the presentation.

J. Alley: I'm assuming the presentation has been loaded — has it not? — and will be coming up.

J. Alley: That was our understanding when we provided the electronic copy of the presentation. If it isn't there, perhaps we can…. I'm assuming that members of the committee were given a paper copy. Yes. Well, until it's loaded, perhaps we could just walk through the paper copy.

As the committee has already heard, the auditors general for Canada, New Brunswick and B.C. cooperated on all three salmon audits. As the committee has heard, the purpose of the B.C. audit was to assess the effectiveness of provincial programs to sustain wild salmon and, in particular, to look at our programs to protect and restore salmon habitat and to mitigate the impacts of salmon aquaculture.

We have briefly discussed the findings with the New Brunswick and Department of Fisheries and Oceans staff. Regarding the federal government, we have agreed in general to work with the federal government on the overlapping recommendations, and we've already conducted preliminary discussions with the New Brunswick people to share science and information on aquaculture.

In terms of the general conclusions as we understand them: first, that the province needs to be more aggressive to secure the future of wild salmon; that we need to develop a vision for wild salmon; that there is concern over the resources and programs in legislation to protect fish habitat, a recognition of the considerable progress that we've made in salmon aquaculture regulation; and that we need better public auditing of the results.

We, reading the report, have boiled the key findings down into four areas. One is the recommendation surrounding the management of our shared responsibilities with the federal government for wild salmon needing to be guided by a clear vision. The second area of recommendations, as we understand them, is that we need to be more active in protecting and restoring fish habitat. The third area is regarding the potential impacts of salmon aquaculture and the need to develop more knowledge to improve our management practices and that we need to better develop evaluation measures and to report publicly. I'd like to go through each of those key findings, recognizing that the bulk of the audit was conducted in 2003 and early 2004.

Regarding the issue of shared vision, the ministries do agree with the recommendations on the need to establish a clear vision. We would note, however, that we think this needs to be a shared vision with the federal government and the key stakeholders.

It has been difficult for the province in the past. With the absence of a federal wild salmon policy, it's been difficult to develop such a vision. Now that we have the wild salmon policy, which we received last month, we can begin to have a look at the federal wild salmon policy. Indeed, with things like the classification of steelhead streams, it appears that the kind of approach we're using will be consistent with the federal wild salmon policy and the application of restoration and enhancement techniques.

Having said that, we also note the recommendations regarding the need to rationalize the relationship we have with the federal government, and we're moving in the direction of developing new, shared decision-making models. Earlier this year the province, with the federal government, set up the new Pacific

Council of Fisheries and Aquaculture Ministers, PCFAM. We'll be working through this mechanism at the ministerial level.

Regarding fish habitat, we recognize that unlike the federal government, which has a single piece of legislation, the provisions to protect fish and fish habitat exist in a number of provincial statutes. We also recognize a need to continue to monitor the effectiveness of those.

We are actively engaged right now with DFO in changing the habitat protection business practices to, as noted earlier, results-based kinds of approaches. We have developed a detailed workplan that Mr. Davis can talk about later. It is interesting to note that under the federal smart regulations initiative, they have developed an environmental modernization program which includes a risk management framework. Our experience over the last year of working with them is that there are a lot of opportunities to synchronize new kinds of approaches discussed by the federal government with the kinds of approaches that we're taking. As I said, Rod can provide some more detail on that later. We also are committed to protecting and restoring watersheds as part of the living rivers strategy.

With regard to the recommendations on salmon aquaculture, we do appreciate the recognition of the considerable progress that we have made over the last five or six years in developing a sustainable aquaculture sector. We do agree with the recommendations that more information would be helpful to continue to improve the management and regulation of the sector. We have committed a lot of resources to research activities, and we will continue to work through the B.C. Aquaculture Research and Development Council to both prioritize and implement some of those research needs.

With regard to habitat information, we do appreciate the recognition that the province has made through Sustainable Resource Management and land information B.C. We do have an awful lot of data which has been consolidated and is being made available to resource managers. We will continue to catalogue and provide the best available information which we have and to work with both government and non-government partners.

In the area of improved reporting, we do agree with the recommendations that we need better evaluation measures, through monitoring and indicator development, to improve the public reporting on our performance towards those goals. We note that's something we believe we can most effectively do jointly with DFO through the new mechanism of PCFAM.

It's also interesting to note that since the audit the oceans memorandum of understanding with the federal government has been signed. That memorandum includes six subagreements that are under development right now — significantly, subagreements regarding information and data-sharing and state-of-oceans reporting.

Since the audit was completed, there have been a number of more recent events. In December of this year, as members of the committee will probably know, a new Pacific Salmon Forum was created under the chairmanship of the Hon. John Fraser. The purpose of that forum is really threefold: firstly, to protect and enhance the viability of wild salmon stocks and their economic, social and environmental benefits to B.C.; secondly, to increase the public confidence in fisheries management generally and aquaculture in particular in the marine environment; and thirdly, to enhance the economic, social and environmental sustainability of aquaculture for all coastal communities. We're hoping that the forum will provide the kind of mechanism that will help us do that.

Since the audit, an additional contribution of $5 million has been added to the existing living rivers trust fund, bringing that allocation to the trust fund now up to $7 million. Mr. Martin can speak later to some of those expenditures, if the committee wishes.

We did have the most recent meeting of the Pacific Council of Fisheries and Aquaculture Ministers last month. At that meeting, ministers discussed the need to cooperate in general on the implementation of reports of both the federal and provincial auditors general. They also received and approved a fairly comprehensive, detailed joint workplan to implement the synchronization of habitat protection measures.

The key lessons I think ministries have taken from the audit…. First of all, it's been a very useful process for us to go through — a very, very long and rigorous process. As I said earlier, we agree in general with the conclusions, and we really do appreciate the efforts of the office of the auditor general staff when working with us.

We do appreciate the recognition of the progress that we've been making on salmon aquaculture. Our key lesson just regarding habitat is that we need to continue to work on those protection and restoration programs. I finally would note that we believe that PCFAM provides an ideal new mechanism to greater enhance the provincial efforts in working with the federal government to secure the future of wild salmon in partnership with the federal government.

Okay, committee members. Questions, discussion from committee members to all of our witnesses?

B. Bennett: First of all, I should declare myself. I started guiding fishermen, or anglers, I guess — fishers, we call them today — when I was 17, and I didn't stop until I was 38. I've fished all over the country. I don't fish Pacific salmon, but this issue is important to me personally, and I know it's very important to all British Columbians, I'm sure.

I have a series of questions. The Chair will cut me off whenever the Chair decides to do that. I want to do this respectfully, but I appreciate short, succinct answers to the questions where that's possible. I don't want to put you on the spot. It's not a cross-examination. I want a full answer, but I'd really like to get through these questions, if I could.

The first question I have…. I don't know who's going to answer these. Mr. Alley is on the hot seat there, I guess — whoever is appropriate to answer the questions. The first question I have is: do farms give lice an overwintering home that they otherwise would not have?

B. Graham: I'm sorry. We're going to have to jump around a bit here in trying to provide a response to some of the questions, just because we all come from different areas of responsibility.

J. Kwan (Chair): I'm going to just suggest this. Questions put to our witnesses…. Whoever amongst yourselves feels that it's appropriate to answer the question, please go right ahead. You know how to turn on the mike, and that will signal it. Then if you have something to add after the respondent, just let me know, and I'll recognize you as the next person. Then we will proceed that way, if that's okay.

B. Graham: I'll try to give you a succinct answer. Certainly, salmon farms can provide some alternate hosts for lice, but there are also abundant wild populations of fish that can serve as reservoirs or vectors for the lice populations to exist within an area.

B. Graham: Certainly, there are salmon in wild populations present year-round in locations along the coast. It's not just that time period. Both farms and wild stocks can be harbourers of lice.

