1994 Legislative Session: 3rd Session, 35th Parliament
The following electronic version is for informational purposes only.
The printed version remains the official version.
TUESDAY, MAY 3, 1994
Volume 14, Number 23
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The House met at 2:05 p.m.
A. Warnke: Visiting with us today is a group of students from the adult literacy centre in Richmond, specifically the riding of Richmond East. On behalf of myself and my colleagues for Richmond East and Richmond Centre, I would like to take this opportunity to welcome them to Victoria as they tour this precinct and our lovely city. May the House make them welcome.
It is my pleasure to introduce Keith Parker, a grade 3 student at St. Michaels University Junior School. He lives in James Bay and has often wondered what goes on under the big dome. I've asked myself that question as well. Today he's here to find out, and hopefully take an excellent report back to the school director, Mrs. Gaye Stone, who kindly excused him from classes this afternoon. Whether we're launching a new career or not remains to be seen, but let's try and educate Master Keith, even if we can't inspire him. Would the House please make him welcome.
Hon. M. Sihota: Witnessing the proceedings today in the House are a number of people who have just recently moved from Ottawa to Victoria -- a wonderful move and something that more and more people are doing. Nothing to do with my last....
Hon. M. Sihota: I'm amazed what a reaction I get from the opposition just when I give introductions.
In any event, Jordan Campbell and Mike McWilliams are the newest residents in the riding of Victoria-Beacon Hill. On behalf of their MLA, I'd like to welcome them, first of all, to Victoria and, secondly, to witness these proceedings today.
The Speaker: Hon. members, before proceeding with the order of business, I would like to respond to the hon. member for Powell River-Sunshine Coast.
On Monday last, the hon. member for Powell River-Sunshine Coast sought to move an adjournment of the House pursuant to standing order 35 to discuss a definite matter of urgent public importance -- namely, comments attributed to the Leader of the Official Opposition in Ottawa with reference to the separation of Quebec from Canada. Notice was received in the Speaker's office, for which I thank the hon. member.
Standing order 35(1) provides for adjournment of the House for the purpose of discussing a definite matter of urgent public importance. The proposed matter for discussion, however, must relate to a genuine and immediate emergency, such that the ordinary daily business of the House would be set aside. The words "urgent public importance" in the standing order suggest a sudden or unexpected occurrence; hence the essential element of suddenness must be present.
I think all hon. members would agree that while the matter he raises is definitely of public importance for the province of British Columbia -- and, indeed, for Canada -- nonetheless it has been a continuing and longstanding situation of concern, which, in my opinion, cannot be brought forward under standing order 35. The matter of the separation of Quebec from Canada is long standing and not a sudden occurrence. Moreover, I remind the hon. member that during the recent throne speech debate, there was ample opportunity to debate the matter. This issue was as current then as it is now.
For the above reasons, I find that the matter raised does not meet the requirements of standing order 35, and I must rule accordingly.
CHIEF EXECUTIVE OFFICER OF B.C. HYDRO
G. Campbell: The official opposition has learned, as have many employees of B.C. Hydro, that the government has finally taken action and agreed to remove Mr. Eliesen from his post at B.C. Hydro. My question is to the Deputy Premier: can she confirm that Mr. Eliesen is on his way out of B.C. Hydro?
Hon. E. Cull: I'd be glad to take the question on notice for the minister responsible for B.C. Hydro.
The Speaker: The matter is taken on notice, hon. member.
A further question?
G. Campbell: A new question, hon. Speaker. The opposition has also learned that there was a major report of over 100 pages done at Hydro outlining how Mr. Eliesen could be dismissed with cause. Could the Deputy Premier let the House know whether or not they will be pursuing the recommendations of that report, which would require Mr. Eliesen to be dismissed with cause, or will they be using the taxpayers' dollars once again to pay off the government's mistakes?
Hon. E. Cull: I'm sure the opposition would like to ask many questions with respect to B.C. Hydro, and I'd be glad to take these questions on notice for the minister so that he may answer them in full when he's in the House.
The Speaker: Final question, hon. member.
G. Campbell: I think we all recognize that there are times when we make mistakes and we have to learn from them. I would like to ask the Deputy Premier: is the government willing to learn from the mistake with regard to B.C. Hydro? Mr. Eliesen's replacement should be carried out through an open, public process. I would like to know whether the government will be pursuing an open, public recruitment process to replace Mr. Eliesen so that for once we get what's best for B.C., not what's best for the NDP.
Hon. G. Clark: I am, of course, delighted to take that question on notice.
The Speaker: Order, please.
G. Farrell-Collins: And the public wonders why B.C. Hydro, among other Crown corporations, is in such a mess. That's exactly the reason.
The official opposition has also learned that Mr. Eliesen is not only on his way out, but the government has found a cushy position for him in a joint venture with some investors in China. Can the minister confirm that Mr. Eliesen is not only on his way out of British Columbia, but on his way out of the country to be working in China on behalf of the joint venture?
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Hon. G. Clark: No, hon. Speaker.
The Speaker: Supplementary, hon. member.
G. Farrell-Collins: Seeing that he's leaving B.C. Hydro, perhaps the minister can confirm what pension and severance arrangements have been made for Mr. Eliesen. Are the B.C. taxpayers, once again, going to be carrying the bill?
Hon. G. Clark: I believe I've taken that question on notice.
The Speaker: The question has been taken on notice.
Additional question, hon. member?
G. Farrell-Collins: I've got that one on notice, hon. Speaker, but I'll give him another one; maybe he can take that one on notice too. Can the minister explain why the government finds Mr. Eliesen a cushy position in the private sector when he gets fired, but when Mr. Dixon gets fired he's out on his own? Can the minister tell us why there's a double standard, one for friends of the government and one for enemies of the government?
RESIDENTIAL WELL WATER TAX PROPOSAL
J. Weisgerber: My question is to the Minister of Environment. The Premier promised that there would be no new taxes, but we've now learned that the government has plans in place to impose a tax on water drawn from residential water wells -- if you can believe it, Mr. Speaker. This fact has been confirmed by the water management branch. Can the minister tell us what in the world caused him to implement this lamebrained tax and why it wasn't in the budget?
Hon. M. Sihota: I know that members of the Reform Party were out and about asking all sorts of questions of staff the other day with regard to the water situation in the province and initiatives that the government is proposing under its water stewardship initiatives. As part of our practice of open government, there has been a whole series of discussions around the province with regard to water stewardship, which has been known to the public for quite some time. I know that members of his party were asking about this issue this morning, and I didn't have the opportunity to meet with them and correct their misinformation. I will do that in due course.
The Speaker: The hon. member's supplementary.
J. Weisgerber: In the Prince George Citizen, one Colin McKean, a program analyst with your ministry, says: "We're saying water is a resource, not a commodity." He says that those who argue they have paid drilling costs must remember they haven't paid for the water. No other government in Canada taxes residents for the use of residential water. Will the minister deny that the government plans to tax residential water in British Columbia?
Hon. M. Sihota: The hon. member knows full well that those are statements made by an official and are not government policy.
The Speaker: Final supplementary, hon. member.
J. Weisgerber: The government obviously has a death wish in rural British Columbia if it intends to bring in a tax on water in residential wells. Will the minister have the courage to stand up and either confirm or deny the statement made by his ministry staff, reported in Prince George yesterday? Are you or are you not bringing in a tax on residential water wells?
Hon. M. Sihota: I want to assure the hon. member that this government has no death wish at all. In fact, residents of rural British Columbia voted in overwhelming numbers for members of the New Democratic Party in the last election. This government has been recognized for the initiatives that it has taken on behalf of rural British Columbians -- initiatives like the forest renewal plan, which I notice the Liberal opposition has voted against, and initiatives in terms of job creation...
The Speaker: Order, hon. member.
Hon. M. Sihota: ...throughout the province...
The Speaker: Thank you, hon. minister.
Hon. M. Sihota: ...and we would not take steps that would unnecessarily hinder the government's standing in rural British Columbia.
LETTER FROM AGRICULTURE MINISTER REGARDING LAND PURCHASE
M. de Jong: Over the last few days we have heard a great deal about a letter that may or may not have been written by the Minister of Agriculture -- and off-road development -- to the Ministry of Transportation and Highways concerning a road at Opheim Lake. Here's a simple question for the Minister of Agriculture. Will he confirm whether or not he has written a letter to the Ministry of Transportation and Highways concerning the road at Opheim Lake?
Hon. D. Zirnhelt: As I said yesterday, I do not want to interfere with investigations that Mr. Hughes is undertaking. The Liberal Party is making allegations and he will have to consider all sides of the matter. I have determined that no such letter exists.
The Speaker: Supplemental, hon. member.
M. de Jong: The land baron from the Cariboo was a lot less reticent about discussing the matter with the Williams Lake Tribune. That's fine.
Let's go to the Minister of Transportation and Highways. Could the minister...
The Speaker: Order!
M. de Jong: ...tell the House what efforts her office and the district office in Williams Lake have made to ascertain whether or not the letter in question still exists?
Hon. J. Pement: I'd like to say that my ministry and the office in Williams Lake are working closely with the
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conflict-of-interest commissioner to ensure that the investigation is complete.
The Speaker: Final supplemental, hon. member.
M. de Jong: Today's edition of the Williams Lake Tribune sets out in stark detail the contrast that exists between what the Bradys are saying and what this minister's officials are saying. People in Williams Lake are beginning to allege a cover-up within the ministry. What action has the Minister of Transportation and Highways taken that will serve to assure British Columbians that in fact no cover-up is taking place within her ministry?
Hon. J. Pement: I just told the member that we are working in concert with the commissioner to ensure that the investigation is complete.
COLUMBIA POWER CORPORATION
G. Wilson: My question is to the Minister of Employment and Investment. The members of the Alliance noticed that we have a new Crown corporation in British Columbia, the Columbia Power Corporation, which this government has pumped $51.8 million into. Can the minister tell us why the development of the two dams involved was not provided for or developed by West Kootenay Power or B.C. Hydro?
Hon. G. Clark: I'm delighted to clear up some confusion that exists in the minds of at least some reporters on this question. The Columbia Power Corporation is essentially a shell company, which was created to hold the assets of future power generation that we need from the Brilliant dam as part of the Cominco transaction. It was part of the announcement on March 4. There's no secrecy; it's just suddenly come to some people's attention.
The purpose of the corporation -- to hold the assets rather than, say, B.C. Hydro -- is because.... Now that we have other options to sell the assets to other investors -- joint ventures, West Kootenay Power or B.C. Hydro may wish to buy those assets -- the government has purchased those assets and they can be sold to the highest bidder. Secondly, the transaction is transparent and businesslike, which insulates us from any possible concern about countervail. If we had asked B.C. Hydro to buy it, there may have been some suspicion that they weren't paying market value for it. Dominion Securities has done an analysis to show that it is a market transaction. Essentially, those are the two reasons. The corporation has no employees and no function other than to hold those assets and, through Powerex, to purchase power on the way through from Cominco to the United States.
G. Wilson: A supplementary question. The completion of new generating opportunities at those two facilities is going to cost roughly $500 million. Can the minister tell us what obligation, if any, the province has with respect to that production? If not, at what point will the minister confirm that the assets that have been purchased will be put up for sale?
Hon. G. Clark: These are good questions. Both the Waneta and Brilliant dams will require something in the magnitude of half a billion dollars to be invested, to take advantage of these rights which now are held by Columbia Power Corporation or the government. We have not decided yet how to dispose of those. We understand that West Kootenay Power is very interested in purchasing those rights and then making the subsequent investment. B.C. Hydro is interested in purchasing those rights and making the subsequent investment. Over the course of the next few months, we will be analyzing what would be the best approach to take. One approach may well be simply to put them up for auction and let anybody buy them. That only gives them the right to invest the $500 million or so that is required to take advantage of the rights to surplus power generation in those dams.
The Speaker: A final supplemental, hon. member.
G. Wilson: Will the minister provide a guarantee to this House and the people of British Columbia that this transaction, given that West Kootenay Power or B.C. Hydro buy into it, will not remove the obligation of those two power utilities to have a full hearing through the Utilities Commission and simply provide additional power into Powerex for the export potential of the province of B.C.?
Hon. G. Clark: I'm not sure about the latter point, but you're absolutely correct that.... Columbia Power Corporation is not a regulated utility, because it's not a generator of electricity. As soon as the right to create energy, or the surplus power asset held by Columbia Power is sold -- whether to West Kootenay Power, B.C. Hydro or some other agency -- then it becomes part of a regulated utility, and all the rules apply. All of the environmental concerns -- and there are some with respect to sturgeon -- will have to be fully canvassed before the Utilities Commission before the actual construction can take place.
TRIPP AUDIT OF FOREST PRACTICES
W. Hurd: My question is to the Minister of Forests. Can the minister explain why he neglected to advise the public that his own ministry, the Ministry of Forests, through the small business enterprise program, was one of the worst offenders in the Tripp audit of fish and wildlife and stream management on Vancouver Island?
Hon. A. Petter: The Tripp audit, which was initiated by this government as part of our toughening up of the enforcement of forest practices, certainly disclosed that there is much room for improvement. But the comprehensive report that was released by myself on Tripp indicated that the small business program ranked very near the top of the list in terms of its performance, according to the Tripp audit.
The Speaker: A supplemental, hon. member.
W. Hurd: I think the minister needs to read the Tripp audit, because it points out that his ministry ranked near the bottom when it came to site preparation and site access. In fact, the reports on file were significantly at variance with what they found in the field. Can the minister explain why he neglected to even mention in his press release that his own ministry had flunked a number of important tests in this audit?
Hon. A. Petter: I'm glad that the critic for the official opposition, having perused the documents for about three months, is finally getting into some of the detailed substance.
The full report was released at the time of the news conference. With respect to site preparation, it's true that the small business program needs to improve, and will improve,
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but it's also true that its overall performance ranked very near the top of the list. But no one, certainly not I, would deny that there is much room for improvement. That's why we have that audit process, and that's why we're proceeding with the Forest Practices Code. I look forward to the member's support when we come forward with that initiative in the very near future.
The Speaker: The bell signals the end of question period.
Hon. C. Gabelmann: At 8 o'clock this morning, B.C. joined the federal, Alberta and municipal governments in the lower mainland in the active phase of the Canatex 2 exercise. Canatex 2 will test the planned provincial and national response to a catastrophic earthquake in British Columbia. In the exercise scenario, an earthquake measuring 8.5 on the Richter scale occurred off the west coast yesterday afternoon. The earthquake had a devastating impact on the lower mainland, requiring full mobilization of provincial resources and the channelling of federal resources through Alberta.
The province's role in the exercise is defined in the B.C. earthquake response plan. Under that plan, as minister responsible for the provincial emergency program, I would be briefed as soon as possible on casualties and damage and response efforts. Given the imminent threat to lives, the province would likely declare a state of emergency. Over the course of response and recovery, cabinet would continue to be briefed. Major policy and expenditure decisions could be made by ministries with response functions under the response plan.
Canatex 2 will help the province determine how well the B.C. response plan works with the national earthquake response plan and the Alberta support plan. It's an important step in ensuring we can respond to a catastrophic emergency. It's possible that as a result both of Canatex 2 and of Emergency Preparedness Week, which began Sunday, members may get inquiries from their constituents. I therefore had a backgrounder on the exercise and copies of an emergency preparedness brochure, prepared by my ministry, sent to all MLA offices.
J. Dalton: Again I thank the Attorney General for giving us a copy in advance of his statement. As it happens, the member for Surrey-Cloverdale and I had occasion this morning to go up to the emergency program headquarters just off Douglas Street. We did have a firsthand opportunity to sit down with some of the officials who are coordinating this very important exercise.
There are probably many things of importance that we could cover with regard to this. No doubt we'll have that opportunity in the estimates, when and if they return. But there was one very telling question that I want to share with all members. It was asked this morning by a ministerial official -- from Health, I think; I'm not quite sure which one. That person asked the coordinator what planning is being done, particularly in the lower mainland, with regard to intermunicipal cooperation. I think that is probably the key to an exercise like this.
It is great, of course, that Victoria is leading the way in doing things like this and providing the opportunity so that we can all be thinking of them. But I would suggest -- and the latter part of the Attorney General's statement emphasizes this -- that when we in the lower mainland, who may be directly affected by this, get back to our constituencies and our municipalities, we should be sitting down with local officials to determine their game plan and see how they're coordinating that with the people next door to them or perhaps across an inlet or something of that nature. In fact, I will be doing that very thing myself on the weekend. Happily for me, I guess, one of my neighbours is Ross Peterson, the coordinator for the North Shore emergency program. I know Mr. Peterson very well, and I know the hard work that he and his volunteer staff -- plus the municipal officials, of course -- put into this.
I thank the Attorney General for his efforts and the efforts of this government. I do remind members that this is something we must take beyond Victoria; it is far more important than that.
Hon. G. Clark: I call Committee of Supply in Section A, Ministry of Aboriginal Affairs estimates. In the House, I call committee stage of Bill 19, Taxation Statutes Amendment Act, 1994.
TAXATION STATUTES AMENDMENT ACT, 1994
The House in committee on Bill 19; D. Lovick in the chair.
On section 8 (continued).
L. Fox: Just prior to the lunch break we were talking on section 8 and the impact of removal of a tax that was placed on jet fuel by this government two years ago. One of the concerns that I had at the time this tax was introduced was the additional costs it would create for the ambulance service of government air services in British Columbia. That service is particularly highly valued by rural British Columbians. Can the minister tell me what the impact of this tax, which she is now removing, has been over the course of the last two years on the air ambulance, and whether or not that contributed to the review of the air ambulance service and the subsequent move to privatization?
Hon. E. Cull: I wouldn't have that information; I wouldn't have the tax impact on any particular user of the jet fuel. That question would be better put to the Minister of Government Services during his estimates around government air services.
L. Fox: I understand that it would be specific to that particular minister, but given that this is an initiative of this minister to remove a tax that is currently in place, I'm surprised that she, the Finance minister, would not know its effect on the varying parts and industries that it was applied to. I would have assumed that during the course of discussion on the removal of the tax, impacts such as this would have been discussed.
Sections 8 to 14 inclusive approved.
On section 15.
F. Gingell: Actually, in no way would I vote against this section, but I wonder whether the minister might accept a friendly amendment by repealing this whole section altogether.
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Hon. E. Cull: I don't think that would fall under the category of friendly amendments. No, I'm not interested in repealing the section entirely.
F. Gingell: A great deal has been said in this House since 1993, when these provisions were brought in. I think it became fairly clear during the debate that in many parts of the province, the type of vehicle that is appropriate for people's safety -- vehicles that have winches, that are four-wheel drives, that are built for difficult terrain or that contain the right equipment in case they are ever in distress -- clearly cost these amounts of money. I can appreciate that you may wish to put on an additional tax; I don't think you're doing the right thing, but I can accept that you might want to put additional taxes on drivers of Rolls Royces or other luxury cars. But it seems to me that this is really far too tight, and it would really be wise if there were provisions that recognize that people who live in the more remote parts of the province do live by a different set of standards than the rest of us.
Hon. E. Cull: Before answering the specifics of this, with respect to this section and the next I want to say that the former Minister of Finance struck a task force with the industry last year. Prior to the budget this year, we spent considerable time working with the industry to confirm what was happening, because there was a lot of dispute about what was really going on in the industry. As we go through the sections, I will provide the members with some of this information.
With respect to luxury vehicle sales, which is the part of the act we are on, the sales continued to increase after the budget was brought in. In fact, they grew by 6 percent, which is more than for new vehicle sales for the year overall. While no one wanted to pay the tax, it was not a disincentive to those people who wanted expensive vehicles. We wanted to review it to make sure that we were not capturing the working vehicles that people in rural and northern areas often require in order to get around. I know that full well. I lived down a gravel road outside Prince George, and in the winter I required a fairly hefty truck to get in and out of that rural property. If you look at most of those vehicles and add on all of the options you would care to, you would find that they come in under the $32,000 that has been listed here. The ones that exceed that are ones that are going for fairly exceptional things that are added on -- complete stereo systems and the like -- or that fall beyond the categories that are captured here under the legislation. For vehicles that fall into that category, we think that those individuals can afford to pay a larger social service tax to help contribute to the services that are required throughout the province.
L. Fox: I think we might be talking on section 16 rather than section 15, but they do kind of flow together.
With respect to the statement the minister just made, I don't know when the last time was that the minister went out to buy a three-quarter-ton 4-by-4 diesel, added some minor accessories to it and found it to come under $32,000. I submit to her that it is virtually impossible to do. The three-quarter-ton 4-by-4 diesel is a piece of equipment used consistently in northern and rural British Columbia in the woods industry, mining exploration and so on, for a couple of different reasons. Their equipment runs on diesel in the bush, and having a diesel pickup eliminates the need for two types of fuels. Also, there are economies and efficiencies over the term of the use of that vehicle. So I'm not sure that the minister has done all the homework she needs to do with respect to the industrial uses of vehicles in northern British Columbia. Unless she were a fleet customer, she would find that she wouldn't be able to come under the price of $32,000.
She should well know this luxury tax affects vehicles that are three-quarter-ton or less, but if they decide to acquire a one-ton vehicle rather than a three-quarter-ton vehicle, even though the vehicle is not that significantly different, this luxury tax does not apply. So it does affect the average worker in northern B.C. who travels up to 150 kilometres a day to get to and from work. The vehicle is a necessity, not a luxury, as this tax seems to indicate. In terms of 16, I'll leave my comment until we get to that section.
Hon. E. Cull: This tax is designed to capture passenger vehicles and to provide exemptions to people who have passenger vehicles -- not industrial or commercial vehicles. So the kind of vehicles that you're talking about -- in fact, I think you used the words "industrial use" -- are not the ones. We're talking about the cars that individuals need for personal travel, not for business travel.
L. Fox: Perhaps, then, there's a need for clarification. The minister is telling me that this does not apply to F150 or half-ton or three-quarter-ton pickups that are used every day by individuals going to and from work. A three-quarter-ton pickup that is powered by a diesel engine and retails for $33,000 and more, without any accessories on it.... I'm under the impression that everything under a one-ton vehicle falls under this tax classification. If I am wrong there, the whole industry has been misinformed over the last year.
Hon. E. Cull: Let me just read this. It says that a passenger vehicle is a truck that is or is smaller than a three-quarter-ton truck, but does not include a truck that is larger than a three-quarter-ton truck.
L. Fox: Now that the minister has it straight in her mind that not just luxury vehicles but indeed pickup vehicles are being taxed, perhaps she should once again look at the impact of this taxation on the average working rural British Columbian, who is being taxed -- based on even the new schedule contained within this bill -- as though it were a luxury vehicle. That's the fault of this legislation. If we were talking about Cadillacs, Lincolns or Mercedes-Benzes -- the kinds of vehicles that indeed are luxuries -- I wouldn't have near the problem with this legislation as I do under its current guidelines, which include three-quarter-ton trucks or less. That is the type of vehicle that is used by every northern and rural British Columbian to get to and from their industrial jobs, where they have to pack their fuel with them because they travel up to 100 to 150 kilometres a day. It's those average working individuals that are being affected negatively by this legislation.
Section 15 approved.
On section 16.
F. Gingell: It's a little difficult to follow all of this, because the current statutes of British Columbia that are in the House do not contain the amendments that were made last session. It seems to me that there were some changes made to this section last year, because I can remember some concerns about them. So I have come to the assumption that this is correcting or clarifying the amendments that were made last year. Could the minister, first of all, confirm that?
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Hon. E. Cull: Not the amendments made last year. I'll just tell you what this section does do. It clarifies the definition of purchase price, and it clarifies it for purchases in the province. Charges for transportation, interest, finance, service, customs and excise only form part of the taxable purchase price if such charges are incurred before title to the tangible personal property passes to the purchaser. There's no substantive change to the definition, just a clarification. The amendment was made at the request of tax practitioners to remove the uncertainty that sellers face when they're required to charge and collect the tax. The existing definition is simply not clear, particularly when it comes to financing, service and delivery charges. This is on the recommendation of people who have to interpret the legislation and provide for legal collection.
F. Gingell: I appreciate that response. This does clarify an issue that was on my mind when the amendments were being made. It sets it up much more clearly.
From what has happened here, I take it that there is no intention to change anything to do with the issue of something that is sold installed, versus sold not installed and a separate contractor is hired to make the installation.
Hon. E. Cull: Maybe I could attempt to answer this by giving an example. An example might be the purchase of a stove that would be installed in a house. The purchase of the stove in this case would be taxable, but the installation into real property would not be taxable. This is a way of clarifying those kinds of distinctions, when people don't know what is part of the overall purchase price and therefore what is subject to the tax.
F. Gingell: That's a good example of one type of transaction. My understanding of the act is that if the Hudson's Bay Co., or whoever you were buying it from, sold it to you on an installed price, and an electrician came and actually hooked up the stove and pushed it back into position, if the purchase price of the stove included that service, then that would be subject to tax. But if you were to buy the stove separate from that service and hire your own electrician, you'd be buying something that is freestanding. I'm sure that by reading her mail the minister appreciates that this question of the installed price and the non-installed price is a problem for taxpayers. It's not a problem for your revenue officials, who have a very firm and concrete attitude about these issues.
Over the two and a half years or so that I've been an MLA, I have had three or four cases where, particularly in the agriculture industry -- which creates some other uncertainties because of the exemptions of farmers from the social services tax -- small contractors tend to build.... One of the examples was pouring a concrete trough in which greenhouse plants would be grown. Because the trough was installed by one contractor, I believe the tax was applicable. Had they bought the trough from one supply company.... Even if that supply company had set up its own sister company for the purpose of installation, the transaction would have been tax-exempt.
We clearly cannot have one set of rules for one person and a different set of rules for somebody else. But it does seem to me that a lot of these problems could be dealt with if the department of social services tax administration had a better communications role, which would be by searching your proved registered vendors, by seeing those to which some of these situations could apply and by ensuring that they are aware of the rules. The conclusion I came to was that the sophisticated business person was able to do things in the right fashion, and the very small business person who can't afford to hire lawyers and accountants but gets by in a very small, businesslike way is put at a disadvantage.
I'm sure the department must have established a series of precedents that will clearly apply to many other businesses. All you need is a little one-page communication that goes into their monthly sales tax once every two or three years or whenever some new issue comes up. Small businesses really do feel hurt when they've been doing something in a particular manner, and your assessors go back, sometimes for five or six years, and assess these matters with interest and penalties. I was wondering if you could respond to that.
Hon. E. Cull: I think the member will be pleased to hear that procedures are currently in place which do much of what he has just requested. Also be aware that one of the things we looked at in this budget cycle was addressing many of the small administrative problems that small businesses face. A lot of the changes that we've made with respect to remittance, appeal periods, commissions and that type of thing have been done to try to help small businesses and to respond to the concerns they raised with me.
We have over 100 bulletins dealing with the application of taxes, which do get complicated, particularly when you get into exemptions. We send out an index annually, which goes to over 90,000 registered vendors. So they are aware of the information they can obtain. We have 15 offices throughout B.C.
On a personal note, I had a constituent call me as an MLA with respect to a tax problem. I put her in touch with somebody in the branch, and it was resolved within the week -- with good suggestions from my staff about how she could handle her tax remittance in an easier way. This is the type of thing that my staff, throughout these offices and throughout the province, do on a regular basis: try to assist the tax collectors to find solutions that are still within the law but flexible, allowing them to do a better job. That doesn't mean that there aren't many more things that we can do, and I'm committed to continuing to do that.
One of the things that the Minister of Small Business is conducting right now, through his discussion paper on small business, is a look at the impact of tax regulation on small businesses. As we come to the conclusion of that review, we will be making other changes that are possible -- immediately, the ones that we can do through practice or regulation. If necessary, we will be preparing further legislative amendments. The idea is to simplify the tax collection process as much as possible. On the other hand, that has to be balanced with the incredible demand for all kinds of complexities into the system as people want exemptions for specific situations.
The case of the concrete troughs is exactly one of those problems. An exemption is provided to farmers that is not provided to other individuals, and sometimes the tax ends up being paid. Under the act, the contractor is deemed the consumer of the service, not the farmer, because of the way this particular business transaction takes place. I don't know if that can be dealt with by further review of the complexities of the legislation. If it can, it's something I am committed to doing.
F. Gingell: I have some files which I should maybe send over to your staff, because I have had a terrible lack of success. In fact, I have a property transfer tax issue up at 70 Mile House that we have discussed. Perhaps I could hand
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that to your staff, and we'll see if the gentleman on your left can do a better job.
F. Gingell: No, that was Alan.
In dealing with section 16(b), the words "at a retail sale" have been taken out of the definition of "use." When I read the act and see what that does, I'm not exactly sure of the consequences and whether one is defining differences among retail, wholesale and dealer sales, or something like that. I wonder if the minister could explain this issue for me.
Hon. E. Cull: I'd be happy to. This change in definition changes the definition of the word "use" to clarify that the purchase of goods for resale by both retailers and wholesalers is exempt from social services tax, according to that section. The existing provision explicitly excludes purchases of goods for retail sales from the definition of "use," but it's silent with respect to wholesale sales. The amendment simply removes the uncertainty of the application of the tax to goods that are purchased for wholesale sales. So it's a technicality, a confusing issue in the current legislation that is being corrected.
L. Fox: I just want to clarify section 16(a) where the definition of "purchase price" is being repealed by paragraph (a)(i). Does this have any relationship to section 15 to help clarify when the options added to a vehicle become part of the taxable sale of the vehicle?
Hon. E. Cull: Yes, there is a relationship here. If an option on an automobile is installed prior to the purchase or purchased at the same time as the automobile, then it becomes part of the entire purchase price and is taxable at the amount that would apply to the automobile as a whole. If, however, a stereo system is installed two days later, then it is not subject to that tax, and it would be subject to the regular social services sales tax.
L. Fox: Thank you. I appreciate that clarification. It was my understanding during the debate when this tax was put in place a year ago that in the original legislation, any additional option, up to 30 days after the sale, was considered to be part of the sale if it was sold by the same seller. If it was sold by a second seller, that wasn't the case. However, I am pleased to note the clarification.
This leads me to one other question. Given that we are now in a transition and there could be a considerable amount spent on labour.... The new social services tax on labour is 7 percent. You could spend up to ten hours changing equipment from one vehicle to another under the transaction of that sale. Previously that was allowed to be billed separately or included as part of the agreement. Now it would be subject to the 7 percent. As I understand this, if the collective amount brings it up to $34,000, then it could be subject to the 10 percent because it was part of that transaction. Would the minister like to clarify that for me?
Hon. E. Cull: We're getting into a very technical aspect here for me. If we're going to get much deeper into this, I might suggest that we do it through a technical briefing. Let me attempt to try to clarify it for the member. If the services he's talking about form part of the purchase price before the property changes title and moves to the new owner, then that would be considered part of the purchase price and subject to the appropriate tax. If that is not the situation, then it wouldn't be subject to the tax; it would only be subject to whatever labour taxes might apply on that sale. You would really have to start breaking these all down to determine exactly what would apply. That's why I say that it's starting to get rather complex and technical.
L. Fox: I'm not trying to be difficult or complex. I want to know if it is the minister's intention that the additional cost for labour -- or service only -- is part of the acquisition cost.
Hon. E. Cull: If something is installed on a vehicle prior to the sale of the vehicle and there's a labour element that has a tax component to it, then that becomes part of the purchase price.
L. Fox: Just one final follow-up on that. Perhaps it will be easiest if I lay out a scenario. If I own a vehicle that has radio equipment in it that I have already paid for, and during the sale I make an arrangement with the dealership to take the equipment out of my old vehicle and install it in my new one, there's a labour charge for that. Is that considered part of the sale?
Hon. E. Cull: No. I'm sorry, I guess I was only thinking of things being installed in the vehicle, as opposed to the example you have just given where something is actually removed. In that case it would not be part of the purchase price. I should also clarify here that this part of the act is confirming existing practice. There is no change to the way the act will actually be imposed. It confirms existing administrative practice and provides some clarity and certainty to that.
Section 16 approved.
On section 17.
F. Gingell: We have now come to the section that repeals the cancellation of the trade-in allowance for automobiles. I'm glad about one thing: the amendments to the act that got rid of the trade-in allowance credit for sales tax purposes never got into these sets of statues that are in the House here. So please don't go and print up last year's changes, because this year you will be taking them out again. I just want to save you some....
F. Gingell: You'll have to do it whatever happens.
Let the record show that the previous Minister of Finance did one of the stupidest things possible, and one year later this Minister of Finance is given the job of going around and cleaning up the mess that was left behind. If only this government would take a proper look and do a thoughtful evaluation of all changes to tax legislation before they make them, instead of putting them in one week and taking them out the next, as they did in the property super-tax issue, or putting them in one year and taking them out the following year, as they have had to do with this. I really just wanted to use this opportunity to speak to this issue. I will give my wholehearted support and the support of all members of the official opposition to the passage of section 17.
Hon. E. Cull: I just might take the opportunity to put some figures on the record from the joint industry-government task force. Prior to the budget, the vehicle trade-ins to dealers were down by 0.7 percent; over
[ Page 10488 ]
the 1993-94 year, they were down 0.3 percent in British Columbia. That compared to an increase in Canada of 1.6 percent, which should make the member say "Aha," except that when you look at the figures for all the provinces, they're all over the map. Try as we liked.... We looked at a whole pile of things to figure out the predictor of Manitoba dropping even more than British Columbia, or Quebec dropping even more again. Manitoba was down 1.9 percent and Quebec was down 2.4 percent. It was very difficult to find anything that was actually a predictor in that case.
The thing that was compelling in terms of the task force, though, was the impact on used vehicle sales by dealers versus private sales. We were able to establish that yes, there was a transfer of sales from dealers to private sales. Depending on your point of view, you could see that as a positive or a negative thing, but private sales clearly went up after the budget.