B. Bennett: Do the outgoing young salmon contract lice from fish farms on their way out in the spring?

B. Graham: The lice eggs are mobile in the water column and can transmit onto juvenile salmon. What we do on the salmon farms is monitor those levels, and we try to keep them down at as very low a level as possible during the out-migration as a management technique.

B. Bennett: Do we know whether or not most of the most dangerous type of sea lice…? Would they ordinarily die in the wintertime were it not for fish farms?

B. Graham: Again, what happens is that the life cycle of the lice…. As the adults come back, that's when salmon farms encounter lice — when wild Pacific salmon return through a geographic area. What happens is that when the adult goes into fresh water, the lice are killed. If there are eggs released before they go into the freshwater environment, whatever animals are present in that area can harbour lice on them over the winter and be available for the downstream migration. As I say, what we do with farm populations is manage those lice levels to keep them down at a very low level during that out-migration time period.

B. Bennett: Is it true that it takes far fewer lice…? I've read that it takes only a couple of lice to kill a Pacific salmon, whereas it might take 11 to kill an Atlantic salmon. Do we know that?

B. Graham: I don't think there's any precise number, and studies are still underway looking at some of those questions. I don't think there's any agreed scientific answer to that question.

B. Bennett: Let me jump ahead a little bit in my list then. Are we, the provincial government, or is DFO doing the kind of research that will allow us to answer that particular question?

B. Graham: We have a number of research programs underway that have been developed through the B.C. Aquaculture Research and Development Committee, which are ongoing on some of those questions right now.

B. Bennett: This one might be a little bit subjective. Are farms located in the narrow bodies of water that migrating Pacific salmon must then swim through?

B. Graham: What we found out in a 2003 study is that all the migratory pathways are used by salmon. Where salmon farms are located is basically where they can develop the appropriate anchoring structures to secure them in a particular area.

B. Bennett: Do the drugs that are being used by fish farms today tend to kill the young salmon food — the shrimp and the prawns?

B. Graham: A number of studies have been done on Slice, which is the chemical that is used. They found that there are some effects on those populations but certainly not lethal effects on the populations.

B. Bennett: But has enough research been done to determine the impact on that fish food for young salmon?

B. Bennett: To your knowledge, are any wild salmon populations collapsing around salmon farms today?

B. Graham: No, there are not. In fact, the populations of pink salmon in the Broughton Archipelago rebounded to over 900,000 returning adults this particular year.

B. Bennett: I want to ask a question about what they do elsewhere in the world. It's my understanding — correct me if I'm wrong — that Norway has very severe penalties for fish farm operators that allow a count of more than 0.5 per female fish — half a louse, I guess. There are serious penalties like jail time and large financial penalties. I take it that we don't have those same high penalties and that our lice-per-fish ratio that we allow is much higher. Do I have it right?

B. Graham: There's a question of whether you're counting apples and oranges here. What we do is focus on the female gravid lice. So our numbers in fact, and the ones that have just been announced in our 2005 plan, actually have a lower treatment level than those that are in Norway. We have an ongoing monitoring program that the companies are required to utilize. If they are experiencing higher levels of lice above a trigger level, they have to either harvest those fish before the downstream migration or put a treatment program in place.

B. Bennett: I have read that the same lice we have that are a threat to our wild Pacific salmon have caused extinction of some European salmonoid populations. Is that correct?

B. Graham: First of all, the Department of Fisheries and Oceans and ourselves have not been able to show any link that sea lice are causing the decline in wild Pacific salmon populations. There's certainly a lot of speculation about it, but the Department of Fisheries and Oceans is clear that they have not been able to find a link between those. There's certainly a significant difference between Atlantic salmon populations elsewhere in the world, which were on a long decline prior to salmon farming taking place either in Norway, Scotland, the U.K. or on the east coast of North America.

B. Bennett: So it's the position of the ministry or of the provincial government that at present there has been no connection shown anywhere in the world between lice and the deterioration of wild salmon populations?

B. Graham: Certainly, some of the stuff in the Atlantic Ocean…. There clearly appear to be some linkages in some specific areas, but generally I think you have to look at that the long-term trends in sea trout populations and in Atlantic salmon populations were declining well before salmon farming ever started in an area.

B. Bennett: Madam Chair, I have about the same or a little bit shorter series of questions on the escape issue. I just did my louse questions. Do you want me to wait until the end?

J. Kwan (Chair): I'm fine with you proceeding. Just be mindful, of course, of other committee members who may have questions and final discussion on the matter.

I've read both sides of the story here in terms of Atlantic salmon survival in the wild and whether young salmon are being reared in the wild. What research or opinion does the government accept with regard to the scale of Atlantic salmon that are reared in the wild and survive and go into our freshwater rivers?

B. Graham: We think there is a very low likelihood that they would be able to survive in British Columbia. Research that has been done, which looks at the issues associated with colonization and hybridization of those stocks, says the risk is very low of that occurring, and we can effectively manage that risk to a lower level by having stringent escape management and a regulatory program.

B. Bennett: I understand that in 2001 the Atlantic Salmon Watch did some research. There was an aboriginal group, I think, or aboriginal individuals that were involved in this research in 2001. They checked out 389,000 salmonoids and found only two Atlantic salmon. I'd like to contrast that with the scientific journal, Nature, which…. I don't have a year for this. I don't know when they printed this, but they allegedly said in Nature that there are two million Atlantic salmon escaping annually. Have we reconciled that in any certain sort of way?

B. Graham: I'm not quite familiar with the Nature article you're referring to, but oftentimes when people report about escapes, they talk about escapes that take place in Canada. That would be both east coast and west coast. Certainly, when you look at escape regulations in the world, ours are considered to be basically the model for a number of different countries.

B. Graham: There appear to have been at least some that successfully spawn and raise to the juvenile stage, but there is no indication that that kind of population has sustained itself. In fact, all of the juveniles…. The numbers are all declining for the presence of Atlantic salmon in fresh water. There have been a number of years where we have not seen any juveniles in fresh water, other than might have escaped from a hatchery system where there's an Atlantic salmon hatchery on that river system.

B. Bennett: Are the DFO and the provincial government doing enough research to actually speak with

some certainty and authority on the matter of how many Atlantic salmon escape, how many Atlantic salmon spawn and how many juvenile Atlantic salmon there are out there?

B. Graham: Certainly, there are extensive monitoring programs taking place — by the Department of Fisheries and Oceans, by provincial agencies and by a number of private groups that are looking at salmon populations. If you ask the question of whether enough research is being done…. If you ask a scientist, there's never enough research being done. I feel comfortable that the kind of monitoring programs and the anecdotal information we get from recoveries indicate that the issue is very small, and the risks are very low.

B. Bennett: Hypothetical question. If there were significant numbers of Atlantic salmon out there, would they not compete successfully with the wild salmon for food and habitat?

B. Graham: I think it's very unlikely that a domesticated strain of animals would be able to out-compete a wild population and, certainly, in the small numbers that are out there that it would be able to do that. Atlantic salmon are raised to be docile, to work effectively within a salmon farming environment. I think that mitigates well against any attempt to colonize in our waters. There has never been an example in the world where Atlantic salmon have colonized outside their native range, and this is clearly not their native range.

B. Bennett: Okay. You're the expert, and I mean that with respect. I'm not. It seems to me as a non-expert that there are examples of species outside of the fish world, I guess, that I'm familiar with that have done extremely well — birds and animals outside their natural range.

B. Graham: I didn't say that exotic or non-native species cannot be successful at colonization. What I'm saying is that Atlantic salmon's success at colonization outside their native range has never occurred.

G. Halsey-Brandt: My first question is to the auditor general's department. I was very interested in this approach with the federal auditor general — New Brunswick and here. I guess I have two questions along those lines.