There wasn't any revenue impact. The suggestion some made -- that there was a loss of legitimate sales tax as a result of moving from the dealer sales to private sales -- simply wasn't borne out, either in the tax revenue figures we have for the year or in a spot study we did. We actually went back through private sales, went back to the seller, confirmed the price and looked at the sales tax paid. It shows, and I was pleased to see, that British Columbians are a remarkably honest group when it comes to purchasing automobiles and paying their fair share of the tax. All of that was useful information gleaned as a result of the joint industry-government task force.
I think perhaps the most useful thing about this, and why it makes a useful model for future work, is that both parties came to the task force with information that wasn't entirely correct. At the end of the day, while I can't say that we agreed 100 percent on all the facts we use to make decisions, we certainly were a lot closer. Both sides learned a lot by sharing the information.
L. Fox: I'm pleased to see that this section of the act has been brought forward and that the minister has been prepared to make the necessary changes. She has recognized that in used vehicle sales there was a transfer from the car lots to private sales. I think one thing we should recognize is that that not only affects the provincial government, but individuals selling their private vehicles do not have to pay GST, so it also has to have significant federal tax implications.
But there's another issue here that the minister may or may not be aware of. When there was a shortage of trade-ins, by and large it drove up the used vehicle prices at the licensed dealers. So the consumer ended up being hurt two ways: (1) by losing the tax credit, and (2) by having to pay more for that used vehicle through a licensed dealer. That's purely based on supply and demand, because there was not a good supply of used vehicles, and when that happens the demand is increased. Whether we like to recognize it or not, for many reasons a lot of people want to buy a vehicle from a licensed dealer versus through a private sale -- because they're not sure about whether there are any liens on the vehicle or about the safety features and all those other issues.
I'm pleased to see this come forward. I feel somewhat sorry, though, for those individuals who did trade their vehicles over the course of the last year and in that process had 7 percent of the value taken away by the legislation created by this government a year ago. Many individuals had to trade their vehicles in because they needed the equity to finance their new vehicles, and in that process this government took 7 percent of the price of their used vehicles out of their pockets. It's very unfortunate that the Minister of Finance of the day wouldn't hear the concern that was out there among the auto dealers and consumers around the province and being generated in this Legislature, and have a second look at that before implementing it and costing those who had to exchange their vehicles last year an additional 7 percent in the process.
Sections 17 and 18 approved.
On section 19.
F. Gingell: I'm interested in why the minister sees a need for this new section. It makes common sense, but I wonder if there has been a problem. I also wonder -- perhaps the minister could answer at the same time -- if there is any arrangement between those municipalities that would give licences and permits for people to do things giving rise to a taxable sale, to make sure that they don't permit or license someone who is not a registered vendor.
Hon. E. Cull: Yes, this section provides some consumer protection. Most of us, I assume, have had or may have the experience of selling our own car at some point. But there are individuals who make a business of acquiring and selling cars, not through a licensed retailer. What we want to do is ensure that those individuals who want to register under the Social Service Tax Act are also registered under the Motor Dealer Act, to provide protection to consumers who may be buying from the curbers, as they're known.
F. Gingell: I'm glad you described it, because I didn't realize that. What this specifically does, then, is look after circumstances where title moves from the original owner to a private car sales curber and then to a second owner. If title moves immediately from the vendor to the buyer, with the middleman being paid a commission rather than a markup, the sales tax is paid at the time you go to register the automobile, isn't it? Wouldn't that normally be the best way of handling it, or did you have a problem that the curbers had to pay tax when they acquired the vehicle from the vendor?
Hon. E. Cull: These individuals who want to sell cars in this fashion want to be registered under the Social Services Tax Act so that they can buy cars from auction tax-exempt. What we want to do is to also make sure, if they're taking that advantage of coming under the Social Service Tax Act, that they are registered under the Motor Dealer Act. Again, this was part of the results that came out of the government-industry task force.
Section 19 approved.
On section 20.
F. Gingell: Section 20 opens up section 4 in the act, a subject of great interest to all of us. I was wondering about two issues, which would be amendments to section 4(1).
First, I was wondering if the minister has considered making any changes under the exemption in section 4(1)(p), the one that deals with used clothing and footwear. You are aware, I'm sure, that there have been some problems in the Fraser Valley to do with charitable organizations that are running thrift stores. The majority of those goods, in the normal course of events, would qualify for exemption under 4(1)(p). As life goes on, the price of clothing goes up. Perhaps
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it is time that the minister considered an amendment to 4(1)(p).
The second section that comes to mind is 4(1)(z.9), which is the one that allows the Lieutenant-Governor-in-Council to exempt anything that they so wish: "...tangible personal property that the Lieutenant Governor in Council may prescribe as exempted from taxation imposed by section 2, 2.1 or 2.2." I was wondering if the minister would agree to send me a list of any and all tangible personal property that has been exempted under (z.9), because it obviously didn't come under something else.
Hon. E. Cull: With respect to the second part of the question, the Social Service Tax Act and regulations, which we have consolidated, are up to date. That would contain the full list and regulations that you are requesting of things that have been exempted under (z.9).
The other question was about used clothing. We have reviewed that and decided not to make any changes this year.
F. Gingell: The minister said they have reviewed section 4(1)(p) and decided not to make any changes -- so that's not to the dollar limits. I'm sure the minister appreciates that certain correspondence has gone by over the years, long before this government came into administration, that indicated it was the policy of the government not to require charitable thrift stores -- the majority of which are either the Salvation Army, Catholic organizations or, as in my community, hospital auxiliaries -- to collect tax. I'd just like confirmation, if I can get it, minister, that there is no change in that policy, either.
Hon. E. Cull: With respect to the charities, we have to sort out exactly what's going on there. They are not required to pay tax, but they are required to collect tax on taxable sales. In this particular item we're talking about, the regulations of 4(1)(p), these are items that are exempt from tax. However, often charitable organizations are selling items that are taxable. It would be very difficult to distinguish between the Salvation Army store downtown selling used furniture and the store up the street that is not part of a charitable organization that is selling entirely the same merchandise. That issue has come up in the past and has been dealt with by the former government on a number of occasions.
I have asked my staff to have another look at charities as a result of this issue. One of the things we also have to be cognizant of is that some of these organizations, which are raising money for very good purposes, are also businesses in direct competition with other legitimate businesses selling used merchandise. You don't want to correct one seeming inequity and thereby create another one which might be just as bad in the other direction. We're taking a close look at it.
Sections 20 to 33 inclusive approved.
Hon. E. Cull: I move that the committee rise and report the bill complete without amendment.
The House resumed; D. Lovick in the chair.
Bill 19, Taxation Statutes Amendment Act, 1994, reported completed without amendment, read a third time and passed.
Hon. E. Cull: I call committee stage on Bill 17.
PROPERTY TRANSFER TAX AMENDMENT ACT, 1994
The House in committee on Bill 17; W. Hartley in the chair.
On section 1.
F. Gingell: Section 1 deals with the issue of leases and the adding together, I believe, of a series of lease agreements that are then considered to be a purchase of property for the purposes of this act. Perhaps the minister would be good enough to give us a little background on the need for these sections.
Hon. E. Cull: This is designed to close a loophole that some companies were using to avoid paying the tax. They would register consecutive alternating leases to the same property at the same time. For example, Company A would register a lease for 20 years, then Company B would register a lease for another 20 years, then back to Company A for 20 years and so on, to try to avoid the whole question of what is a lease and what is a transfer of the property. Because each of the leases were for less than 30 years, they were exempt. We used 30 years as the cutoff point to distinguish between a shorter-term lease and a longer-term lease. This amendment will close that loophole by making leases that are registered against the same land within a six-month period taxable if the sum of the leases exceeds 30 years.
Sections 1 and 2 approved.
On section 3.
F. Gingell: This is the section that gives us the cutoff date for all the people who previously had the advantage of a tax rebate or reduction if they qualified -- because they were not going to expensive homes, they didn't have a lot of money and they were subject to high-ratio financing. But the minister, in her wisdom, has now decided to drag them into the tax net. I would say that it is a new tax. It's certainly an additional tax, because it's taxing a group of people who were previously not subject to the tax. That is the sole reason that we opposed this bill in second reading.
There are certain changes to the limits that apply to first-time buyers. They have been pulled up from $150,000 to $200,000 and $200,000 to $250,000. I would presume that the way this has been done, by the amendments to the definition of qualifying value, doesn't in any way allow transactions between March 22, the date of your budget, and July 1, the final cutoff date, to be subject to the high-ratio credit rebate under the higher limits. Or have the limits been held down to the original amounts?
Hon. E. Cull: That's correct. The intent of this section, which eliminates the high-ratio-financing tax relief program, is to ensure that individuals who had been in the process of buying a house, assuming they would get relief under that program, have until the end of June to wind up their purchase. But it doesn't provide them with the enhanced benefit of the new increase, the same as it wouldn't drop the
[ Page 10490 ]
high-ratio financing from 75 percent to 70 percent, which is also an added improvement to the new program. It's simply intended to wind up this program and redistribute the benefits that were there. The existing high-ratio tax relief program costs the province about $15 million. We estimate that the new first-time homebuyer program will cost us $35 million. The applications that we have to date under this program indicate that it looks like we're on target.
I see the member shaking his head, so maybe I'll give this information now rather than waiting. I'm sure this question will come up. In March 1993, the total number of beneficiaries under the old program was 541. In the first week of the new program -- so that was the last week in March, after the budget came in -- 494 people had applied. It was almost the same number of people in one-quarter of the time. If you look at total beneficiaries in April '93 under the old program, it was 443. The number of first-time buyer exemptions in the first two weeks of April was 475. We've had more exemptions in two weeks than we had in the whole month of April '93. It is clearly benefiting more individuals, because two improvements have been made to the program: to increase the value of the home that can be purchased under the program; and to reduce the financing requirement from 75 percent, the point at which the relief cut out, to 70 percent. It has now been dropped another 5 percent to 70 percent. So there is additional room there for people to benefit.
The other reason that the cost is greater -- besides the larger number of people who will benefit from the program -- is that the tax relief is total. You get 100 percent tax relief if you qualify for the program, whereas the other program had a sliding scale. Clearly this does benefit different people than the old program, although there will be a considerable amount of overlap, because most first-time buyers are involved in buying modest homes, usually with considerable high-ratio financing. But this will redistribute the benefits that are available to the group that the government believes is in greatest need of assistance in getting into housing: the first-time family.
F. Gingell: Is it possible to make a fair comparison? A fair comparison requires you to use only the old qualifying values of $150,000 and $200,000 for both periods or the new qualifying values of $200,000 and $250,000 -- which would be more difficult -- to compare what has actually happened in this early period in 1994 against what would have happened if those values and the financing had been the same.
We all have problems. I know that the gentleman on your left, who is a chartered accountant, will strongly and truly believe in the concept that we must be consistent. We must be consistent to be fair. It is absolutely unfair, I believe, for us to make comparisons where the rules have changed. So to make a comparison, we bring last year's qualifying values and financing amount to this year's applications and do a quick check to see what the results would have been, because we must only make comparisons on a comparable basis.
Hon. E. Cull: When we have had a bit more time to gather statistics on this, we will be able to make a comparison of the two programs, and I'll make that available to the member. But there's more at work here than simply comparing one program to another. There is a desire on the part of the government to provide tax relief to first-time homebuyers, young families who are struggling to get into their first home and get their foot in the market. Doing that without making any other changes to the existing arrangements would cost $35 million. So if you just set the high-ratio program aside and ask what it would cost us to implement the new program, it's going to cost us more money than we're spending right now. The judgment that had to be made on the part of the government, on the part of the Minister of Finance, was whether that money could be better spent and better targeted at those first-time buyers.
If we were not dealing with any other financial constraints in this province, then perhaps we could eliminate the tax; perhaps we could add on program after program to benefit people who are worthy of receiving benefit. But that's not the circumstance we're in now. The hon. member's party is constantly calling for cuts to spending, cuts to the deficit and cuts to our debt. That can't be accomplished at the same time that we are adding on programs that will cost the government more money.
Government is all a question of priorities, and in reviewing this particular situation and the needs of young families trying to get into their homes, we believe that this money is better spent and better targeted at those young families. That is a matter of political priority and political judgment, and it's obviously an issue that distinguishes this government from the opposition, which would not necessarily make those priority decisions.
F. Gingell: I would just like to say one last thing on that issue. We do support the elimination of the tax for the first-time homebuyer; we always have. We have called for it. We were disappointed that you decided to finance it through taxing these others.
One last question from me. You've mentioned the sum of $35 million. Last year the program cost you a fraction under $13 million. Do you anticipate that the total cost will be $35 million more -- i.e., $48 million -- or that it will be a total of $35 million -- i.e., $22 million more?
Hon. E. Cull: The cost of the new program is $35 million; the old program was about $15 million; so the net cost of the new program is $20 million. The number has to be subtracted from the new program.
M. de Jong: I will echo what my colleague said earlier insofar as we would be supporting this bill wholeheartedly except for the inclusion of section 3, which deals with the elimination of the high-ratio tax relief program.
As I look at the minister's figures, this is one of the difficulties I have. It seems to me that the figures are being presented in a way that suggests the following: a first-time homebuyer purchasing a home for $150,000 would ostensibly be required to pay $1,500; this program is therefore saving that person $1,500, and the savings are being calculated on that basis. The minister will know that there's a bit of a fallacy there. The vast majority of first-time homebuyers qualified under the old system anyway, and they weren't paying $1,500 in property purchase tax; they were probably only paying in the neighbourhood of $250 on that $150,000 home purchase. So to suggest that the new exemption is going to result in that case in savings of $1,500 just isn't the case. There were savings available to those people in any event.
The minister is correct insofar as she states that governing is a matter of setting priorities. The question I have for her is: does she recognize and is she prepared to accept that as a result of the changes this legislation will enact, from the time that a couple buys their first house or townhouse -- they get into the housing market, and I recognize that the government has established that as a priority -- and moves
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through the ordinary cycle of home-ownership till they require a home that can accommodate several children, for example, they will pay vastly more property purchase tax as a result of this amendment than they would under the old framework?
Hon. E. Cull: Theoretically that is true if, in the case of moving through several houses, a family must resort to high-ratio financing each time. More commonly, though, once individuals have purchased a house, they develop some equity in the house, not only through making their mortgage payments but usually through the increase in the value of the property. That allows them, if they're upgrading to a larger house, to take out a smaller mortgage than they would have the first time. That generally happens over a the lifetime of a family moving through housing. If the member is asking if I acknowledge that there may be circumstances where that is not the case, yes, that's true.
One has to ask, though, whether in the case of limited resources -- and that's what we're facing here in this province.... There are competing demands, and not only on the tax expenditures that we've made, because this $20 million net is an expenditure that has to be put beside all of the other expenditures of government and evaluated. But in making decisions about that $20 million tax expenditure, are we better to target that money to those people who have not yet even been able to get into the housing market, as opposed to helping people move their way up the ladder through the housing market? I'm not denying that that family looking for the extra bedroom or for a little more elbow room doesn't have a housing need that may require support. But since we can't provide support to all families who have a call on the public's finances, we have to look at the money that we can afford to spend and target it more directly to those families who are in the greatest need.
That is also the case with respect to your earlier comments about how many of the people who will qualify under the first-time buyers program would have also qualified under the high-ratio program. Obviously, if you were a first-time buyer and high-ratio, you would have qualified under the old program. But the facts to date -- and the statistics don't have a long life, because the program has only been in effect since March 23 -- show that the average benefit is $1,490 right now under the new program versus $790 under the old program. So there certainly are more people who are receiving a larger benefit, not only because of the increase in the house purchase price and the reduction in the financing but also because of the fact that the program is a complete exemption of the tax.
F. Gingell: The minister has a soft voice. Did you say the average benefit under the old program was $790 or $1,790?
Hon. E. Cull: The old program was $790; the new one is $1,490. I may be a dollar or two off there, as I'm recalling this from memory, but I think it's somewhere in that vicinity.
F. Gingell: There's just one final comment that I'd like to make. As one looks at all of the issues to do with housing markets around the world, although the west coast of Canada has enjoyed some excellent times, and house values have taken little blips, I remember well the early 1980s, when mortgage rates got up so high. People whom I knew -- particularly the CEO of our community college, whom we'd brought out from Toronto when I was chairman of the college board -- got themselves in a disaster because of the inability to sell their homes in Toronto. I recognize that housing markets do go up and do come down. It always happens; there isn't any secret rule.
The point that I wanted to mention is that particularly in Europe in the early 1990s, there were a tremendous number of houses that were repossessed by mortgage companies -- in Britain they're normally called building societies. What happened there was that real estate values dropped, and mortgage interest rates went up. There they don't have any long-term rates, and people were all of a sudden in a position where they could not only not afford their monthly payment but they didn't have any equity left in their house. Under your previous program with the high-ratio-financing rebate, if we had that set of circumstances happen here, these people would have been eligible to get back into the market later on, whereas now -- the way Bill 17 will amend the property transfer tax -- that won't be available to them. That's just a point I'd like to make. Markets don't always stay up; they fluctuate. And people here, just as they were in Europe, could be wiped out quite easily and not have assistance from this act to get back in.
M. de Jong: I have one further comment as well. I just want to point out to the minister, and this is based as much on personal experience as on anything else.... In my office, where I do conveyancing work, I have not had occasion to have prospective homebuyers tell me -- where they are obliged to pay $250 or $300 as first-time homebuyers under the existing framework, relying upon high-ratio financing and the tax relief exemption that existed -- that that represents an impediment to their completing the deal. On the other hand, I have certainly been faced with situations where purchasers faced with a $2000 or $2500 property purchase tax bill -- young families where relief isn't available -- have said that it is prohibitive, and the deal will not complete on that basis. They are precluded from moving up, in many cases, to satisfy the legitimate needs of their family.
The minister has fairly pointed out that she is attempting to establish priorities. But if she is saying that she is prepared to run that risk or assume that risk on behalf of the many families in the province for whom the elimination of the high-ratio exemption program will have an impact, then so be it. Obviously we have taken some pains to point out to her our concern that that will have a very negative impact on those struggling families.
Hon. E. Cull: As I reflect back on the three homes I've owned, I would have qualified for high-ratio-financing tax relief for all of the purchases had the tax been in place. I don't think that would be the best use of public funds given the income of my family. Except perhaps with the first house that was purchased, I don't think that families in the circumstances of my own personal situation are the priority for public dollars for tax relief to encourage people to get into housing.
So I think -- as long as we want to go through personal examples, and you want to go through the cases that come through your office -- we will always find individuals who will not qualify for one reason or another and who would be benefited by the other program. But it goes both ways. I think that, at the end of the day, by providing tax cuts this year -- $112 million of tax cuts overall -- the government is trying to target those tax expenditures as strategically as possible to provide the greatest benefit to those in the greatest need. With all due respect, I think a number of families and individuals have benefited under the existing
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program who would not be seen as at the highest need in the overall scheme of things.
Section 3 approved.
On section 4.
Hon. E. Cull: I move the amendment standing under my name on the order paper.
[Section 4, in the proposed section 3.24(2)(a) by deleting "45 days" and substituting "92 days."]
The opposition critic is scrambling to understand exactly what it is. This is the issue: the requirement about how long you have before you actually move into the new home to qualify. We are extending it from 45 to 92 days. I believe the old program -- and I'm sure my staff person here will correct me if I'm wrong -- was 45 days, and this was simply carried forward in the draft of the legislation. It was picked up afterwards as too tight a period of time, particularly with respect to the Residential Tenancy Act. We believe that 92 days covers almost all circumstances.
On section 4 as amended.
F. Gingell: So we're now dealing with section 4 as amended?
The Chair: Yes, member.
F. Gingell: What we need is one of those butcher shop things where it says we're now serving customer number such and such.
In the course of considering the various amendments being made at this time, I wonder whether the minister considered the issue of a notch provision for the maximum number; i.e., if the house cost $251,000, the tax will be so and so, and it would gradually phase out. At the moment, if the house is $250,000, you get a tax relief of $3,000, and if it's $250,050, you don't get anything. In many acts, such as the corporate capital tax act that we'll be dealing with later on, there are these notch provisions that carry us up.
[D. Lovick in the chair.]
Hon. E. Cull: We did look at that possibility. In fact, there are a variety of ways that you might want to provide some kind of a sliding scale or, as you called it, a notch provision such as the price of the house, the degree of financing and the size of the property, because if a property is over half a hectare, different rules apply to it. We looked at all of those, and on the one hand, we tried to balance off the fact that sooner or later you have to draw a line. When you draw that line, there will always be someone on the other side who will be disappointed that they didn't qualify for want of a few percentage points, a few dollars or a few acres.
The other very real consideration, which we discussed in our last bill, is the need to provide some simplicity in a fairly complex system. At the end of it all, we decided that since we had to draw a line somewhere, it would be administratively easier to do and therefore clearer to the person who is purchasing the house -- as well as to those who have to collect the tax -- to do it in the way that we have. But we did give it some very serious thought before rejecting it.
The Chair: I understand that the member for Cariboo North rises to make an introduction. Shall leave be granted?
F. Garden: We're privileged this afternoon to have approximately 20 members of McLeese Lake Elementary school from Cariboo North visiting us today. McLeese Lake happens to be one of the most beautiful spots in the Cariboo, and I urge you all to visit there some time and see why these people wouldn't want to leave. Accompanying the kids -- whom I just took on a tour and who were exceptionally well behaved -- are Mr. Wayne Rodier, their teacher, Mr. Tom Walker, Jeana Graham, Sherri Ekshaw, Marie Paxton, Tracy Paxton, and last but by no means least, the bus driver, Emile "Poncho" Forseille. Will you please join me in making them welcome in the House today.
F. Gingell: I was wondering if the minister would be good enough at this point, because this is the area where it comes into play, to just set out for the committee the circumstances that deal with joint tenancy or tenants in common: whether tenants in common or joint tenants are treated differently, and in the case of joint tenancy, if one purchaser qualifies and the other purchaser doesn't, exactly how all of those matters are handled.
Hon. E. Cull: I'm just getting a little briefing on exactly how this section works. In the case of tenants in common, the purchasers could decide how much of the interest they're purchasing. Each purchaser would be qualified for the program individually and therefore get the tax break they were eligible for based on their interest and qualifications.
In the case of joint tenancy, where it's considered to be fifty-fifty, the rules would apply. Of course, there's less flexibility there to apportion the tax, so each would qualify individually, but it would be based on their 50 percent interest in the property.
F. Gingell: In recognizing that tenants in common are a different species from joint tenants in that they each own a specific and separate but inseparable part, are there any provisions in here that deal with the issue? Maybe, as an example, there is a home worth $400,000 that they're going to buy. The tenants in common arrangement is that party A, who qualifies as a first-time buyer, owns 60 percent of the residence, and the non-qualifier owns 40 percent. Would the exemption then be available to the qualified buyer, or would the fact that the total building costs $400,000 bar it? If they were joint tenants, I could see that, you know. But I wonder whether the circumstance is a little different for tenants in common.
Hon. E. Cull: The member has just struck on something that causes me to sign dozens of letters every week on tax appeals or questions around this issue. The value of the property is the value of the property, not the value that you purchase. So if two individuals are purchasing this $400,000 home, and they try to split it into two to say that they're only buying a $200,000 property because that's the way they've registered the interest and title, it doesn't change the property value for the calculation of the tax regardless of this program, and it also doesn't change the application of this particular program. You can't rearrange ownership to improve your ability to qualify under the guidelines in the program or to restructure your tax to avoid paying the higher percentage of tax after it goes over $200,000.
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F. Gingell: Would they be able to do that if they were to strata-title the building by dividing the single title into two separate stratas?
Hon. E. Cull: I think the member just answered his own question. I heard him say across the floor that it would cost them more for the strata title than they would save in terms of the tax. That's probably very true. If a property can be legally divided into two parcels, the strata titles act would, of course, apply, and then two people could buy their portion of it. It would be very difficult to legally divide a single-family home into two parcels.
Section 4 as amended approved.
Sections 5 and 6 approved.
The Chair: I'm sorry, we're apparently proceeding too precipitately.
M. de Jong: I think I've missed the boat. I did have a question about the lien provisions, and it appears that that is included in section 4.
The Chair: I think, with the minister's indulgence, we'll pick that up.
M. de Jong: If I understand it correctly, the amendments to the act that this legislation embodies contemplate the possibility of a lien being registered against the property as a security instrument for the benefits of the tax exemption. I have a couple of questions for the minister. I don't believe that the existing legislation contemplates the provision for a lien. Secondly, this act suggests that a lien may be registered. Is it the minister's understanding that once the property purchase tax return has been filed with the first-time homebuyer's exemption claimed, a lien would automatically follow? Or is that a discretionary call? If so, what factors would be taken into account before the lien was registered?
Hon. E. Cull: We will be registering a lien -- it's automatic. In signing the return for the tax relief, one of the things the purchaser does is give permission for the lien to be registered.
M. de Jong: I think the minister answered this at the very beginning of her response. A lien would, therefore, automatically follow.
On section 7.
F. Gingell: I wonder if the minister could advise the committee if, to her knowledge, there's any section in any other act that is similar to this. It's a rather unusual matter. I can appreciate that the people who are responsible for the administration of the act would like it to be there, and it would help them. I wonder whether this is unique.
Hon. E. Cull: As a result of the passage of the Freedom of Information and Protection of Privacy Act, we in this House are going to start seeing more explicit provisions in legislation to deal with matters that have not had to be explicitly handled in legislation in the past. I can't answer whether there are any other acts with this provision in them or whether there are other acts that have always assumed the ability to do this. But we have checked this with the commissioner for freedom of information and privacy to make sure that we're following the proper procedure to access this information.
[F. Garden in the chair.]
Sections 7 to 9 inclusive approved.
Hon. E. Cull: I move the committee rise and report the bill complete with amendment.
The House resumed; D. Lovick in the chair.
Bill 17, Property Transfer Tax Amendment Act, 1994, reported complete with amendment to be considered at the next sitting of the House after today.
Hon. E. Cull: I call committee stage on Bill 3.
MANUFACTURED HOME AMENDMENT ACT, 1994
The House in committee on Bill 3; D. Lovick in the chair.
Sections 1 to 9 inclusive approved.
On section 10.
F. Gingell: I was wondering if the minister would just give us a little background on the new section 37.1, concerning whether or not this is designed to protect buyers and sellers of manufactured homes.
Hon. E. Cull: No, it's not a matter of trying to protect buyers; it's just a question of when a manufactured home is moved from one location to another without going through the registry and the registry becomes aware of that. Section 37.1 provides a procedure for the registrar to follow after being advised by the B.C. Assessment Authority that a manufactured home is not at the location shown on the register, or that a change has been made to the registered location of a manufactured home on the register. It allows for the registrar to take action as a result of being advised through, I guess, the non-normal procedure.
Sections 10 to 16 inclusive approved.
On section 17.
F. Gingell: I wonder if the minister could advise us if there are any thoughts in the minister's office as to other uses for such an electronic or computerized registry.
Hon. E. Cull: Sorry, I'm not clear whether the member is asking if there are other uses for this particular registry or whether he is asking if an electronic registry could be used in other situations.
F. Gingell: I am asking if any consideration is being given to other uses for this registry of manufactured homes. I must
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admit that I'm a bit lost. I'm asking questions on behalf of another member of caucus who is, unfortunately, committed to.... The question revolved around real estate office listings of manufactured homes for sale. That, to me, didn't seem what you had in mind, but I thought I should see if you do have any other thoughts in mind for the registry.
[F. Garden in the chair.]
Hon. E. Cull: You can only search this registry using the name of the owner or the location. Obviously, since we're trying to deal with the concerns of a member who isn't here, it's hard to be absolutely precise as to what his or her concerns might be. There would be protection around freedom of information and privacy in terms of access. Access is only by searching, using the two means I have mentioned. So the ability to provide access to a listing agent, or the ability of a real estate agent to suddenly find out information through a general search, would not be permissible.
F. Gingell: This is, in my memory, really the first revision of a registry operation since the Freedom of Information and Protection of Privacy Act was passed. Could the minister give the committee some idea of how that complicated, affected or influenced the way you had to structure all these changes as you pulled this registry into the latter half of the twentieth century?
Hon. E. Cull: I'm afraid I can't do that, because I wasn't involved in the detailed discussion with the commissioner's office on this matter. However, if the member would like to explore this further and have a look at what considerations were put before us, particularly in light of the fact that there may be future changes to move into a more high-tech world, I'd be happy to arrange for that.
Sections 17 to 20 inclusive approved.
Hon. E. Cull: I'm just going to clarify one point here that my staff advised me was incorrect in my answer. The search cannot be made by location; it's only name, serial number and the number of the manufactured home. So just for the record, I want to make sure that....
F. Gingell: The name, serial number and....
Hon. E. Cull: And the manufactured home registration number. So it's even more limited than I had led you to believe.
The Chair: Section 21 is before you. I neglected to mention section 21.
Section 21 approved.
F. Gingell: On a point of order, is 21 a separate section, or is that just a subsection to section 20? It's been put in different print and indented.
Hon. E. Cull: No, it's not a separate section.
The Chair: I've already passed that. Thank you for your question, hon. member.
Hon. E. Cull: If the member takes a look back through the bill, he'll see that the indent occurs any place that there is a title. That's what's misleading him there in thinking that it's a subsection.
In any event, I move the committee rise and report the bill complete without amendment.
The House resumed; D. Lovick in the chair.
Bill 3, Manufactured Home Amendment Act, 1994, reported complete without amendment, read a third time and passed.
Hon. E. Cull: We're making remarkable progress here. I would now like to call committee stage of Bill 16.
MINERAL TAX AMENDMENT ACT, 1994
The House in committee on Bill 16; D. Lovick in the chair.
On section 1.
F. Gingell: As I understand it, section 1 brings in a new concept: fiscal year of the operator. Many mining operations are partnership arrangements -- partnerships between various mining corporations -- or are in the hands of a single operator. They keep a separate set of accounts for that mine, and then each party picks up its own share of the results of that. Does this amendment contemplate a mine that is being operated and owned 100 percent by a single corporation being able to have a financial year that is different from the fiscal year of that one corporation?
Hon. E. Cull: In the absence of my staff, who I believe are on their way to the chamber right now, I will attempt to answer this. The current Mineral Tax Act defines the term fiscal year to mean the fiscal year of the mine. But with the addition of section 10.1 to the act to allow exploration costs to be carried by an operator of a mine without being allocated to any particular mine, it now becomes necessary to define fiscal years for operators as well as for mines. In section 1, (a) and (b) replace the term "fiscal year" with the terms "fiscal year of the mine" and "fiscal year of the operator," and (c) amends the definition of "investment allowance rate" to allow for two types of fiscal years. This provides greater flexibility for the mine operators to apportion their exploration costs according to their mining activity.
Sections 1 through 3 inclusive approved.
On section 4.
F. Gingell: I'd just like the minister's assurance that what is happening here is purely a set of regulations -- a formula, in effect -- to leave the mineral tax payable by a coalmine at the coalmine rate until March 22, 1994, and to move it to a base metal mine rate subsequent to March 22, 1994. We deal with these 13 percent rates, 17.5 percent rates, 2 percent rates and 7.5 percent rates. I'm making the assumption that the coalmine has a 17.5 percent rate, compared to a 13 percent rate, for the purposes of the calculation made under (a); and for the purposes under (b), it presently has a 7.5 percent rate for coalmines, which after March 22, 1994, will go down to a
[ Page 10495 ]
2 percent rate, which is the present rate for a base metal mine.
Hon. E. Cull: What section 4 does is create a straddle provision for the legislation. Because regardless of the effective date of the change in tax rates, there are going to be fiscal years of mines that are not in sync with that. They begin before or end after -- or, in other words, straddle -- the date. Since it would be impractical for us to determine revenues and costs before and after the date, it's necessary to specify what rate of tax will apply to such years. Section 4 sets out how the rate of tax will be determined for the straddle years. The new section 3.1 provides tax rates for the straddle years that will be the average of the new and old rates, weighted according to the proportions of the years before and after the effective date -- and the effective date is March 23, 1994.
F. Gingell: So the answer is yes.
Hon. E. Cull: Yes.
Sections 4 through 8 inclusive approved.
On section 9.
F. Gingell: Maybe the minister could refer back to the briefing notes. All section 9 does now is give coalmines a similar set of circumstances that existed for base metal mines. Or is this an entirely new allowance?
Hon. E. Cull: Could you ask that again, please?
F. Gingell: Perhaps the minister could explain to the committee what the consequences are of the amendments made under section 9.
Hon. E. Cull: In the way that you rephrased the question, you made it a longer answer. Let me give you a brief explanation of section 9.
The provisions of the current act require that exploration expenditures be added to the cumulative expenditure account of a mine in the year the expenditures are incurred. An intention of the amendments is to allow exploration costs to be added to this cumulative expenditure account whenever the operator of the mine chooses. A secondary intention is that the operator will still receive an allowance for a return on an investment in exploration. This requires a means by which the operator can accumulate and report exploration expenditures as they are incurred and before they are allocated to a mine.
F. Gingell: I'm sorry that I'm not better briefed on the questions. Does this mean that in future an exploration account will be kept by a corporation for each different mine that they have? Or will they keep one account and then allocate sums of money from that account against the income earned from different mines?
Hon. E. Cull: No, hon. Chair. This makes it easier for companies to deduct their exploration costs. They can essentially collect up their exploration costs and then apply them as the occasion arises and as they wish, to get the maximum benefit.
Sections 9 to 19 inclusive approved.
Hon. E. Cull: We are making remarkable progress this afternoon.
I move the committee rise and report the bill complete without amendment.
The House resumed; D. Lovick in the chair.
Bill 16, Mineral Tax Amendment Act, 1994, reported complete without amendment, read a third time and passed.
Hon. E. Cull: Committee on Bill 18.