Was there anything that came out of here in terms of us or the federal government learning from the New Brunswick experience in relations with DFO? Does, in fact, DFO operate in two distinct management practices? I say that because for practically every group I run into touring British Columbia, or every ministry I talk to, the DFO seems to be one of their major challenges. Let's put it that way.

Is the experience in New Brunswick roughly the same? Did we learn two entirely different things out of this study, or were there commonalities between what we learned in New Brunswick and in British Columbia?

M. Sydor: Well, again, I think we have to recognize that the New Brunswick study just focused on the aquaculture issues, so in terms of DFO's role, it would focus more on the regulation of aquaculture with the provincial government there. I think there are a lot of similarities in terms of the issues they're trying to deal with there, as we are here.

I mean, there are some differences in terms of practices here, as we've just indicated, and it was explained. We've gone some way in terms of putting in better escape prevention measures by having regulations requiring reporting, better structures, etc. On the east coast my recollection is that their report says there is no requirement to report on escapes. So there are some differences in practices.

I think the main differences that would apply might be to wild salmon issues or such, and their report didn't address that as we did here.

G. Halsey-Brandt: Just, I guess, to Bud. One of the recommendations in the auditor general's report talks about identifying a lead provincial agency. I was very surprised when I read that. I would have assumed the Ministry of Agriculture, Food and Fisheries would be the lead provincial agency — if not officially, at least by default — in terms of dealing with both aquaculture and, perhaps not as much, shoreline and riverine habitat.

B. Graham: Certainly, from the perspective of dealing with the Department of Fisheries and Oceans, you're correct. MAFF has been identified as the lead agency. What we try to do is be a single window for the Department of Fisheries and Oceans if they want to deal with the provincial government to ensure that our colleagues in other agencies are engaged. That being said, it doesn't mean that once those relationships are already established, they don't work effectively with whatever ministry of the provincial government they're dealing with. But that agreement has been made, and certainly, that's the way we focus our activities.

G. Halsey-Brandt: Okay. I've just got two more real quick ones, Madam Chair.

I know part of the problem in aquaculture is that we didn't have the approval from DFO to move some of the locations to better locations. Through this pro-cess, has that issue been resolved? I think they've been trying for two years, two and a half years. Has that been resolved?

B. Graham: Coming up with a harmonized approach to the review of aquaculture licences has been a

significant issue in the past. We are making good progress at harmonizing our approach with the Department of Fisheries and Oceans. For example, there are now 96 tenured fish farm sites that are up for renewal, and over the last year we've worked cooperatively with the Department of Fisheries and Oceans to complete the CEAA reviews on all 96 of those farms. The files have now been passed to the Navigable Waters Protection Act folks in the Ministry of Transport for approval under their legislation.

Yes, it has been a significant problem in the past. We're making strides to improve those time lines for that and are gradually working towards a more effective relationship.

G. Halsey-Brandt: My final question, I guess, is around the question of public confidence that came up in one of the presentations. I would say there's very little confidence, whether it be provincial or federal, in terms of the direction the salmon are going and the protection of the species.

My question is around the Pacific Salmon Forum, I guess. I think most people would look upon the Hon. John Fraser as a pretty impartial and knowledgable individual, and he's going at it. Are there teeth in that organization, whether it be whistle-blowing or him having the ability to make recommendations for fines or other changes in legislation in terms of protecting the species?

B. Graham: The forum will be arm's length from the provincial government. What we're hoping is that the forum will try to address the question of vision and work with both the province and the federal government, helping us come up with a collective vision for where we're going with salmon. We're hopeful that that will be an effective mechanism.

The forum can report to the public. It also will report to a committee of the Legislature, although the decision of which committee it's going to be reporting to has not been made as yet.

We're also just in the initial stages of working with the forum to get it up and operational. In fact, they're going to have an inaugural meeting of forum members here in Victoria this week.

J. MacPhail: My colleagues have asked very good questions, and many of them were mine as well, so I just have two.

The Pacific Council of Fisheries and Aquaculture Ministers — how long has that existed, please?

B. Graham: It came into existence in 2003. In 2003 is when it first came into existence. It was initially developed with Minister Thibeault when he was federal Fisheries minister. It got off to a bit of a rocky start, because in that time period, we've had a couple of other changes in Fisheries ministers.

Basically, what we have had in the past is a National Council of Fisheries and Aquaculture Ministers, but that tends to deal only with issues that are national in scope, that deal with all of the provinces. We became aware that on the Atlantic coast there was an Atlantic Council of Fisheries and Aquaculture Ministers, so that could deal with the specific problems and issues between the federal government and the four maritime provinces. We basically have developed a parallel structure that will allow Yukon Territory and ourselves to have a dialogue with the federal minister where we can focus more specifically on issues related to the west coast of Canada.

J. MacPhail: Is there ever any international involvement from the United States?

B. Graham: No, there has never been, to my knowledge — certainly in the national council or in the Pacific council — any U.S. involvement.

B. Graham: The provincial government, in this announcement, indicated that it was a three-year commitment of $5 million.

L. Stephens: First of all, I'd like to congratulate the auditor general for a very good report. I think it's very thorough, and it covers an issue that's been front and centre for some time now. It's very important to a lot of people and certainly to the economy of British Columbia.

A number of colleagues have talked about the wild salmon migration and fish farms and so on. I want to talk about fish habitat. I was happy to hear that the federal government has released a report on restoring wild salmon habitat. My understanding from the actions of DFO over the last, well, quite some time is that they were only interested in conservation. I'm happy if DFO has moved past that position they've had for quite some time and are now looking at partnering with the province to address some of these other issues.

The auditor general's report, in the backgrounder, talks about the risks to the wild salmon population, and a number of those are the increased erosion loss of riparian areas and loss of wetlands and all those kinds of issues. In your response, where you talk about fish habitat, your one issue you talked about — that the province and DFO were actively engaged in changing habitat protection business practices to results-based approaches…. Could you explain in more detail what you mean by that?

R. Davis: Yes, I can answer that question. Just for a little bit of background, the Canadian constitution sort of divides responsibility for fish habitat protection. The federal government is responsible for fish and fish habitat management. The province manages land use. There are a variety of statutes that the province has to guide land use as it pertains to fish and fish habitat. The federal government's responsibility comes through the Fisheries Act. Our responsibility comes through things like the Forest and Range Practices Act, the new Private Managed Forest Land Act, the Water Act and the Fish Protection Act.

To guide our work jointly between the federal and provincial governments, we've embarked on a program, a set of consistent guidelines. There has been a fair bit of work both federally and provincially to streamline the approach we're taking around regulating of fish habitat protection. In 2000 the federal and provincial governments signed a memorandum of understanding that, among other things, commits us to try to harmonize our approach to fish habitat management. Indeed, when we rewrote the new Forest and Range Practices Act, the Department of Fisheries and Oceans actually sat on the management team to help guide that legislation. Similarly, with the riparian areas regulation, when that was brought forward, it was a joint approach.

Of late we've been working with Fisheries and Oceans Canada to develop a set of guidelines and standards to guide our approach in terms of the way we administer that legislation. There is a broad variety of kinds of issues that are being looked at in regard to our respective kinds of areas of responsibility. There are guidelines on urban-rural development; instream works; agricultural development — things like ditch maintenance, agricultural building setbacks, land clearing and those kinds of things; in the forestry area, stream-crossing guidelines around ensuring safe fish passage, protecting and repairing habitat and that sort of thing.

L. Stephens: In the past the DFO has been sometimes obstructionist in some of these areas. Has there been or is there a commitment now from DFO to be a lot more constructive in reaching some solutions on some of these issues? When I hear you describe some of the initiatives, that's what it sounds like to me — that there is now a commitment from DFO to be more positive in trying to work through these issues that affect stream protection and all these other issues. Is that the case?

R. Davis: Yes, I would say so. There has been a committee set up recently at the deputy minister and the regional director general level that's co-chaired by my deputy minister, Gord Macatee. It's called the regional directors–deputy ministers committee on environmental regulatory reform. I think the name sort of speaks for itself.

The approach is looking at streamlining the review of projects, trying to make regulatory approvals for things that fall in low-risk categories more results-based. In fact, that's the approach we took in many of the provincial regulations. We've tried to harmonize new statutes and regulations that we're doing to ensure that they pass the test under the Fisheries Act. Regulatory approvals through, say, the Ministry of Forests or the Ministry of Mines are intended to meet those tests. Provincial approval would meet a federal requirement, provided that it's in the low-risk category.

The federal government, in issues that are considered to be high-risk because of the nature of the fisheries value or the type of impact, still may require an authorization under the Fisheries Act by the federal government for those high-risk areas. But we're trying to develop very clear guidelines, both for the agencies working together and for industry, so that they know the kinds of tests that they have to make.

L. Stephens: We used to have community partners. In my community there was an organization called LEPS. They did a lot of stream restoration work. What is all of this going to mean to communities like mine that are urbanized? I have five salmon-bearing streams in my constituency, and there had been quite a bit of work done around making sure that these initiatives were carried out with these community partners. This new arrangement — what is that going to mean to on-the-ground communities like mine that are trying to restore their fish habitat streams with local partnerships?

A. Martin: I'll take a shot at that one. I think the issue that Mr. Davis was addressing is: how do you protect streams in the future? There are a number of streams where, due to past practices — they're not the practices of today — there still needs to be restoration activities that occur. In terms of the funding that the province is putting in through the living rivers trust fund, certainly there is a need to invest in those types of activities on two accounts. The first account is to make sure that those types of activities are supported over the long term. I think another equally important outcome of that support is to increase the community awareness of individuals that provide the ongoing support for the stewardship of those resources, not just the restoration of them.

In terms of the living rivers funding, that funding certainly is aimed to be a catalyst to achieve restoration and rehabilitation of those streams. It's intended to be delivered through existing infrastructure, whether it be the Pacific Salmon Foundation, the B.C. Conservation Foundation or whatever. I think the approach of the trust fund is consistent with the auditor general in trying to coordinate across the envelope in terms of these activities so that the various parties recognize what the priorities are, both in terms of the activity and geographically, so that you don't have one group doing steelhead recovery in the same stream that another group is trying to do habitat restoration.

A. Martin: In terms of living rivers trust fund, there has been $2 million put in, in 2002 and a further $5 million…. The living rivers advisory group is going through and looking at where the strategic focus of the expenditure should be. They intend to be a catalyst to bring those resources together to get the largest return on investment in terms of programs such as the community-based programs.

An absolute number in terms of the community-based rehabilitation hasn't been decided, but it certainly has been decided to deliver it through the existing infrastructure and through the community groups that are active in that and that are affiliated with the Pacific Salmon Foundation and other groups.

L. Stephens: Final question — hatcheries. Do we have more hatcheries today than we had, say, four years ago, or do we have less? And what is the role of hatcheries today?

A. Martin: Certainly, we're going through a review both provincially and federally in terms of the role of hatcheries. Provincially we have the same number of hatcheries. Our provincial hatcheries are producing, on average, ten million fish per year. The large majority of those fish are being stocked into inland lakes that are basically put-and-take.

There is a relatively small program that supports cutthroat and steelhead, which are anadromous fish. They're analogous to salmon.

There is a review going on both within the province and within the federal Department of Fisheries and Oceans in terms of what the appropriate application of hatchery augmentation is. Certainly from the provincial perspective, there is a role for hatcheries to produce angling effort on a number of streams. We have 13 streams provincially that are stocked with steelhead. Federally they have a large number of both major and minor facilities that stock chinook salmon and coho salmon and incubation facilities for chum salmon. There are a large number of spawning channels.

The issue around hatcheries is: to what extent do they affect the diversity of the salmon stocks? There is a great amount of both debate and research being focused on those issues.

R. Hawes: I'm not sure who would answer this question. It's something I don't see in the report and yet, where I live on the Fraser River, it's what I hear an awful lot about anecdotally — the conflict between the commercial and the aboriginal fishers and accusations of overfishing and poaching and all kinds of things. I don't see it covered here in the report, and I'd be interested to know if someone is taking a very serious look at the prospect of overfishing by either aboriginal or commercial fishers — or sports fishers, I suppose — and poaching.

If there is no veracity to the stories or the anecdotes that go around, is someone out there going to be coming forward to provide evidence to the public that they should not be getting aroused by some of this? Some of the stories are, I think, pretty inflammatory.

The responsibility for the management of the fishery — including the stock assessment and catch monitoring and the enforcement of salmon fisheries — lies with the federal Department of Fisheries and Oceans. There is currently an inquiry going on under Justice Bryan Williams that's looking at the concerns about the poor escapement results that took place in the recent salmon season. The issues they're looking at are a broad range of issues, from high–water temperature conditions that exist in the river to issues associated with the enumeration programs — the echo-sounding evaluation programs of how many fish are actually going in the river. They're also looking at issues associated with illegal fishing and removals. The province is monitoring that process. We're actively staying engaged, but since it's not our primary area of responsibility, I have a watching brief on that.

We also were involved with the joint task group report that was looking at the issues of treaty settlements and the associated fisheries components of those treaties. We're waiting for the Department of Fisheries and Oceans to provide some guidance on what they're going to do with the recommendations from Drs. Pearse and McRae on that particular study.

R. Hawes: My second question has to do with habitat. Again, where I live, and I know it's something that I've personally made quite a lot of noise about…. That's the siltation of creeks and streams in the Fraser Valley, where I live. Fisheries policy has precluded the removal of sand and gravel because they say it's protecting fish habitat, or it is fish habitat. Yet I know that where I live, in some of the creeks and streams now the stream bed is higher than the surrounding land. Unless the salmon can walk over gravel, there is absolutely no chance of any spawning. The folks who live near where I live see this every day, as their homes are flooded when there's a day of rain.

I know we've got some removal from the Fraser River that has been agreed upon, but I believe there's a severe degradation of habitat because of siltation. I wonder what's being done about that.

J. Alley: Yes, this has been a significant issue. As you probably know, there have been a series of negotiations between Land and Water B.C. and the federal government using the mechanism of the DMs-RDGs committee. In June, I believe, a five-year gravel plan was concluded. We believe there is now a commitment to work more cooperatively together with the federal government using that five-year gravel plan so that the kinds of approvals that are required during that narrow in-season window when you can go and take gravel out will now take place.

I think the risk management framework that Mr. Davis talked about earlier has been very, very helpful in being able to make a distinction between low-risk and high-risk kinds of activities. That kind of broke some of the logjam, and that's why the five-year plan has now been concluded between DFO and Land and Water B.C.

R. Hawes: I'm talking, also, about the tributaries of the Fraser. I know there are — again, perhaps it's anecdotal — groups like the Seabird band who took it into their own hands to clear some blocked channels and within an hour saw massive amounts of returning salmon that they hadn't seen for years. This is stuff that the folks who live along the river have known for a long, long time — that when you plug the tributaries that are actually the spawning channels with sand and gravel, the fish don't come back. I'm just wondering why it is that DFO, and perhaps us working with them, doesn't seem to get that, because year after year these creeks and streams remain plugged. The fish aren't coming back into plugged streams.

B. Graham: I think the debate between the province and the federal government — DFO — over the appropriate level and nature of gravel removal from the Fraser River and its tributaries has been an issue that's been ongoing for the last few years. We felt it was a significant breakthrough this year to develop the agreement with the federal government to deal with removal of gravel from the mainstem river, which is critical from a flood protection perspective in that particular area.

As we work our way through this, I'm hopeful that we'll be able to address some of the secondary issues you're referring to. But we had to get the first one broken before we could move into the other areas. I think there is obviously a lot of debate about gravel removal and where appropriate levels of gravel removal are, but I think we are making progress on that file, and I would be hopeful for the future.