MEDICAL AND HEALTH CARE SERVICES SPECIAL ACCOUNT ACT
The House in committee on Bill 18; D. Lovick in the chair.
On section 1.
L. Reid: Hon. Chair, is section 1 on definition?
The Chair: That's correct.
L. Reid: I would just ask a question in terms of "prescribed group." I understand that looks at practitioners in the field. Is it the intention to extend that group beyond medical practitioners? Are we looking at the creation of a category for supplementary service providers?
Hon. E. Cull: At the current time, as the member knows, this special account is being established to deal only with medical practitioners, but the "prescribed group" definition clearly allows that other professionals could be established under this act via order-in-council.
L. Reid: Again on the prescribed group, I understand the minister's comment in terms of medical practitioners in the field. When I look to the subaccount, it seems to me that there is the possibility for other groups to be created. Are we speaking of a group such as podiatrists under this section?
Hon. E. Cull: I'm just checking with some Ministry of Health staff who have joined me for this bill. Yes, that is contemplated, although it's permissive. It's something that the ministry would have to move towards. At the present time, and I know that the Health critic knows this very well, the agreement with the B.C. Medical Association actually contemplates and requires the establishment of a special account to allow for carryover from year to year. There isn't any other provision yet with other practitioners, but this would allow for it in the future if it was deemed to be a desirable and workable provision for other practitioners.
L. Reid: I certainly understand the minister's comments about how at some future point it may indeed be desirable, and I understand her point in terms of this being an accounting mechanism to allow carryover from year to year. My understanding is that under the B.C. Medical Association agreement, that carryover allows for five years. Has there been any discussion in terms of a similar time line on contract language regarding other care providers? Are we all looking at the possibility of five-year plans?
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Hon. E. Cull: A minute ago, the member mentioned podiatrists as an example of a group that might be covered under this. I am aware that podiatrists are having discussions with the Ministry of Health about a similar provision. There may be other supplementary practitioners who are also discussing this with the ministry. The carryover provision, though, would be a matter of negotiation, and it might be different for different groups. On the other hand, as a result of negotiations, it might be the same.
Section 1 approved.
On section 2.
L. Reid: When we talk about the medical and health care services special account being established, my understanding is that the maximum on that amount, the ceiling that can be carried forward, will be $40 million. If there is a surplus at some point, where will those surplus dollars end up?
Hon. E. Cull: The $40 million limit that the member mentions is with regard to the BCMA. Casting back to the discussion we just had, there might be other amounts for other groups. But if that amount is exceeded, the money returns to consolidated revenue.
Section 2 approved.
On section 3.
L. Reid: I would ask for a very brief explanation in terms of moneys recovered from audit and put into the special account through an order-in-council. If the minister can just take a moment to explain how that process works, that would assist the discussion.
Hon. E. Cull: Where the ministry undertakes an audit of the activities of a practitioner from a previous year, and it is determined that the practitioner received payments that she or he was not entitled to receive, the repayment to the government of those payments would go into this account.
Sections 3 to 5 inclusive approved.
On section 6.
L. Reid: I would just draw the minister's attention to the last section, 6(3): "...however described, are deemed to be references to the commission." For the record, are we referring to the Medical Services Commission?
Hon. E. Cull: That's correct.
F. Gingell: I was wondering if the minister would allow me to ask a question that deals with the bill in its general form. We seem to go through little cycles, where we create special accounts and we get rid of them. They don't accomplish what they're intended to do, on occasion. I have a most embarrassing situation every so often: I have to phone the comptroller general's office to talk to someone who can go through the exercises and remind me again exactly how they work. With my 40 years as a chartered accountant, I can understand the problems of other people in trying to understand these things.
Are we going to end up with a set of circumstances where funds truly are available to be moved from year to year, or are they still going to have to go through the normal exercise of their being voted in appropriations?
Hon. E. Cull: A special account allows for a statutory expenditure, so it doesn't have to be voted in from year to year, and that's the whole purpose of this. I don't necessarily disagree with what the member was suggesting around special accounts. I generally don't like them; we're better off with fewer of them than with more of them.
In this case, if we recall recent history, a lot of work was done with the B.C. Medical Association to deal with the question of health services utilization, particularly the use of medical services. The doctors said: "If we are to cooperate and join with you in an effort to reduce the utilization of our services, we think there should be some benefit to the physicians of the province for doing that." One of the ways we can achieve that benefit is to create the ability to save the money in years when utilization goes down, then be able to spend it in years when utilization might increase and be able to provide benefits to practitioners for good behaviour. It's really an incentive system to encourage the behaviour that I think we all agree is desirable in terms of managing the health care system. It gives us the flexibility that just doesn't exist now. We saw that quite well in past years. The Medical Services Plan was overspent every year, and there had to be a special warrant to top it up. We also saw the unusual circumstance in 1992 when it was actually underspent, and that created its own problems for the next budget year.
F. Gingell: Members of cabinet, or the Lieutenant-Governor-in-Council, continually say that the special account is meaningless because there isn't any money in it. Is this special account going to be unique in that manner? Will there actually be a savings account at our local friendly credit union, marked "special account for the Medical and Health Care Services Act"?
Hon. E. Cull: I agree that it is somewhat confusing when you start dealing with special accounts. There won't actually be a bank account entitled the medical and health care services special account that will have money deposited in it to be drawn upon in subsequent years. It is simply a notional account in consolidated revenue. This allows access to the funds in the notional account by a statutory appropriation, as opposed to a voted appropriation. Therefore, it gives greater certainty to those who might draw on it that those funds can be drawn upon without having to go through the process of deciding expenditures.
F. Gingell: The decision to make those expenditures will be made by the Lieutenant-Governor-in-Council. Although the expenditure is statutory, rather than voted -- i.e., it is being voted now forever -- it still has to be included in the budget for the year. The Minister of Finance will forever be juggling with the problems she was speaking of earlier: competing demands and how you pay for them. Is there really any guarantee here that is different from the commitment of a minister to have continual funding for programs?
Hon. E. Cull: Yes, it is different, because this legislation arises as a result of the agreement struck between the government and the B.C. Medical Association, and that gives life to the act and also gives the requirements for the expenditures. Right now, because we're only dealing with medical practitioners, payments can only be made out of the account in accordance with the agreement. The minister
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must authorize them, but they must be in accordance with the agreement or with the provisions of the regulations.
This gives the minister and the Medical Association the ability to say that we will allow savings to be moved from year to year up to a maximum of $40 million a year. That money would also be used to pay for overexpenditures. It is not really transferring money from one account to the next, so it is notional rather than real in the sense that dollars move backwards and forwards between different accounts. But what it does do is allow the agreement that was struck to be implemented. Without this, we wouldn't be able to provide that more money be available that would be entirely related to an underexpenditure.
Section 6 approved.
Hon. E. Cull: I move the committee rise and report the bill complete without amendment.
The House resumed; D. Lovick in the chair.
Bill 18, Medical and Health Care Services Special Account Act, reported complete without amendment, read a third time and passed.
Hon. E. Cull: I call committee stage on Bill 14.
BUDGET MEASURES IMPLEMENTATION ACT, 1994
The House in committee on Bill 14; D. Lovick in the chair.
On section 1.
F. Gingell: I'm sure that no one really expected section 1 to pass without a little lecture from me on this matter. We will support this section wholeheartedly. We're really pleased that the government has taken our advice. We wish that you would take our advice more often, but we congratulate you on your wisdom and foresight in taking it on this occasion. We don't think it's the job of government to speculate with taxpayers' money, to tax us all for the purposes of speculating in the stock market, however capably and however well those functions may be carried on by the staff of the investment group in the Ministry of Finance. They are busy enough looking after the many billions of dollars in trust funds.
I think this is an opportunity to say a few more words about that. I appreciate that government expects members of the opposition to yell "conflict" on every possible occasion, and we certainly do. I guess it is a disease, the bugs of which linger on within these hallowed walls, because it used to be shouted out with glee by members of the government when they were in opposition. In fact, we are keeping count and are presently only calling out "conflict" at about 37 percent of the rate of the previous opposition.
But on a more serious note, when we were given the investment portfolio of the B.C. Endowment Fund recently and saw the very substantial investment that the Endowment Fund had in Westcoast Energy, and when one recognizes all of the arrangements, guarantees, contingent liabilities and commitments that were made with respect to Centra Gas and the Vancouver Island pipeline, one can see that it does become difficult. Conflicts are rife there. Government needs to deal with hands off on these issues. You need to be able to do that which is right and fair for everybody, without considering any other issues or worrying about the price of a share in MacMillan Bloedel, Westcoast Energy or any other forest products company that has government-granted rights to harvest timber.
So I really am pleased. I hope they liquidate the assets of the B.C. Endowment Fund as quickly as they reasonably and properly can. I think they will find their responsibilities in government much easier to respond to and administer in the future.
Hon. E. Cull: I thought I should rise -- although that was a statement, not a question -- just with respect to the arm's-length relationship of the Endowment Fund and government decision-making. That too has concerned me, as Minister of Finance, and our government with respect to the conflict issues.
Justice Peter Seaton, as I think all members know, did a review of whether the government could be in conflict in such cases and concluded that there was no conflict, real or apparent. But he then went on to make a number of suggestions that could reinforce the separation between the government in its decision-making role on all kinds of policy issues and in its investment role. We will continue, of course, to have an investment responsibility for government pension funds and the like, and that issue may still be there in some people's minds. We will be undertaking a number of measures during this legislative session to work to implement the recommendations of Justice Seaton.
In addition, the member now knows as much about the Endowment Fund as I do, in that it....
F. Gingell: I don't know the original cost of the original investment.
Hon. E. Cull: The member is saying he doesn't know the original cost of the investment, and neither do I, although obviously that information is available with my staff. The day-to-day operations of the Endowment Fund are managed by our chief investment officer, Doug Pearce, who is with me here in the House. It's important that we all acknowledge that the decisions he and his staff must make are not discussed with me in my role as Finance minister. I'm absolutely rigorous on that requirement.
F. Gingell: There is just one last thing that I wish to state on the issue of conflicts. There was this very interesting 1993 publication by the government, which came up in question period yesterday, that deals with a whole series of issues for senior staff members of government. It deals with sexual harassment, racism and sexism and also the issue of conflict of interest. It recognizes that everybody, all civil servants and employees of the ministries, have private lives. But the key interesting sentence in it was that if it is reasonable for someone to perceive that there is a conflict of interest, there is -- even though Mr. Justice Seaton, in looking at all those facts, recognized the clear division between the responsibilities of the investment group within your ministry and the various groups outside that advise them and on whose recommendations they are to act or not act. That's within your own government guidelines for employees. I'm just really pleased that you've moved in this
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direction, and that the British Columbia Endowment Fund will be wound up.
Sections 1 to 3 inclusive approved.
On section 4.
F. Gingell: I was wondering if the minister could advise us about the ongoing costs that arise from winding up the Energy Council. I appreciate that costs for the year March 31, 1995, are included in the budget documents, and they're quite clear for us all to see. Could the minister please advise the committee if there are any costs that continue past March 31, 1995, that this government or the people of British Columbia will be responsible for with respect to matters and contracts entered into under the program entitled the Energy Council Act?
Hon. E. Cull: No. We're going to be able to contain all of the costs of the Energy Council within this year's budget. There is still some work to be done, which is why the Energy Council is not being wound up immediately. They do have to complete some work, but the budget allocation in the '94-95 budget is sufficient to address those costs.
F. Gingell: The kinds of costs that might be ongoing that one immediately thinks about in these circumstances are salaries and rental arrangements for premises. Not dealing with the issue of whether the property can be occupied by some other government ministry, which is a way around it, or by individuals assigned to new assignments, can the minister advise us if there are any costs that are not included in the 1994-95 budget that will be paid to individuals or corporations under contracts entered into by the B.C. Energy Council?
Hon. E. Cull: Again, I'm not aware of any costs that would extend beyond March 31, 1995. The budget has been designed in a way to be able to cover all foreseen costs. There is a rental agreement, which I believe will also be accommodated in this year's budget. The practice that we are pursuing with the various agencies being eliminated as a result of the budget decision is to use what is known as our managed-hiring process, which is a policy throughout the public service right now that requires in-service hiring to occur before out-of-service hiring takes place. Through that process, we should be able to place a number of individuals in other vacancies in government who have skills that would be needed in any event, at no additional cost. If there are severance costs, they will also have to be accommodated under the budget.
F. Gingell: I take you to say that as far as rental properties are concerned, offices which I believe they had on West Hastings Street in Vancouver.... Perhaps the minister could confirm that. You don't know where?
Hon. E. Cull: I'm sorry; I don't know the location of the office space. The staff of the Ministry of Energy, Mines and Petroleum Resources that are here with me don't have the address, either. It is in Vancouver, but I don't know the address.
D. Jarvis: To answer your question, the office is on the fifth floor, I think, at the corner of Hornby and Davie Streets.
I am in full support of this repeal, of this aspect of the act, and I can't go away without saying a few things. What the Liberal Party asked at the time this Energy Council was first formed was: what could be done by this council that couldn't already be done through the Ministry of Energy, Mines and Petroleum Resources? The minister had a staff of approximately 400, plus or minus, and all this was going to do was increase a further bit of bureaucracy and cost the taxpayers millions of dollars to ostensibly supply a job for an ex-NDP candidate. We felt it was an excessive waste of the taxpayers' money. If you read the mandate of the Energy and Mines portfolio and the mandate in the Energy Council Act, you will find that they are the same thing. So the minister did have plenty of staff to do it for her, and it was a completely unnecessary situation.
The other aspect we noted is that when the Energy Council was first brought up, it was in two-year increments. At that time we felt that the chairman could have had his contract for the two-year-increment period. Instead, they gave him a five-year contract. We've now gone through two years. The end of this year will be the third year. Because the Minister of Energy and Mines couldn't say if he was going to do any other work for the government, he'll be sitting at home for two years picking up $150,000 a year.
The Chair: Member, could I ask you to take your seat for just a moment. I want to remind you that we are now in committee stage, and we are dealing with a particular section of the bill that, in this instance, has the effect of disbanding the particular item that you are choosing to talk about. I am having difficulty finding the relevancy of your remarks. We canvassed the principle of the bill in second reading, so I would ask that you please wind up your remarks rather quickly. I hope you have a question on this.
D. Jarvis: I was saying that I agree that this act should be repealed. I would ask the minister if she could possibly tell us how many dollars have ensued with this council up to this point, and how much more will be spent until the final day of '95 when it is disbanded.
Hon. E. Cull: The budget last year for the Energy Council was $1.5 million, and this year it is $950,000, so there is the cost of the Energy Council. Contrary to what the member has suggested, the council has done valuable work that the government did not believe could be handled by existing staff within the ministry. They did an excellent consultation process with respect to exports, and they're currently completing work on a provincial energy plan.
From time to time, governments of all sorts create bodies to do specific tasks. When they have finished their work, governments have the challenge of trying to wind up those bodies. When we formed government in 1991, we discovered there were all kinds of bodies and agencies that still existed on the books, some of which hadn't met for many years, some of which no longer had any useful purpose. We did begin to systematically wind up and eliminate those.
If the member is suggesting that having created something, one should never say that its useful purpose has come to an end and we're going to eliminate it, I can't agree with him. I'm pleased that he's supporting the bill, and I don't think there's any shame in acknowledging when you've created a body that did useful work and the work is finished. You thank them, and you move on through other processes.
F. Gingell: I would just want to say, seriously, that we would never wish to discourage the ministry from setting up task forces to do these things. But I think the position we take
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on these issues bears repeating. We don't have to set up a council to do the work of a task force. We can assign people out of....
The Chair: Member, I'm sorry, would you please take your seat. I have cautioned your colleague already. I have allowed both sides to state the position they are taking with regard to the late Energy Council. We are in committee stage now, and there is no useful purpose being served, in terms of a furtherance of this particular measure before us, in continuing that debate. I'm suggesting to both sides of the House that we have canvassed this matter. Unless the member has a question, I'm going to ask that this section be passed.
F. Gingell: So that there is no misunderstanding with respect to the questions that I asked earlier, the intent of my question was to ensure that any costs that are related to ongoing contracts signed by the Energy Council are included in this year's estimates. At the moment, I understand that the minister has said yes. Therefore this year's estimates include all of the costs of Mr. Gathercole, who was hired, and there's not any additional amount to be paid to him under any other vote at any other time in the future after the year ended March 31, 1995. That is also true with respect to office space that has been rented or to any other employee who has been hired.
Yes, I appreciate, understand and thoroughly agree with your in-service program that would take employees not employed under contract but just in the normal course of events at the Energy Council and give them the ability to move on to others. Their separation pay, had they been separated, would have been included in the budget anyway.
Hon. E. Cull: Just to clarify that, I am not aware of any costs attributable to the Energy Council that will go beyond this budget year. But clearly, if there is a clerk 3 working for the Energy Council who is moved to the Ministry of Finance, there will be ongoing costs related to that individual because she will continue to be employed by the government. Similarly -- and I don't know the makeup of the staff at the Energy Council, so I'm just using examples here -- if there were someone who right now was performing services for the Energy Council on a contract basis, and that person was subsequently hired again by the Ministry of Finance to perform contract services, moneys would still be paid there, but it would not be related to the Energy Council. There are a number of circumstances that would have to be looked at to trace every one of those through. With respect to the intent of your question, which I understand to be whether the Energy Council's cost is going to pop up somewhere else in some other year in some other budget, to the best of my knowledge right now the answer is no.
D. Jarvis: I want to clarify that one point again. All the costs are going to be wound up inside this fiscal year of 1994-95, except for any outstanding contracts. Will Mr. Gathercole's contract, which runs to '97, be included in this year's budget, or will it run on until '97? Has it been paid up in full for the last two years?
Hon. E. Cull: With respect to Mr. Gathercole, negotiations are underway. If Mr. Gathercole is subsequently hired in another capacity, then there would be costs associated with that. But no decisions have been made with respect to Mr. Gathercole's continuing employment with the government. If he is wound up entirely and there are severance costs related to that, it will have to be borne out of the Energy Council budget.
F. Gingell: I don't think we want to spend any more time on this, but my understanding of what has been said is that every single cost that relates to every single contract that the Energy Council has entered into is included in this year's budget. Perhaps it's appropriate, because this council is outside the minister's responsibility, that the responses which have been given be reviewed and we be advised if that is not the case. I understood you to say that if there are severance costs in relation to Mr. Gathercole, they have been recognized now and are included in this year's budget.
Section 4 approved.
On section 5.
F. Gingell: Section 5 deals with investments that are perhaps not as readily marketable as one would expect in an investment fund. Could the minister advise us if there are any securities in the British Columbia Endowment Fund that fall into the category described under section 5 (1.1), the amendment to section 36 of the Financial Administration Act?
Hon. E. Cull: The member needs to be aware that this section is simply a grandfathering -- grandparenting may be the more appropriate term -- which would allow us, as we eliminate the B.C. Endowment Fund, to transfer some assets of the fund into the general fund. Specifically, what's in mind here is B.C. Focus, which you may be aware of. I hope you're aware of it. B.C. Focus is the venture capital funds that were established last year, and we will want to continue that. The budget this year added another $10 million to that fund to allow us to continue investing in growing B.C. businesses that are in need of venture capital.
Sections 5 and 6 approved.
On section 7.
F. Gingell: During second reading debate on this bill, we spoke about the effect of this change. What's happening is that a further 0.13 percent of teachers' salary costs are now going to be required to be paid out by all 75 school districts in the province. We all know that school boards struggle with budget issues. Could the minister please advise us if this specific 0.13 percent has been included as a recognized additional cost to go with additional costs that come from the increases at Hydro, the Workers' Compensation Board and a whole bunch of other things that tend to be outside the control of school boards? Has this specific item been dealt with in the budgets of the school boards, or is it something that comes along to them later, as a surprise?
Hon. E. Cull: This amendment corrects an anomaly that exists only with respect to the education pension plan, the Pension (Teachers) Act. In other cases, such as in the Ministry of Health or where employees are covered under pension plans, this contribution has always been paid for by the employer. Historically, the Ministry of Education actually made these contributions. This amendment will now bring this pension plan into compliance with all of the other pension plans.
It's unusual for a provincial ministry to make a direct contribution of this nature into a pension plan. This is
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simply arising as a result of historical events, which are no longer current, in the way that the pension plan is managed.
F. Gingell: I almost feel like asking for a recess while I go back and think about that response. Am I hearing the minister say that steps are being taken to ensure that the teachers' pension fund, which is entirely separate and distinct -- in fact, there are even questions about whether the provincial government is liable for unfunded liabilities -- is to be exactly the same and have the same circumstances as the public service pension fund?
Hon. E. Cull: The better comparison would be with the municipal plan or the college plan, where we are not the direct employer. Even though we have ministries of Skills, Training and Labour and Municipal Affairs, we don't make contributions to those pension plans to cover this kind of benefit, and neither should we in the case of Education.
F. Gingell: Was this a decision to have Medical Services Plan premiums for retired teachers part of a package that was negotiated with anybody?
Hon. E. Cull: This coverage of medical premiums and the like for retired teachers is not a new provision: it's been there for some time. The decision was made, though, to locate the payment for that appropriately, where it should be, which is with the employer, as is the case in the other pension plans. I'm stating the obvious here, but in the case of the pension plans the employer and employees make contributions. Third parties don't make contributions, with the exception of the Pension (Teachers) Act, which had the third party of the Ministry of Education making this contribution. As I said, this is an anomaly; it arises out of historical circumstances, and is being corrected.
F. Gingell: Perhaps I've got the wrong end of the stick; it's happened before.
This additional 0.13 percent is going to be paid by the school districts. Is that correct?
Hon. E. Cull: That's correct. The school districts are the employers.
F. Gingell: Then I didn't have the wrong end.
The question that I started off asking was: has the additional 0.13 percent that the school boards will now pay in excess of what they paid last year as a percentage of their total teachers' salaries -- the people that are covered...? Have those additional funds that are required -- which in the case of some school boards will be quite large -- been provided for in the 1994-95 budget? Will the government be making an additional payment to those school boards to give them the funds to make these payments, or will they be required to lay off teaching staff accordingly? One can appreciate that any school board that has more than a thousand teachers lays off at least one teacher to pay for it.
Hon. E. Cull: Let's put this in perspective. Across all 75 school districts, the total cost of this decision is $2.3 million in a budget of $3.2 billion, so we're talking about a very small part of the overall budget. I believe the Minister of Education advised the board at the end of January that this decision was forthcoming. In working our way through the budget decision with respect to the Ministry of Education, this was part of the information base that we used in calculating how much additional money should be required by the districts and then weighing out how much we could actually afford to allocate to them. Obviously, it's not simply an arithmetic problem that we go through at budget time, but this information was known by Treasury Board and by the minister.
F. Gingell: Fine. If the school boards were aware, then obviously they have taken it into account, and it's just part of their ever-growing problem of trying to deal with the problems of education funding.
It's all very well, though, for the minister to say that it's only $2.3 million out of a total budget of $3.2 billion. At $50,000 a head, it's still 46 teachers. That's still a fairly substantial item at a time when there is such pressure on education funding. I feel that the government is struggling to find solutions and is not being terribly successful. I'm surprised that you would make this change at this time, which just adds to the pressures that school boards face.
Hon. E. Cull: Clearly the money all comes out of one source at the end of it all. So it's $2.3 million that would not have been available to go into the $3.2 billion overall had we not made the decision. It's either paid for directly by the employers, which then puts the pension plan on the same footing as all the other public sector pension plans, or it's part of the overall Ministry of Education budget, which has to look at both operating costs and other costs as well as the grants to schools. So at the end of the day, the impact is probably pretty well the same.
M. de Jong: I take some exception to the minister's choice of words. She describes this as the correction of an anomaly. Well, if it's an anomaly, it's one that's been in place for many, many years; for many, many years budgeting has been carried out on this basis. I wonder if the minister can indicate how this correction of the anomaly is any different from good, old-fashioned downloading, because that's the effect. It's a passing of responsibility for payment of funds from one level of government to another -- the very same down-loading that she quite rightly decries when the federal government attempts to do it. It makes budgeting at the local level extremely difficult.
When the minister says that it's a fairly insignificant amount of money, with the greatest of respect I can tell you that in Abbotsford, the district I am involved with, it has been calculated to be in excess of $200,000. That's not an insignificant amount of money. That $200,000 has been downloaded from the provincial government to the local level of administration. Why is this different from the downloading that she criticizes?
Hon. E. Cull: There are two things you have to consider as you look at this question. First of all, you have to consider other employers in equally difficult situations. A few hours ago we were talking about local government grants and the need for municipalities to have funds from the provincial government to carry out their activities. It's clearly unfair for us to have treated one pension plan differently. The municipalities or colleges would have an equally strong argument to come back and say: "Why don't you cover those expenses for us? You're covering them for the school boards. Why are we as employers being treated differently than school districts as employers?" That's one of the things we have to consider. We certainly weren't going to move in the other direction. It wouldn't have been prudent to do so, and it wouldn't have been a wise use of public funds at this point.
As I said a minute ago, when you look at it in the overall scheme of things, the Ministry of Education puts its budget together and, whether that money is paid for outside of or inside of the direct grants to government, that ministry's budget is only going to be so large in any event. The $2.3
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million would not have been available in the direct local government grants if it hadn't been transferred to those employers. Leaving it where it was would have meant very slightly smaller grants to school districts. It might not necessarily have reflected the true cost to each district of paying for their retired teachers. To put this on an equal footing, we are trying to modernize pension legislation. We've put advisory boards in place in the last year. A lot of work has gone on in the last little while to look at the redistribution of benefits within that plan, which are ongoing and soon to be put into place. This is part of an overall process of trying to bring pension management into a consistent and modern format.
M. de Jong: I've listened to the minister's answer, and if the figures are correct, the logic is irrefutable -- that is, if the cost of this amendment to each individual district has been calculated and the block allocation has been increased proportionally, it's one and the same. No one is further ahead or behind. Is the minister satisfied and prepared to offer assurance that that has taken place in the case of each and every school board -- namely, that the cost to those boards has been calculated, considered and a similar amount tacked on to their block allocation for the forthcoming budget year?
Hon. E. Cull: We have here -- and I would be pleased to send the member information on his school district if he likes -- the calculation of the impact of this on school districts. In the case of Matsqui, it's probably closer to $70,000 of the $200,000 that has been estimated.
The member then goes on and asks if those calculations have been done and if they have been added on to each block funding. The answer is obviously no. In terms of building the Ministry of Education budget, we look at all the costs. We look at the costs of employment, salaries, wages and benefits for all employee groups; we look at enrolment and operating costs -- and this would be part of the operating costs. We look at all of the factors that would cause a school district to spend more money next year than it did this year.
It's not simply a matter of arithmetic. If we were working on that system where all we did was look at schools and add up all their costs and say that that's what their budget should be -- and with hospitals, and on and on -- the budget increase this year wouldn't have been 3.5 percent; it would have been in the double digits again. Decisions are made on spending that are beyond simply totting up all the costs attributable to a district. We have to make judgments as to what can be spent on schools versus highways versus the environment.
That is a very simplified way of explaining what goes on in the Treasury Board budget-making process. We're aware of the cost drivers. The Ministry of Education, as other ministries, does an excellent job of describing those cost drivers to the board members. But at the end of the day, we don't simply add it up and pay them. There have to be other decisions brought to bear -- namely, how much we think spending can go up, what size of deficit is acceptable and how much we add to the overall debt. All of those other considerations have to be brought to bear on the final decision.
M. de Jong: Will the minister therefore acknowledge that by taking this step, the discretionary spending authority available at the local level has been further limited?
Hon. E. Cull: No. I think that what's happened is that the accountability of the employer with respect to their pension costs is more directly attached to the employer.
Section 7 approved.
On section 8.
G. Wilson: With respect to the proposition of what is intended here, section 8 says: "The commissioner shall, out of employer contributions to the inflation adjustment account of the fund, pay to the Medical Services Plan of British Columbia on behalf of the person the portion of the premium...." Could the minister tell us what the actually estimated cost of that is going to be -- which, essentially, is now going to have to be picked up through this downloading? I think it is a question of downloading, and I think the minister would accept that it is. Presumably, if there is a movement toward this coming about, that has to have been built into the cost factor. I think it would be important for us to recognize whether the minister has actually estimated the impact of immediate cost and what the long-term costs are going to be with respect to this provision.
Hon. E. Cull: Sections 7 and 8 are interrelated. I guess that in answering the questions under section 7 we strayed a little bit into section 8. The amount there is $2.3 million.
G. Wilson: I apologize. One of the problems with splitting this House is that you can't be in two places at one time. If these questions have been answered I will just refer to Hansard and not take the time of the House to go back through it again.
In terms of that impact, could the minister inform us whether that is going to be felt in a manner disproportionate to the larger boards as opposed to the smaller boards? We are hearing from my community in Powell River-Sunshine Coast that this is going to have an impact on those areas that have a disproportionate number of instructors to administrators, as opposed to those that have a greater administrative capacity. Has that been considered?
Hon. E. Cull: The impact should be proportional to the size of the district, because it is directly related to teachers' salaries and the number of teachers employed. Larger districts would have more teachers, therefore a larger salary bill. Smaller districts have fewer teachers and a lower salary bill. So it shouldn't be disproportionately borne by smaller districts.
G. Wilson: Notwithstanding the size of the district in terms of number of teachers, I am hearing that there is a different ratio with teachers to non-instructional staff. In consideration of this move, there is concern that consideration has not been given to those districts that may opt to bring in non-instructional staff that are obviously going to have to be financed or paid equally to teachers. Those districts with disproportionably high numbers of support because of programs that have been entered into are going to find themselves better off than those that have concentrated their moneys into direct instruction.
Hon. E. Cull: I'm not sure that I can fully answer that question right now. I will make certain that staff from the ministry take note of the question and provide you with a more detailed answer. Because this relates to teachers, it may not have the impact you are suggesting in relation to the proportion of instructional versus non-instructional staff, but we do have the figures for the districts. We can have another look at that and provide you with that information.
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F. Gingell: One very quick question to follow up on the question from the member for Powell River-Sunshine Coast. The figure of $2.3 million was given to us as being the additional 0.13 percent that will be paid. The same $2.3 million is the answer given to the member for Powell River-Sunshine Coast as the cost of paying the Medical Services Plan of the retired teachers, so it's an even balance. Is that true?
Hon. E. Cull: It is the same figure, so the simple answer is yes.
Section 8 approved.
On section 9.
M. de Jong: I asked the minister earlier if she felt section 7 and, implicitly, section 8 represented constraints on the discretionary spending authority of school boards. My question to her is the same insofar as section 9 is concerned.
Hon. E. Cull: Did the member ask whether I believe this section limits the discretional authority of school boards?
M. de Jong: That is the question.
Hon. E. Cull: Clearly it does; that is the intention of this section of the act. It provides for targeting or capping of allocations to ensure that the money the Ministry of Education puts into budgets for specific purposes is actually spent directly on those services to students. In the case of aboriginal education, students with special needs or administration, there are now some requirements.
I heard the opposition Finance critic say "Big Brother." The ministry has worked over the last number of years to get districts to pay more attention to these particular concerns. When I was a school trustee, every year that I sat at the board table we were lobbied by parents who said: "We're not getting a fair allocation of the dollars that are coming into this district." Because those issues ultimately end up back on our table and we get criticized for not providing sufficient funds, the province has to find some way, if we're going to enrich funds to special education, that the benefits are actually achieved in the classrooms.
With respect to the administrative costs, you will see that matter dealt with throughout the public sector. The public is demanding that there be greater accountability for administrative costs, that they be limited and that they be reduced before we reduce services to students. That is the decision that's affected by this particular part of the act.
M. de Jong: Implicit in the minister's answer, I'm afraid, is the suggestion that we in Victoria know better. That is what we are forced to conclude both by her answer and by the legislative approach adopted by the government in Bill 14.
The minister defends section 9 on the basis that it affords the ministry with an opportunity to target a couple of areas. She talks about special needs students and administrative costs, but she neglects to mention aboriginal education, which is also referred to specifically in that section of the bill. That might be defensible on the basis that the minister has articulated: as the government's response to representations that it received from the public. I would still suggest that those publicly elected officials most closely associated with the community are necessarily those who will be most responsive and accountable. Nonetheless, the minister makes a decision that Victoria knows best and will handle the matter.
It's 125.1(3) that I would like to ask the minister about: "A board shall budget and spend its allocation in accordance with any direction of the minister provided to it under this section." Can the minister tell us, after in excess of 100 years of history in local school administration, why at this point she and her government feel that it's necessary for the provincial government to step in, in such a heavy-handed way, and essentially say, by virtue of 125.1(3): "We are going to provide you with the money, and we are going to tell you exactly how to spend it"? What will be left for local boards to decide?
Hon. E. Cull: When I think back on the hours and hours that I spent as a local school trustee making all kinds of decisions with respect not only to budgets but to education policy, personnel policy, facilities planning and the like, there is no shortage of things to occupy school trustees in exercising their decision-making powers. Clearly the public has spoken out on this. We have heard from parents and from people speaking on behalf of students that the decisions being made were not representing their best interests. The province was allocating money to special education and aboriginal education, and that money was not going to those purposes in the school district.
In the old days -- when you talk about 100 years ago -- school districts raised their own taxes and spent their own money. The accountability loop was complete. But today the vast majority of the Education budget comes directly from the provincial government and is not raised by local taxpayers. When that budget is inadequate, or deemed to be inadequate by the parents of a special needs child or by anyone else in a district, they fault the provincial government for having failed to provide additional money. This year we provided $30 million of additional funding to special education. We wanted to ensure that every cent of that money went to those children, because the need that teachers and parents brought to us -- and indeed the concern that trustees brought to us -- was that there was not sufficient funding to deal with those needs in the classroom. There is no point in providing that additional funding if you can't ensure that it gets there. That becomes part of the accountability loop that's required as a result of the changes we've seen in education funding over the last 100 years.