R. Hawes: Okay. Just as a comment to put on the record, I can tell you that in Hatzic Prairie, as an example, we've spent hundreds and hundreds of thousands of dollars through PEP, provincial emergency preparedness, to mitigate flood damage to help folks who have been flooded. But they're flooded by the water that should have been in the creek and stream channels. I can tell you that any fish eggs that were in those creeks and channels are distributed on the farmers' fields throughout the Hatzic Prairie and have been for a number of years. So there are no returning fish from Hatzic Prairie, and I would hope that someone with DFO, as you're negotiating, would at least come out and look. The folks who live in my constituency would also like someone to come out and just take a look at the damage that's being done not just to their homes but to the fishery.

Having said that, I did have a question, too, for Mr. Davis about the streamside protection regulation versus the new riparian area regulation that has now been agreed upon, I think, between the province and federal government.

R. Hawes: My take on it is that we've moved from a non-scientific regulatory approach that said, "Stay away from the creek or stream; don't do anything in it," to an approach that — and you can correct me if I'm wrong — applies some science and actually says: "How do we make the function of the creek or stream better?"

There are some people that worked on this that impressed upon me, for sure, that we should stop looking at fish and start looking at function. Fish come to properly functioning streams and waterways, and they don't come to creeks and streams that don't function properly. That leads back to the problem in the Hatzic Prairie and other areas where creeks and streams are degrading, and so fish are dying. They are going away. I'm hoping the new RAR will move us closer to making sure that creeks and streams function better, particularly in the interface as urban growth moves closer to creeks and streams.

R. Davis: The new riparian area regulation comes under the Fish Protection Act. Its intent is to require vegetated setbacks for commercial, industrial and residential development — so for new developments. It differs from the old streamside protection regulation in that it's intended to protect the features, functions and conditions of fish habitat.

The way the regulation works is that it's basically a directive to local government to put setbacks in place following an assessment. The assessment is science-based. It's a detailed assessment based on individual creeks. The assessments are to be carried out by the property developer. So it's based on science, and it's based on the need, as I said, to protect the features, functions and conditions of fish habitat.

K. Johnston (Deputy Chair): I'd just like to step back to a question Randy asked about overfishing. I'm kind of confused. I understand DFO is in charge of setting quotas and all of that, but you suggested that we have a watch role, I think you said, as a province with regard to overfishing. I just wanted to know: what is actually the interaction on that? How does it work? If the province feels that there is overfishing going on, what role might you have as a consultant or a prodder or someone trying to protect a British Columbia river, with regard…? I want to know how the dynamic works between the two agencies.

B. Graham: Well, in an area of overlapping constitutional jurisdiction, the way the Fisheries Act is written is that the federal government is responsible for all seacoast and inland fisheries. What they've done with the province is reached a delegation agreement where they delegate the responsibility for the regulation of freshwater fisheries to the province, and that is conducted by our colleagues in the Ministry of Water, Land and Air Protection.

Clearly, this government is interested in wild fisheries, in marine fisheries management issues, because it does make a significant economic contribution to the economy of British Columbia. We're trying to provide a function whereby we monitor the activities of the Department of Fisheries and Oceans as it relates to the management of fisheries. We try to provide advice, where necessary, on what some provincial objectives and views might be. We're interested in conservation, of course, because without conservation you're not going to have a fisheries resource to depend upon, but we also want to look at the wise-use and best-use decisions that they're making. We try to follow those discussions and provide input where we can.

We try to work collaboratively with the Department of Fisheries and Oceans and use new vehicles like the Pacific Council of Fisheries and Aquaculture Ministers meetings as an avenue to get those views before the federal minister before they make decisions that can affect the economy of B.C.

K. Johnston (Deputy Chair): Has there ever been any discussion about — how do I put this? — a subconstitutional agreement whereby the province might take over the management of that resource?

B. Graham: I don't know whether I want to speculate on how long it would take to reach a constitutional agreement. I think we should focus mainly on how we can develop effective administrative measures to work cooperatively with the Department of Fisheries and Oceans so that the views of the people and the government of British Columbia are before them before they make decisions that will affect this region.

I just have one other question. The auditor general's report talks about the difficulty of the scientific gaps and uncertainty of knowledge. I think that a lot of us in the public out there are a little bit confused too. It's sort of, if you will, the two sides of the debate, the information provided by both pro- and anti-aquaculture — the proponents and those against.

I don't know if you can answer this question, but I've got to throw it out to you, because as a member of the public watching this badminton game go on, I was wondering: do you have any idea at what point in the future we might have enough knowledge to make everybody fully confident that it's not doing any environmental damage, etc.? I mean, everyone's talking about groups and studies and that scientists need to look at more. Does anybody have a sense down there about when we might have a feeling of comfort in the public of British Columbia?

B. Graham: Well, I think that's exactly one of the issues we're looking to the forum to be helpful in trying to advance. I make reference to a study that was done by the Pacific Fisheries Resource Conservation Council, which is an independent organization as well, that tried to put to rest the debate in aquaculture. It was not successful. Although we supported the views of the study, it was not successful in putting the debate to rest.

I think what we're basically saying is: do we have perfect science? The answer is no. Do you ever have perfect science? I think the answer will always be no to that as well. What you have to do is make decisions based on the best available science you have at a point in time and be prepared to look at continuous improvement of your management and regulatory regime to try to deal with that.

When will we win the debate? When will we do that? With some folks we'll never win the debate. The bar will just be raised higher and higher as you make some changes. I'm hopeful that through vehicles like the forum we may be able to raise public awareness of the issues, make sure that people see that there are very positive studies associated with aquaculture that are out there. Again, I was extremely pleased by the conclusions of the auditor general and acknowledgement of the progress we've made in the province on developing a sustainable aquaculture regime.

Do we have more to do? I couldn't honestly say. The answer to that is always yes. You know, there's always more that you can do. We're continuing to look at new research to try to deal with that.

I found it interesting just recently that a study was done on Atlantic salmon escapes in countries that have Atlantic salmon populations and Atlantic salmon farming. Interestingly enough, this was done by the World Wildlife Fund. In fact, the regulations that they compared the other countries' regulations to on escapes were B.C.'s regulations. They used us as a standard to judge other countries on escapes, so I think we have made some significant progress. We're going to continue to try to make that progress.

B. Bennett: Just one last question, this one for the auditor general. It's a follow-up to part of Mr. Hawes's line of questioning. When you decided that the office was going to do this research, this study, did you consider looking at some of the other factors that have a potentially negative impact on wild salmon, such as the commercial fishery and the different components of the commercial fishery and, also, the element that Mr.

Hawes spoke of: the habitat degradation as a result of the piling up of gravel and so forth? Or did you decide to concentrate on the potential impacts of aquaculture on wild salmon?

M. Sydor: In terms of the commercial fisheries, our view has been that that's primarily a federal responsibility. So we look to the federal auditor general to decide whether they should address that particular issue. That was something we didn't include in our particular review. And we didn't look at specific issues in terms of habitat degradation such as the references that were just made a few minutes ago. What we did was take a broader approach and try to see whether we had systems in place to deal with those sorts of issues, whether there are adequate regulations and laws in place to make sure that habitat is protected initially and, if it's not, if we have programs in place to restore it.

It's basically along the lines that we've been discussing this afternoon, but I don't think we would have picked specific issues and looked at those and sought to see whether those were being handled well. What we wanted to do was take a broad look to see whether government over all is able to deal with the sorts of specifics that you're talking about. We didn't address any specific examples like that, no.

B. Bennett: Did the auditor general for Canada look at the impact of the commercial fishery on wild salmon?

M. Sydor: I don't believe their report addressed it this particular time. I think in the past they have looked at how DFO manages commercial fisheries, but in this particular case, I think their focus was very similar to ours, focusing on the DFO role in terms of habitat and aquaculture issues primarily.