M. de Jong: The minister refers to her former time on a school board. I would suggest to her that the first place those people stop in expressing their concerns regarding spending allocations is at that local level. Those are the people who will be most and best acquainted with the difficulties a particular administration or school board is facing.
I return to my earlier question to the minister, which I don't think she addressed. She has specifically referred to special needs students and to administrative caps on spending. Representations have been made at the local board level and, I'm sure, to the Minister of Education as well. Is the minister really suggesting that school boards and local people have told the Minister of Education and her government that by virtue of section 9 of Bill 14 they want the ministry to tell school boards in a whole range of areas.... The minister has to acknowledge that this section empowers the minister and the ministry to attach conditions that go far outside the areas she has dealt with, such as special needs students and administration. Is she really going to have us believe that those representations have been made to her ministry? If she's going to suggest that by virtue of statutory draftsmanship, the section precludes that and limits through its wording which areas the minister can
[ Page 10503 ]
direct spending to, then I'm going to suggest to her that she's dead wrong.
Hon. E. Cull: I'm not going to get into a battle of legislative drafting with the member across the floor. Section 125.1(3), which he is referring to, says: "The board shall budget and spend its allocation in accordance with any direction of the minister provided to it under this section" -- this section being the one that deals with special education, aboriginal education and administrative costs. Under this section, those are the only areas to which targeting or capping can be directed by the minister.
The member should also be aware that this is a floor. In its wisdom, the board can provide more money to aboriginal education and to special needs education to meet local needs if it so chooses. Having provided the money for that, the province cannot then reallocate it less than that. In the case of administrative spending, we would be delighted if school districts could spend less than the capped amount, but that is their decision, and they will determine their own needs.
G. Wilson: The concern that members of the Alliance have on this is the wording. We're hearing the minister suggest that we're really listening to the people here and that it's the parents who have said they want this money. But if you look at the language in this section, it says under 125.1 (1)(a): "...students enrolled in (i) an...education program specified by the minister...." It doesn't say this is for moneys for matters related to aboriginal education. It says "an aboriginal education program" -- an educational program. It says here similarly with respect to special needs: "an education program specified by the minister...." So we're not talking about general funds that are going into special needs funding; we're talking about programs.
The question that is being directed to us is: which programs? There may be within a school district two or three programs that are recommended for implementation. Who gets to decide which program this minister is going to fund? Is it going to be the minister? Is it the local board? Is it the local teachers' association? Is it the people who are involved in working with children with special needs?
There are many different approaches to the use of these facilities and many different programs that are advocated by people who have different interests. I think the minister needs to clarify who gets to choose the program that gets the money.
Hon. E. Cull: Let me give you an example that I think will clarify that question. But before I do that, I'm just going to mention a piece of information I wasn't aware of. The education finance advisory committee also recommended this approach to the Ministry of Education. So this was through the process put in place to look at education finances.
If you look at special education, I count 11 different programs, and those are the special education programs that the minister will specify under this section. Then there will be one targeted lump amount. I don't know if these titles are helpful to you, but it would include things like: program No. 104, learning assistance; program No. 118(b), low-incidence -- job training; or program No. 133, hospital-homebound. All of those are examples of existing programs that will be specified by the minister under this section. The targeted amount is a lump sum for all 11 programs. The districts will then make decisions as to how they allocate between those 11 programs, clearly based on the needs of their student population.
G. Wilson: That is indeed where many local boards are very concerned, because we recognize that programs already exist, that there is approval for them and that they will vary in cost of delivery. Different districts are going to require implementation of different programs, and there is a different cost attached to them.
The problem we have is that if the educational allocation for programs for students with special needs comes from the minister, and if that has to be a proportional amount tied to those programs -- and I'm the first one to advocate that special needs funding be dedicated; I don't have a problem with that -- the district has to have the flexibility to allocate moneys within that percentage of total allocation. Surely the minister would have been better off if she had moved to put simple proportions of total allocations into place here, rather than to provide power to the minister to make application for that provision.
That's something that we can maybe pick up on in the next go-round on this matter; but noting the hour, I would move that the committee rise.
The House resumed: the Speaker in the chair.
The committee, having reported progress, was granted leave to sit again.
Committee of Supply A, having reported progress, was granted leave to sit again.
Hon. E. Cull: We have indeed made remarkable progress today. Before moving adjournment, I'd like to advise the House that we will be sitting tomorrow, Wednesday. I move that the House do now adjourn.
The House adjourned at 5:58 p.m.
The House in Committee of Supply A; G. Brewin in the chair.
The committee met at 2:42 p.m.
ESTIMATES: MINISTRY OF ABORIGINAL AFFAIRS
On vote 9: minister's office, $319,041 (continued).
The Chair: When we broke, the hon. member for Peace River South wished to discuss some items. In the meantime, would the minister like to make some statements at this point?
Hon. J. Cashore: Yes, I'm going to respond to the question he asked, even though I've responded to it before.
The Chair: And he's not here.
[ Page 10504 ]
Hon. J. Cashore: He's not here, but if he asks the question again, I will refer him to the fact that I have responded, and I will send him a copy of the written response that I'm going to place on the record.
British Columbia is committed to the resolution of treaty settlements with the aboriginal first nations of our province. We have made this commitment because we can no longer afford to ignore issues that will have a profound effect on all our lives in the years ahead. The status quo is no longer a viable option for this province. Social stability and economic certainty are essential to the well-being of all British Columbians. The courts have made it clear that treaty negotiations, not costly litigation, are the best way to resolve these historic issues.
First nations have said they want to build independent, healthy and productive communities. They need a definitive framework within which their unique culture can flourish, and all British Columbians need the reassurance that positive steps are being taken to end years of indecision.
Treaty settlement issues are complex. There are many voices to be heard and many points of view to be reconciled. Consensus will not be achieved overnight, but the will is there and the government's mandate is clear. We will seek fair, affordable, long-term solutions that serve the rights and reflect the interests of all British Columbians.
Fairness, above all else, will remain the cornerstone of the settlement process. Settlements should recognize the rights, privileges and obligations of all citizens. Privately owned property is not on the table, and the province will not enter into any agreements that place undo financial burden on the taxpayers of British Columbia.
British Columbia has already opened doors that have never been opened before. The establishment of the treaty negotiation advisory group, the signing of a cost-sharing agreement with the federal government and interim measures agreements with first nations throughout the province are significant first steps toward a fair and thoughtful resolution of treaty settlement issues. We are confident that these initiatives will lead to just and lasting solutions that reflect the aspirations of all British Columbians. We will not settle for less.
Fair settlements are in the interests of all British Columbians. With decades of indecision behind us, at last we will be able to look to the future with new confidence and share the benefits that a new era of social stability and economic opportunity will bring. Treaty settlements will create a climate of optimism that will benefit all. They will provide a supportive framework for economic growth that will enrich the lives of aboriginal people in the province. Settlements will end the years of uncertainty surrounding land entitlement. Once these concerns are addressed, many investors who have been waiting in the wings pending the outcome of negotiations will be encouraged. This will mark a new beginning for all of us, confidence will build and a new era of economic certainty can be ushered in.
Over the years, aboriginal people in British Columbia have found themselves increasingly reliant on the community at large for their sustenance and well-being. Today, however, there is increasing awareness among British Columbians of the powerful and growing determination throughout the aboriginal community for change to take place. They want to shed this legacy of dependence and be able, finally, to look to the future with a renewed sense of purpose and of pride. Fair treaty settlements will provide this opportunity. With a revitalized economic base from which to work and a framework in place to encourage self-directed endeavours, aboriginal people will be better able to break the cycle of poverty they have lived with and rebuild their lives in healthier, happier, better-functioning communities.
A treaty is a negotiated government-to-government contract that defines the rights of aboriginal people and formalizes the relationship between first nations and other governments. Today treaties are likely to deal with such sensitive and far-reaching issues as land use and entitlement, wildlife and environmental management, resource-sharing, financial compensation, social development funding and self-government. Modern-day treaties are predicated on the acceptance of first nations status for the province's first inhabitants. This does not imply a special status for aboriginal people. It is a recognition that aboriginal rights on lands occupied by aboriginal people for 12,000 years still exist. Because historically British Columbia has challenged this concept of aboriginal entitlement, the province refused to participate in treaty negotiations between the federal government and first nations. In recent years, however, that position has been reversed and the province has become a supportive and active partner in the negotiation process. I acknowledge the role of the former Minister of Native Affairs, the member from Peace River South, in that regard.
In 1990, after 17 years of non-participation, the province offered to join the federal government in talks with the Nisga'a Tribal Council in the northwest corner of the province. That same year the British Columbia Claims Task Force was established to make recommendations to government on how to negotiate treaties.
In 1991 the new provincial government officially endorsed the recommendations of the task force and recognized the concept of aboriginal rights and self-government. The Premier also signalled to first nations and the federal government the province's willingness to end decades of indifference and share the cost of treaty settlements in British Columbia. Today there is growing optimism that the work of defining once and for all the rights to lands, resources and aboriginal self-government in the province is well and truly underway. More than a century after Confederation, British Columbia remains one of the few places in Canada with treaty settlements unresolved. Today the momentum for change is building. The Delgamuukw ruling of June 25, 1993, confirmed the legality of our obligation to aboriginal peoples and reminded us that the time has come to bring these longstanding issues to a successful conclusion. To continue to evade that responsibility would be a disservice to us all. Although the primary responsibility for treaty agreements lies with the federal authorities, provincial participation will ensure that the interests of all British Columbians are represented.
R. Chisholm: I have three or four questions. I go around the world with these a little bit, hon. minister, so I hope you'll put up with it. They come from the Sto:lo nation, who have a definite interest in what I'm about to address.
The first question is a two-part question in reference to the Forest Sector Strategy Committee and who will represent first nations on these committees. Has that been designated by the ministry? Do you have any involvement in that? What is this ministry doing to help aboriginals with regard to retraining in the forest industry?
Hon. J. Cashore: I assume that when the hon. member asks about the Forest Sector Strategy Committee, he is referring to the forest renewal plan and who will be the aboriginal representatives on the board of that plan. Is that correct?
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R. Chisholm: There are two committees. That is one of my next questions.
Hon. J. Cashore: I'm not sure I'm clear on the entity the hon. member is referring to regarding the board for the forest renewal plan announced a couple of weeks ago. There will be first nations representation. The process of deciding who that will be is now in the area of discussions that will be taking place between leaders of the summit, UBCIC and others to ascertain the best possible representation on the board.
R. Chisholm: The second part of that question is: what is this ministry doing to help aboriginals with regard to retraining in the forest industry?
Hon. J. Cashore: One initiative for retraining in the forest industry is the forest renewal plan. There are other potential initiatives for retraining in the forest industry that relate to the announcement the Minister of Skills, Training and Labour made today about skills for the twenty-first century.
What is the role of this ministry and minister? Again, it's a facilitating role with the line ministry that has primary responsibility. Given that there are five envelopes with the forest renewal plan, one of the things I want to point out is that there isn't a specific envelope relating to first nations. We don't think that would be appropriate. We think that first nations should have access to all those envelopes in seeking access to economic involvement, retraining, community development and value-added. Certainly in the retraining part, that work will be done primarily in conjunction with the Ministry of Forests, since it's in the lead role, but the direction will come from the board that is in the process of being established. It will also include the active involvement, interest and facilitation of the Ministry of Aboriginal Affairs.
The Chair: I wonder, hon. member, if you would take your seat for just a moment. I thought I would take the opportunity to welcome to our deliberations today a group of American university students from Lewis and Clark College in Portland, Oregon. Professor Balmer is with them. I think they've been introduced in the Legislature, and the Speaker was with them earlier today. They're here to learn more about parliamentary democracy, parliamentary government and our system of estimates. So we might want to know they're here and welcome them.
R. Chisholm: The next question is with reference to the justice system. What is the provincial government doing to ensure aboriginal input into the resolution of native justice issues? Specifically, how is the government responding to the recently submitted petition by the Gary Thompson Committee?
Hon. J. Cashore: With regard to the justice system, we are involved in a wide range of ways. As the member knows, it is a primary responsibility of the Ministry of Attorney General. There are issues relating to the justice system that can be mutually agreed upon, such as agenda items of the joint policy tables with the Union of B.C. Indian Chiefs and the First Nations Summit, and the tables we are in the process of establishing with the Metis and the urban aboriginal people. One way in which we have a lead role is in organizing those meetings, which bring together the Premier and six or seven members of cabinet to meet on a government-to-government basis with the leaders of various first nations representative entities. We also hold a close watching brief with regard to the findings, for instance, of the Sarich commission, which dealt with justice and the aboriginal people in the Cariboo-Chilcotin area. That's another area where an issue dealing with the justice system and how that relates to first nations people is something we are watching very closely.
On the item referred to by the hon. member regarding Gary Thompson, I share that concern and would be glad to discuss this further with him. We as a government need to be cognizant of this. It is, again, a primary responsibility within the area of the Ministry of Attorney General. I don't know if it was canvassed at the time. I'm certainly willing to discuss this further with the member, but I don't have primary material on that with me at the present time.
R. Chisholm: I appreciate that you don't have the Gary Thompson Committee material with you. What would be helpful here is knowing how you're going to stay involved in the situation to ensure that we come to some sort of justice for what happened. All we're looking for is a guarantee that you will stay involved and will negotiate with the Attorney General. The estimates of that ministry have been temporarily withdrawn, so we have not been able to get that answer. As you can well imagine, the Sto:lo nation is waiting very impatiently right now to find out exactly what's going to happen.
Hon. J. Cashore: We will maintain a close interest in that issue from the perspective of the Ministry of Aboriginal Affairs. I don't think the word is "negotiate" with the Attorney General, but we certainly will maintain a dialogue with the Attorney General on this. If the member requests it and would find it helpful, I would be very pleased, after giving some time to gathering information, to hold a briefing in my office, at which time we could explore the issue together, hopefully in a way that's valuable to all of us.
R. Chisholm: I thank the minister for his offer, and I'll take you up on that. I would appreciate, too, if I could bring George Campo, chief of the Sto:lo, with me.
Now to the next question these people had for you. What is the government's intention regarding the unextinguished rights of the B.C. aboriginal peoples to Crown lands?
Hon. J. Cashore: We have taken the position that rights have not been extinguished. We recognize that in a time of transition there are going to be issues that will cause concern on the part of first nations people as they see the life of the province carrying on. I know they are concerned about alienation of land held by the Crown, in the case of schools and situations like that. It's very important that we remain in close contact with them, and in this pre-treaty environment we have indicated a process for bridging some of these outstanding issues. But we realize that until we get into the actual settlement of treaties, many of these issues will continue to be difficult.
R. Chisholm: I thank the minister for his openness in these answers.
The last question is: how is the government ensuring that school districts that receive British Columbia funds for native education are communicating with aboriginal peoples before expenditures are made? How are you staying involved in the situation to ensure that the funds are appropriately used in the school system?
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Hon. J. Cashore: I appreciate that question. Yesterday afternoon I referred to the interim protection measures agreement with the Union of B.C. Indian Chiefs -- the double bilateral agreement with federal and provincial governments. Signing on to this process ensures that the enrolment taken at the beginning of the school year determines the formula for federal dollars to click in. Recognizing that a number of first nations children drop out during the year, they have argued that those dollars are being used for non-aboriginal children later on in the year when those students have dropped out. They've argued effectively that it would be better if the dollars were available for kids who have dropped out and suggest trying to identify the real need so that we can deal with the issue of how to get kids back into school -- or how to find an alternate school that would be more suited to their needs. That double bilateral agreement, considered a major accomplishment, has been signed off as a result of the joint policy table with the Union of B.C. Indian Chiefs. I do take the point that we can't stop there, that more needs to be done.
When I was working in the downtown east side, an alternate school for first nations run by the Vancouver School Board was operating out of the First United Church at the corner of Hastings and Gore. Most of the faculty were first nations people and the kids came from homes in the downtown east side area. This was a remarkable accomplishment: aboriginal leadership in teaching and counselling roles working with aboriginal students.
R. Chisholm: I thought it was my last question, but the minister tweaked my interest regarding checks and balances on the moneys that go to school boards and school districts. How are you ensuring that this money is appropriately spent? Are there checks and balances in the system? Is it done through the Education ministry, and are you checking up on this? Just exactly who is controlling?
Hon. J. Cashore: The Minister of Education has recently announced that these funds have to be used for the specified purpose; they cannot be diverted. This relates to what I said a few moments ago about the double bilateral agreement with UBCIC. As far as further checks and balances are concerned, I think that's appropriately a question for the Minister of Education, except to say that yes, you are right: it's my responsibility and my ministry's responsibility to maintain close contact with the ministry on that. It's also our responsibility to realize that we are often the eyes and ears of aboriginal people contacting our office, contacting me and sometimes contacting members of the official opposition and other opposition parties. We certainly want to hear the things we should be hearing about and dealing with.