B. Bennett: It just seems to me that if we're trying to figure out the future of wild salmon, we would want to look at all of the major influences on wild salmon. And it seems to me that you'd want to include the commercial fishery — the illegal fishery and the legal fishery. But that's just a comment.

M. Sydor: The federal government just looked…. I mean, the auditor general didn't look at it at this particular point. He has looked at it in the past. In terms of looking at the specifics as you've indicated — whether there's an illegal fishery or whether the commercial fishery was too high specifically for this year — as was mentioned earlier, there is an inquiry underway under the federal government.

As well, recently, as the auditor general indicated some time ago, we were asked to appear before the federal Committee on Fisheries, and they were focusing on those sorts of issues in terms of what happened to the Fraser sockeye this year. So there was interest there as to whether there's overfishing, whether there's poaching going on and to what extent. That committee was interested in those sorts of questions, and we were there and provided the sorts of answers that we could.

Seeing none, thank you very much to our witnesses. Thank you to the ministry representatives as well as to the auditor general's office.

Committee members, we're ready for internal discussion on this to entertain motions, if there are any.

J. Kwan (Chair): Any other questions or discussion on the motion, committee members?

R. Hawes: Is it appropriate for the committee to…? I don't know if there's going to be a follow-up report, but I assume there would be.

R. Hawes: And I wonder if it's appropriate for the committee, in accepting the report, to make a recommendation back that in any subsequent report at least the issue of overfishing be addressed. If it's not audited, perhaps it could be suggested that there are people looking at it or whatever. I think that's an important component of what's happening to our wild salmon stock. It's a question that's out there in people's minds.

J. Kwan (Chair): Thank you, Mr. Hawes. There are a couple of ways of doing that, Mr. Hawes. We could move that as an amendment to the main motion, or you can move that as a separate motion, if you like. Or you can simply make that request to the auditor general, as his office will be doing a follow-up report.

J. Kwan (Chair): I'm willing to entertain however people feel that they want to proceed.

R. Hawes: I'm happy to leave it just the way it is, because I'm sure he heard that. I'm guessing. He'll probably come forward with at least a statement about it.

J. Kwan (Chair): Alternatively, as well, just for people's consideration, we can actually minute it in our report so that the request has been made. It's entirely up to the committee in terms of how they want to proceed. A second motion is completely in order.

J. Kwan (Chair): Let's discuss the main motion, then. I'm going to go back to the main motion in terms of questions related to the main motion or discussion related to the main motion moved by Ms. MacPhail. Committee members?

J. Kwan (Chair): On the second question. Mr. Hawes, is it your wish to move it as a motion, or…?

R. Hawes: Depending on what committee members…. I'm just as happy to see it minuted.

J. Kwan (Chair): It's up to the committee members. You would like to have it minuted. Okay, we will then ask specifically….

J. MacPhail: To the auditor general: because this is a tripartite report, will you be doing a follow-up?

J. Kwan (Chair): Okay, just to follow up, then. We'll simply minute the issue that Mr. Hawes identified for the follow-up report related to the question around overfishing.

J. Kwan (Chair): All right. Are there any other motions that anybody would like to table for discussion? Seeing none, we're now moving on to the next agenda item. Thank you very much, everyone.

The last item on the agenda is the draft report to the House, committee members.

J. Kwan (Chair): You have all received, I believe, a draft report by e-mail. We also have a copy of the draft report here for committee members' information.

Historically, committee members, when we deal with the draft report to the House…. While it is a confidential report, it has not been our practice to go in camera, although if that becomes a debated issue, we can certainly entertain that discussion. If it's not, committee members, I will simply suggest that we stay on the public record regarding the discussion of this report.

J. Kwan (Chair): The Deputy Chair says it's fine with him, and I see no objection from any committee members, so we'll proceed as I stated.

Okay, committee members, the report is before you. I now invite comments and discussion from the committee.

J. Kwan (Chair): All right. Actually, maybe I could suggest this. If you have suggestions about the report, each committee member can obviously go through all the pages in order, and then others can jump in as we proceed.

J. MacPhail: I missed this morning's meeting, and I understand that on the issue of the Nanaimo doctors, we're not going to discuss it any further, and that's fine.

I do note that two things happened during the discussion of the auditor general's report on the Ministry of Health Services' alternative payment program for physicians. One was that we received correspondence from a group of Nanaimo emergency room physicians who challenged some of the ministry's information. I understand from this morning that the Deputy Minister of Health Services has agreed to follow up in correspondence with those physicians directly, which I think should be in the report. It's a challenge, and she's…. Am I correct in understanding that she did agree to do that herself?

J. Kwan (Chair): Yes. Just to refresh committee members' minds, at the beginning of the meeting today we had an unfinished business item, which was related to the letters sent to me as the Chair around the Nanaimo doctors' dispute and the information presented from the ministry. I had requested, at the end of that discussion, that the deputy minister respond directly to these individuals, and the deputy minister advised that she will be doing that, and she will copy the committee on her response.

The committee decided that they would…. There was some motion put forward that the committee would make sure that the government would provide a firm rejection of job action by physicians that puts the public interest at risk. That motion was controversial, but it did pass. I'm wondering why it isn't included in the report.

J. Kwan (Chair): Historically, just by way of background — and I'll ask Josie to also comment — we don't necessarily put motions in the report in terms of motion by motion. However, it is completely appropriate if committee members want their motions or that information to be reported in our report. That's completely appropriate and within the mandate of this committee.

Also, just by way of information as well, clearly, the request to the ministry around the response to the Nanaimo doctors only just took place today, so it's therefore not included in the draft report.

J. MacPhail: Okay. Sorry. Neither is it a criticism. This is not a criticism, Madam Chair.

J. Schofield: Perhaps I'll deal with the question of the correspondence first, before the whole question about motions. If you look on page 2 at the top under "Committee Inquiry," the very first paragraph talks about how the committee meeting occurred very soon after the Nanaimo doctors' dispute. You'll note that I have tried to sort of capture what happened that day by saying that much of the discussion focused on the general issue of physician compensation. I have also, at the end of the report, referenced the correspondence related to that dispute. It seems to me that we could, after the committee recommendation on page 3, have follow-up — something like that — and record today's decision just in a couple of lines, if that would be appropriate.

J. Schofield: On the general question, during this parliament in which I worked for PAC since the beginning, in each of the annual reports the practice has been to only report on those motions that are directly related to the recommendations of the auditor general. There was one session when the committee decided to actually formulate its own set. Because other motions that committee members discuss during their reviews are recorded in the minutes, I have tended to just not incorporate them into this document because they're already recorded in the official minutes of the meetings — mainly for conciseness purposes. I do try to focus on the areas where I think there's a collective agreement which will lead to you accepting the recommendations.

K. Johnston (Deputy Chair): It just occurred to me now, and maybe I'm way off base…. Should we not be doing this in camera? The reason I ask that is that if we go through the whole thing on a public basis, we're effectively releasing the report before you've had a chance to table it. I don't know. Maybe we can ask the advice of the Clerk. I'm just a little confused at the moment.

J. Kwan (Chair): Sure. It was a tradition that the late Fred Gingell had started, and it's a tradition we've been following since, but Mr. Clerk, you're certainly welcome to respond to that.

C. James: The committee in the previous parliament and the committee early in this current parliament had decided to conduct its reviews of any of its reports to the House in a public forum. Consequently, that's what you have before you today. There are ways of limiting that debate, but that's been the practice, as the Chair rightly says, that the late Mr. Fred Gingell promoted in the former parliament and continues today.

K. Johnston (Deputy Chair): Okay. I know this has to be tabled at a certain time in confidence. It just dawned on me that we're sort of doing it in public.

J. Kwan (Chair): Back to the discussion about the report in terms of changes.

So, Josie, you will come up with some wording with respect to the request that Ms. MacPhail had made, and then we'll incorporate that

B. Bennett: What did we just agree to there? There seemed to be two parts that were suggested. One dealt with the follow-up that the Deputy Minister of Health Services is going to do with regard to the Nanaimo doctors, and I don't have any issue with that. Was there anything else around a motion that we were going to add to the report? No?

J. Schofield: I was just clarifying another issue that was raised about the fact that motions were passed and why they are not normally recorded in this document.

J. Kwan (Chair): So there were two requests from Ms. MacPhail to clarify. One was to record what took place this morning under the "Unfinished Business"

item. The second was to record the information about the motion being moved around. I don't have the exact wording of the motion, but…. Actually, it was a motion that you moved, Mr. Bennett. Anyway, I can't remember the wording of it exactly. Josie has it, and then she can sort of work around to somehow incorporate that somewhere in the report. So, that was the other request.

J. Kwan (Chair): That's Ms. MacPhail's suggestion. So, committee members, if you don't think that should be done…. I'm canvassing everybody. This is why we're having this discussion.

B. Bennett: I think what I heard from the Clerk was that unless the motion is directly related to the recommendations, it wouldn't normally be included. I don't have really strong views about this, but before we decide it, if we're thinking about having it included, I'd like to have it read back and know exactly…

J. MacPhail: I have it. The reason why I'm suggesting this is because…. I voted against this. I voted against this, but it was a very strong recommendation by the government members, and it dealt specifically with the vast majority of the testimony from the Deputy Minister of Health Services at the time. It was moved by Mr. Bennett that the committee recommend that the government provide a firm rejection of job action by physicians that puts the public interest at risk.

As I remember it, it flowed from discussions of recommendations of the auditor general, but the auditor general himself or his office did not make any such recommendation. It came from the committee.

J. Kwan (Chair): Yes, that's correct. And just for committee members' information before we move on to further discussion about this, it is not historically a practice to record every motion that's been moved in the report, and primarily the motions that are recorded are the motions related to the auditor general's report. However, there is nothing that precludes the ability of the committee to do that in terms of reporting these kinds of motions.

R. Hawes: Well, okay. Being a traditionalist, if the tradition is that we conduct these meetings in public forum, that's great. If the historical precedent is that we don't include motions, then I'd be happy to see it not included. I'd suggest we just make the change that was suggested, which is to put in here somewhere that the deputy is going to provide a written answer to the doctors in Nanaimo, and let's just let it go and move on.

J. Kwan (Chair): Okay, committee members. That's one suggestion from a committee member. Is it the wish of the committee to move in that direction? What's the wish of the committee here?

J. Kwan (Chair): So we want this by way of a motion? When everybody's saying aye….

R. Hawes: She wasn't going to put the motion in the…. We're saying: "Fine. Carry on. Don't put it in."

J. Schofield: Sorry. Just to clarify, Chair, my understanding was that what I have been asked to insert is the committee's decision made today to ask the deputy minister to respond to all that correspondence.

R. Hawes: I don't think we asked her to. I think she said she would do that. Didn't she volunteer to do that?

J. Kwan (Chair): Perhaps this, then. Maybe I can make this suggestion. What I'm hearing from the committee is that we do not want the motion recorded in the report. We do want the information that took place today under "Other Business" recorded in the report somewhere. Perhaps as a saw-off somewhere in the report we can actually record that a motion was made requesting, etc., so that it's not actually a formal part of the motion and the recommendations.

R. Hawes: It's the same thing. I don't think so. I think the way the minutes are recorded right now….

G. Halsey-Brandt: Maybe just at the bottom of page 1 or something, where it's got the ministry…. You could just add a line, Josie, that at a subsequent meeting the deputy minister indicated that she would respond to the document.

J. MacPhail: There are two issues. Sorry; we've already dealt with that issue. Everybody has agreed to that. Sorry, Greg, but everybody has agreed to that issue. We're dealing with the motion that Bill Bennett made that you guys are objecting to including in the report. There are two separate issues.

J. MacPhail: The first issue that you're addressing has been dealt with, and we all agree to include it.

G. Halsey-Brandt: I'm sorry. Since they were dealing with the same thing, I thought it was getting mixed up. That was just a different way to handle it.

The second issue that flowed from that report was a motion by Mr. Bennett that the committee recommend that the government provide a firm rejection of job action by physicians that puts the public interest at risk. I'm suggesting that we include that in the report. The government members embrace that wholeheartedly; I voted against it. The government members are now saying they don't want that included in the report. Fine, Madam Chair. We'll just refer to the minutes. I'm astonished that they don't want it included in the report, but they don't, so it's fine.

J. Nuraney: It's fine. I just agree with Ms. Joy that we should just let it go.

R. Hawes: I do recall quite a number of motions that have come forward in this committee since I've sat on it that were not included in the reports that went forward. There were motions actually brought forward by Ms. MacPhail.

R. Hawes: It may well have passed, but if the tradition is…. That's what we just talked about. If the historical tradition is that they don't get reported, why would you be astonished that we're following tradition? Sorry; I don't understand that.

J. Kwan (Chair): Maybe I can just ask the Clerk to clarify it in terms of what the committee could do with respect to reporting — and that there are actually no precedents set with respect to what's in the report. Anyway, we just had that conversation, and perhaps coming from Mr. James would be more…. How would I pose it?

J. Kwan (Chair): Perhaps it would appear to be far more non-partisan in some strange way. I'm not sure.

C. James: I understand the committee has decided against inserting the motion in the report to the House, which is fine. The Chair just wanted me to explain that, in fact, you can do whatever you want in your report.

J. Kwan (Chair): Okay. So now we're clear that reports can contain whatever committee members want them to contain. That really is the practice. That's the tradition.

Having said that, committee members, are there further comments relating to this report?

R. Hawes: I do have one, and that's with respect to the eligibility for disability assistance.

J. Kwan (Chair): Yes, we know the section, but do you want to propose a change?

R. Hawes: Maybe the auditor general…. I don't know if he can take part in this or not, but as I recall the discussion that went on at that meeting, the auditor general acknowledged that because the assessors were non-professional and the government could have no confidence in all of the assessments that had been done on the people who were receiving disability assistance, they all would have to have had the new form filled out but not in the short time frame that was allotted. They all would have to have it over….

I recall asking several times how it could possibly save any money if they still had to do the mailing to everyone that was receiving disability benefits. I think there was an acknowledgment that it would all have to be done but over a longer period of time, and I don't see that in here. In other words, there would have really been no cost-savings. If I recall, that's the way our discussion went.

J. Kwan (Chair): Just for the committee members' information, this is for the committee members' discussion only. I see Josie has her hand up, and I suspect that she might actually have a more…. Perhaps she has some reflection about what took place in the meeting and comments around this suggestion.

J. Schofield: I think if members look under the heading "Ministry Approach," the first paragraph…. It was actually the deputy minister that was responding, not the office of the auditor general, as I remember, and that point was made. The last line of the paragraph says: "In addition, a survey would have required a statistically valid sample size." Then she gave two other reasons, one of which was your point. So if you would like it included, it's not a problem.

R. Hawes: What I'd like reflected would be what the auditor general said in response to the questions that were asked directly of him and he answered. That was that yes, he acknowledged that we would have to send out 18,000 whatever it was — forms — but not in

the compressed time frame. We could do it over a longer period of time. My specific question back was: if you still had to send them out, how could it possibly save money? You still have the same number of forms sent out.

If you were to review the minutes, you would find that he responded that we would have to send all those forms out. So my question — the whole line of questioning — was: if it cost too much money, how would we have possibly saved money? I think if we went back and reviewed the Hansard….

J. Schofield: Yes, I will review it. I happen to have the final right here, but it might take me too long just to look. I will take your point, though, Mr. Hawes.

J. MacPhail: This particular one I think…. Sorry; I should back up. We just in the previous discussion around the Salmon Forever report established or assumed that there's always a follow-up review done, but in this particular one, we decided that there wasn't going to be a follow-up review done. I just thought that maybe we should note that in the report. The committee decided that there would not be a follow-up review.

J. Kwan (Chair): That's correct. There was a motion to that effect as well. So on those two points, Josie will look in the minutes to see whether or not the issue Mr. Hawes had raised is in fact reflected. Then I presume that if it is, she'll find some wording related to that and will send that information out for committee members' review.

On the second question that Ms. MacPhail identified, I see heads nodding all around the table, so that would be recorded in this report as well.

Auditor General Audit of the
Government's Review of Eligibility
for Disability Assistance

J. Schofield: If I could just draw members' attention to page 9 again, you'll see I've highlighted "Draft Committee Recommendation." The reason for that is that in your discussion, although there were a number of motions passed, the committee didn't actually have a motion endorsing the conclusion of the auditor general's report. But I think the intention of all the members was to do that.

J. Kwan (Chair): Sorry, Josie. I thought that we did. It's my mistake if we didn't. Was it because we didn't have quorum that day?

J. Schofield: No. To be blunt, I think you might have got distracted by other things.

J. Kwan (Chair): Oh, okay. That sounds to me like it's an oversight. So we should actually….

J. Schofield: I framed it, but I would like the committee to endorse that wording, because I shouldn't just conjure these up from….

J. Kwan (Chair): Yes. I guess after we finish dealing with this report, we should correct that oversight so that it can be reported to the House that the committee's actual intention was to endorse. Therefore, we should have our motion endorsing the recommendations from the auditor general's office. Okay?

J. Kwan (Chair): Yes, the conclusion. We can do that now, I'm advised by the Clerk.

B. Bennett: Yes. I'd like to put a motion out for discussion on what I think is a small amendment on page 4 to report No. 5. In the second paragraph, under "Summary of Report," where it says, "The report was prepared using generally accepted accounting principles," I'd like to suggest that we add, after the word "using," the words…. It would say, "The report was prepared using, for the first time in British Columbia…," and then carry on. Given, I think, the historic significance of the fact that the province has started to use GAAP, it ought to be reflected in the report.

A. van Iersel: Just to clarify, my understanding of this paragraph was that it referred to the auditor general's report and not ours. Is that correct, Mr. Auditor General?

J. Schofield: The report, this section, is referring to the auditor general's report. Yes.

W. Strelioff: Better wording for that sentence would be: "The report was prepared using key financial reporting principles, such as completeness, relevance." The phrase "generally accepted accounting principles" doesn't really apply to that context. If you

just change it to "using key financial reporting principles" and take out the word "GAAP" and go on from there….

What my colleague Mr. van Iersel said is correct. That refers to a report we prepared.

A. van Iersel: Just to clarify for the members here, the reason you can't use GAAP is because when you include enterprises such as B.C. Hydro on other than a modified equity basis, that technically is not GAAP. I know that's the auditor's preference, but under GAAP, you can't do that.

G. Halsey-Brandt: Just on the bottom of page 13…. It's really to Josie. We've dealt with 23 of the 24 recommendations from the Ministry of Management Services. Were we expecting, or did we get by correspondence, that last recommendation you've got there that they…? Because of the complexity, they didn't actually work on it, I think, until the end of October and the completing administrative thing in November. That last one wasn't to come back here in any sort of written form? Or did we get a letter on it?

J. Schofield: No, but you do raise, I suppose, a concern I have here again. After you had heard the presentation from the office of the comptroller general, there was no decision by the committee. You didn't either accept or reject the report, so of course, I couldn't add anything there.

It is unusual, of course, for the comptroller general to actually do follow-ups. Normally, it's Wayne's job. It's his job, and I thought that, well, under the terms of reference…. It might screw up the terms of reference if we start accepting the comptroller's follow-ups. I think it's better left, if that's all right.

Okay. Other comments, committee members? None? I'm now going to ask for a motion to adopt the draft report with the proposed changes.

J. Schofield: So that members are aware, the plan is to incorporate today's reviews of three main reports into this draft, which is going to be quite hectic for me. I think I will need three whole working days and nights to do it. But I anticipate sending out a final draft, hopefully by Thursday afternoon — at the latest, Friday — with a deadline for final sign-off, say, Monday at noon.

J. Kwan (Chair): I'm fine with that. I think that we may not call a meeting for final sign-off. The documents will be e-mailed to everyone. If you have comments, e-mail them to the Clerk's office and copy the Chair and the Deputy Chair. The deadline to do that, I would say, is Monday morning by 10 o'clock — next Monday.

J. Kwan (Chair): Noon would be fine too? Okay, noon is the deadline. If we don't receive anything by February 7 at noon, the second draft report that you'll receive will become the final report. If there are many suggestions for change, it may be that I have to convene a meeting very quickly, and I will engage in a discussion with the Deputy Chair about that. Okay, committee members?

All right. May I have a motion to adopt the proposed draft recommendation as put, incorporating all the elements that we talked about today that were acceptable to committee members. So moved. Okay.

Committee members, any other discussion? You can enter into discussion with a motion.

B. Bennett: Madam Chair, with regard to the short discussion that we had just before lunch about the time that presenters take….

J. Kwan (Chair): Sorry; that's not about this motion. Can we just finish off the motion and vote on it first?

J. Kwan (Chair): May I also have a motion from the committee for me to table this report in the House when the House is sitting?

B. Bennett: Sorry, I wasn't following along closely enough. I just wanted to ask the Clerk: is there not some way that we can impress upon the presenters that if we have an hour and a half or an hour on the agenda and there are two presentations at least, they should confine themselves to maybe 15 or 20 minutes each?

C. James: We do that, but we also do it through the comptroller general, who encourages the witnesses from the government to abide by the amount of time that's available, bearing in mind that there are other witnesses and officials that will be presenting as well. We can be a little more strident about it in the next session.

J. Kwan (Chair): We certainly try, when we do our planning meetings, to talk about how we can best effectively get the information on the table but, at the same time, preserve the precious time we do have so that we can actually get through all the business that's before us. We aim towards that on a regular basis.

J. MacPhail: Perhaps we could highlight the discussion today and send it to all of them — the Hansard.

W. Strelioff: Earlier today I gave you a notice about a report related to the Abbotsford health care and cancer centre. My understanding is that that report from Partnerships B.C. is going to be made public on Monday or Tuesday.

On Thursday of this week we will be tabling a report on the work environment. If you remember — some may remember — a couple of years ago we did an examination of the work environment within the context of the ministries. We've done a follow-up of that using the same survey instruments in the same way. We'll be tabling that report on Thursday. So that's just for your information.

C. James: Very briefly. The effect of prorogation, as I've noted at the bottom of the agenda, is that on February 8, 2005, at 10 a.m. this committee ceases to exist, and at that time, you'll be relieved of your onerous responsibilities on this committee until the next session or the following parliament, whichever occurs first.

A. van Iersel: I was not trying to add to your motion. I was just trying to clarify, as is my past practice. I do share documents with the presenters for technical accuracy — questions only, not wordsmithing.

A. van Iersel: The other thing I'll acknowledge is that we do share agendas with the presenters, but I will do more to emphasize the allotted time and to make sure there is plenty of time for questions. As the Clerk has said, we'll reinforce that with the presenters going forward.

L. Stephens: I think the issue is the response to the questions. If they could be more succinct and to the point, that would be more helpful.

Seeing none, thank you all for your participation. It's been grand, and we'll see you next week.

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REPORT OF PROCEEDINGS (Hansard)

SELECT STANDING COMMITTEE ON PUBLIC ACCOUNTS

REPORT OF PROCEEDINGS
(Hansard)

SELECT STANDING COMMITTEE ON
PUBLIC ACCOUNTS