G. Wilson: I've checked the Hansard Blues very carefully, because it's difficult to be in two places at once, as the minister knows. I don't believe the minister has answered a question that is critical to this set of estimates. It will determine in large measure the amount of money the people of British Columbia, and probably the larger tax base in Canada, are going to have to pay with respect to final settlement on land claims. It reflects in some ways the questions that were raised before lunch by my friend from Peace River South.
Can the minister tell us how one defines aboriginal rights, and how this minister defines aboriginal title? I noticed throughout the Blues that this minister seems to use those words interchangeably. Within the text of legal language, aboriginal rights are quite different than aboriginal title. One can have rights within a country without having title to its land. Yet it seems that those terms are being interchangeably used. I'd like that clarified.
Second, just before lunch this minister said he believed the government is being directed by the courts with respect to self-government. Can the minister tell us what court case he's referring to? On what date and between which parties did a court in British Columbia or the Supreme Court of Canada direct self-government as a proposition for aboriginal title, apart from those aboriginals recognized to have treaties with the government of Canada?
Hon. J. Cashore: On the latter question, the court directed us to negotiate. It's the government's decision that it's best to negotiate on a government-to-government basis. Therefore we have recognized first nations entities on a government-to-government basis in order to follow through on the directive to negotiate, which is something that we have stated all along we have intended to do, whether that was a court imperative or not. Generally speaking, with regard to the question on title and rights -- apart from getting into legal definitions -- title does relate to land. As the hon. member said, rights relate to a variety of situations. As I have said before, I recognize that we disagree on this process, but much of that is to be dealt with in the negotiating context.
G. Wilson: For both the Hansard record and for any who may be listening to what the minister has just said, I hope I can clarify this point. The minister has recognized that there is no court in the province or in Canada that has acknowledged the right to aboriginal title tied to self-government. That is not something the court has determined. The court has simply said it cannot determine that, or has said the right does not exist. Therefore, if it is the proposition of government to do it, then it is a political decision taken by the government of the province to negotiate on a government-to-government basis. No fact in law says that said governments now exist to the extent that they are entering into those kinds of agreements.
If that is correct, and if the minister can acknowledge it, then I would move to a point raised by the member for Peace River South just before lunch, which is critical, in my judgment, to the whole CORE process. That's where I'm going with these questions.
Through the BNA Act, the federal government has a legal, fiduciary obligation to aboriginal peoples in Canada -- rightly or wrongly. That's the history of this country. Given they have a fiduciary obligation, how is it possible that they can now negotiate on behalf of all Canadians? Given the fact the minister has already agreed that it is a political decision to acknowledge government-to-government relationships, how can he tell us that he now has the interests of all British Columbians at heart when negotiation on that question occurs from a provincial perspective? If it's government to government, that would surely imply there is an acknowledgement that people elected to the Legislative Assembly have as their first order of business the legislative protection, management and maintenance of non-aboriginal people, because there is a recognized government that is going to be doing the same for aboriginal people. This runs counter to the Charter of Rights and Freedoms in the Canadian constitution. If that can be clarified, I think you'll clarify confusion in the minds of many British Columbians.
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Hon. J. Cashore: It's beyond my capability to clarify any confusion that exists in the hon. member's mind, but I can say a bit more about aboriginal rights and aboriginal title. Aboriginal rights means the freedom to use and occupy traditional lands and resources to maintain a traditional aboriginal lifestyle. Aboriginal rights are protected in the Constitution Act of 1982. Aboriginal title is a unique interest in land and resources based on ancestral occupation and use.
Hon. Chair, I would like to take this opportunity to acknowledge Don Balmer and his students. It's good to see you. I've met with many of the classes which have come to British Columbia with Don, and I regret that in the last couple of years I haven't been available when your class has been here. I'm delighted that you can sit in on this debate.
The Crown has a right to enter into treaties. Given the distribution of powers outlined in the Canadian constitution, a range of matters under provincial jurisdiction will be discussed in treaty negotiations, including self-government issues. Canada has the exclusive constitutional authority for "Indians, and Lands reserved for the Indians" under section 91(24) of the constitution.
At the same time, the province has the constitutional authority to enter into arrangements with respect to subjects within provincial legislative competence. Provincial areas of legislative competence are primarily set out in section 92 of the constitution. These include: section 92(5), "The Management and Sale of the Public Lands belonging to the Province and of the Timber and Wood thereon"; section 92(13), "Property and Civil Rights in the Province"; and section 92(16), "Generally all Matters of a merely local or private Nature in the Province." Section 92A(1) states that:
"In each province, the legislature may exclusively make laws in relation to (a) exploration for non-renewable natural resources in the province; (b) development, conservation and management of non-renewable natural resources and forestry resources in the province, including laws in relation to the rate of primary production therefrom; and (c) development, conservation and management of sites and facilities in the province for the generation and production of electrical energy."
There are unextinguished aboriginal rights and titles in the province. The courts have made it clear that it is incumbent upon the provincial government to negotiate constitutionally protected aboriginal rights with first nations. The province is also legally obligated to ensure that it does not unjustifiably infringe on these rights.
In addition, section 35(1) of the Constitution Act, 1982, provides that "The existing aboriginal and treaty rights of the aboriginal peoples of Canada are hereby recognized and affirmed." Section 35(3) states that, for greater certainty, in subsection (1) 'treaty rights' includes rights that now exist by way of land claims agreements or may be so acquired." Although Canada has exclusive jurisdiction for "Indians, and Lands reserved for the Indians," many of the components of treaties or claim settlements are matters of provincial jurisdiction, such as lands and resources.
As a result of this overlapping jurisdiction, the federal government cannot conclude comprehensive treaties without the involvement of the provincial government. To achieve certainty with respect to lands and resources, it is in the province's interest to participate in these treaty negotiations. Arguably, the province could take the position that it would not enter treaty negotiations. The result of such a decision would likely be substantial dislocation and uncertainty in the resource industry, which could have severe ramifications throughout the province. While the province has the legal authority to enter into treaty negotiations, the imperative for us to participate in negotiations goes beyond the simple legal fact. This government believes that the province must be at the table to ensure that the interests of all British Columbians are taken into account and to ensure that matters under provincial jurisdiction or affecting the province's jurisdiction are taken into account.
G. Wilson: I wonder if the minister would let us know what document he was reading from and what the authority of that document is.
Hon. J. Cashore: I was reading from a document prepared by the Ministry of Aboriginal Affairs in consultation with the Ministry of Attorney General entitled "Legal Authority to Negotiate Treaties Including Self-Government."
The authorities were cited in the statement where I referred to section 92 of the Constitution Act. Also, I referred to section 35 of the Constitution Act, 1982.
G. Wilson: I just wanted to clarify that that was an internal government memo, and that it wasn't something from an objective analysis by some independent third party.
Having said that, I'd like to move to CORE and the aspect of the land set aside in CORE. I've gone through Hansard to make sure I'm not being repetitive here, because I know that everybody's time is somewhat precious. I noticed the comments that were made -- most specifically by the member for Surrey-White Rock and also by the member for Richmond-Steveston -- with respect to this provision.
The one aspect of CORE that I think ties into the line of questioning that we've been directing has to do with the term "without prejudice," which this minister has acknowledged in the Blues. We don't need to go back through that. Also, there is the proposition in CORE for a 12 percent set-aside and that if, within that 12 percent, it is deemed in the interests of aboriginal people that that land be logged, then logging won't be prohibited and we'll find an additional 12 percent to set aside for non-aboriginal participants in the industry. Can the minister comment on that? As the minister knows, CORE and the Vancouver Island land strategy -- that's what I'm referring to here -- have created a great deal of uncertainty in the minds of many people on Vancouver Island whose livelihoods depend on the forest industry.
When I took this up in a meeting with Mr. Owen and specifically asked him what that set-aside provision meant, and if that set-aside might in fact undergo logging if it falls under aboriginal jurisdiction, his comment was that the question should more properly be directed to the Minister of Aboriginal Affairs. This is my first opportunity to do so. I wonder if he could clarify.
Hon. J. Cashore: First of all, land has not been set aside in CORE. The government has yet to respond to the CORE recommendations. I do take the question as asking: whatever that response may be, how will the question pertain in that instance? A good example, I think, is that it was possible to reach an accommodation with the Clayoquot interim measures agreement. This came through with a process that, at least in the interim, recognizes the Clayoquot land use announcement. There was an interim measures agreement that has certain factors built into it to enable the recognition of that decision. It's going to be a function of the negotiations process to deal with the "without prejudice" aspect of these various land use decisions. As I pointed out yesterday, the "without prejudice" designation is not without problems; I
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say that very openly. It depends on a lot of political will on behalf of government, first nations and the public to enable it to work.
G. Wilson: I agree that there's going to be a lot of goodwill needed by the people of British Columbia to see this thing through.
Notwithstanding that there is no final acceptance of CORE and the Vancouver Island land strategy, my concern is the problem -- if the minister could direct his attention more specifically to this particular issue -- of the 12 percent of land recommended to be set aside. There are additional recommendations with respect to limited-action logging or logging with practices that will have to have pre-approval before moving forward, and an acknowledgement that if the lands outside the harvestable areas fall into aboriginal jurisdiction, it will be determined largely by the aboriginal peoples whether or not the land will undergo logging activity.
There are two specific questions then, and I think I have it absolutely clear because I spent some time with Mr. Owen to make sure I had it clear. If we have already set aside 12 percent, with an additional percentage of land that is going to be under specific logging practice approval, and within that 12 percent, logging activity is deemed to be okay by aboriginal people who have title to it or acquire title through negotiation, what guarantee do we have that additional land will be made available for forest companies and people whose livelihood is dependent on it, who will find that they are going to have to give up a greater share of the allocated timber under licence to provide for an additional amount of land being set aside to protect the renewable status of the forest? That's the first thing. What guarantees will there be for non-aboriginal loggers that they are going to be able to maintain the supply of timber?
Secondly, with respect to the joint stewardship agreements, what role will the government play in determining forest practices on lands that will be negotiated and fall under aboriginal jurisdiction -- given that there is a Forest Practices Act pending in the province, which we've all seen, that makes it very specific that it will not apply to lands that will essentially be under the jurisdiction of aboriginal people?
Hon. J. Cashore: Number one, given the hypothetical situation, assuming that.... It is hypothetical in the sense that you assume that through negotiations there is an acquisition of an area that is now deemed a protected area. That's hypothetical in that the negotiations that would result in that haven't taken place yet. The hon. member did refer to a hypothetical situation, an assumption that negotiations have led to the designation of that 12 percent set-aside area.
First of all, it's very complex; I recognize that. One factor in those negotiations would be the different ways of looking at that, such as traditional food gathering. For instance, we have interim measures agreements now that deal with protected areas, in which some relatively non-intrusive traditional activities are factored in that enable it to remain as a protected area by mutual consent, but where there are some activities going on that are not exactly what you would find with a typical class A park situation. That's one possibility: when you get into addressing what may be part of a protected area in a land claim settlement, it could also be a subject of the negotiations what that would be in the final analysis. That could range, I guess, all the way from "control of" to something that is addressed on a partnership basis between the two entities -- the provincial government and the first nations government.
In that sense, I see these as very hypothetical situations, in which we're trying to get a sense of how something would apply in various instances. The fact is that the government has made a commitment to have 12 percent of the province in protected areas. If that had to be dealt with as part of the outcome of treaty negotiations, then it would have to be. But I can also say that it would be the role of the provincial government negotiators to do their very best to carry through a decision that had been made in ways that, to the greatest extent possible, could be arrived at by mutual consent.
G. Wilson: Notwithstanding the fact that the completion and the terms of any completed negotiation are hypothetical -- and I'll yield to that -- the fact that the land is under claim is not hypothetical; that's known. The fact that negotiations are in the process of commencing through the Treaty Commission is not hypothetical; that's known. The fact that this government is committed to government-to-government negotiation on those lands is not hypothetical; that is known. So I think it is not unreasonable to recognize that there is going to be a final settlement on those lands.
Yet the problem we have is that not only do the people of British Columbia have the proposition of a Forest Practices Act that is going to provide regulations regarding operations other than aboriginal operations, we also have CORE, which is setting aside lands that are without prejudice to aboriginal lands and therefore will affect only non-aboriginal people in British Columbia. We also have a heritage act before the House right now, which is going to receive some scrutiny at committee stage, and which is going to allow for the identification of heritage sites that will apply to both aboriginal and non-aboriginal artifacts, sites or lands and, as well, is going to provide an opportunity to have additional set-asides put in place through a negotiation process.
I have one question specifically to the minister, and then I'll yield to my friend from Peace River South. The minister has not given any assurance that once that process is in place and that negotiation is completed, land that presumably has been set aside -- because CORE and those working on the propositions of CORE have determined that those lands should be set aside for sound ecological land use issues -- are not going to be subject to logging when the very same land was denied to non-aboriginal companies and operators seeking to log them.
What assurances can the minister give us today that the policy embarked on by his ministry and by his government is going to give approval for the use of lands that are set aside? Will this government be empowered to say: "No, you can't do that in that land, notwithstanding that you may have title or aboriginal claim or third-order-of-government status over it"?
Hon. J. Cashore: It's important to say at the outset that first nations have an interest in protecting what is implicit in those values protected by the Forest Practices Code and the protected areas strategy. When talking about the Forest Practices Code, we have to be careful, because we're talking future policy here. My answer is -- and continues to be -- that we will be conducting these negotiations in a way that protects the interests of the province.
We believe that to a great extent -- and I think it should be acknowledged on the part of all members of this House -- the interests represented and the values implicit within the Forest Practices Code, within treaty negotiations and those
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relating to protected areas will be brought to the table. Some things may need to be adjusted as a result of treaty negotiations -- no one has ever pretended that's not the case -- but that's as much as I will say.
J. Weisgerber: Before lunch I invited the minister to share with us his vision for land claims settlement and to give us a sense of what he, his ministry and his negotiators were seeking to achieve in negotiations. I've asked this question a couple of times. Earlier in the week I invited the minister to share that vision and to give us a sense of direction at negotiations. Essentially we've heard from the minister: "Trust me. I'm not going to tell you anything. I'm here to assure you that we're negotiating in the best interests of British Columbians, and that's all you're going to get."
I hope that on reflection the minister will realize that this is one of the most significant public issues facing British Columbia today. Why would he expect British Columbians to simply trust the government on this issue, when they want to know more details of government transactions and government plans? Perhaps the minister will realize that British Columbians aren't content simply to hear: "Trust us, we're negotiating on your behalf; I can't give you any of the details." I hope the minister will take whatever time he needs to share with us the outcome he hopes to achieve in terms of land use issues, of taxation, of existing treaty rights and of access to wildlife. Will the minister give us a picture, or at least assure us that he has one? One has the uncomfortable feeling that perhaps there is no vision and that perhaps there are folks negotiating, hoping to come out of this without too much damage. I'm going to give the minister one more opportunity. Failing that, we will try to get some answers by addressing these issues one by one.
Hon. J. Cashore: I'd like to ask the Page to come and take a copy of the vision statement I gave at the beginning of today's session to the hon. member.
The Chair: Shall vote 9 pass?
Some Hon. Members: Aye.
J. Weisgerber: I recognize the anxiousness of the committee to rise and report conclusion. However, to expect me to read a vision statement and speak at the same time stretches even my perception of my abilities. So I'll ignore the vision statement and carry on with the questioning, seeing there doesn't appear to be any other way of achieving it. Now that the hon. minister has a vision statement, perhaps he will be kind enough to answer my questions, because he'll be able to quote specifics that I wasn't able to read.
Perhaps the minister can tell us -- coming out of, for example, the Nisga'a land claims negotiations -- the kinds of land tenure the minister envisions. We know there are reserve lands now. We understand the powers of the federal government and the lack of powers of the provincial government in respect to those lands. We understand also the limitations on aboriginal people regarding their own reserve lands. I'm sure the minister understands the complex combinations in the series of land tenures coming out of the Alaska, Yukon and Northwest Territories settlements. Perhaps the minister will at least give us a peek behind the curtain and tell us what kinds of land tenures the government of British Columbia proposes will exist at the conclusion of the first and subsequent land claims settlements. We assume they will be a model.
Hon. J. Cashore: Given the confidentiality of the negotiations among the three parties to the Nisga'a agreement, I am going to ask staff to do some work on a response. Some aspects of the ongoing negotiations should not be part of this debate; they should be the work done as we advance our mandates at the treaty negotiation table. So I will come back with something on that later this afternoon.
J. Weisgerber: I'm not sure I understood exactly what the minister said. He started by saying that because of the confidentiality of land claims negotiations, he wasn't going to give any information, and then he wound up saying he'd bring something later this afternoon. I suspect that I'll get the same answer on a number of questions. I'm not asking for any quantum, quantities or amounts. I'm simply asking for a sense of the direction this government is taking on behalf of British Columbians in one of the most important and complex issues facing our society today. I can't buy the argument for a moment that the minister can't tell us what types of land tenures he envisions coming out of land claims settlements because those are protected by confidentiality. With all due respect, that is absolute nonsense. I signed the agreement that got the province involved in the Nisga'a negotiations; I know what the confidentiality agreement says. I can assure the members of this committee that there is absolutely nothing in that agreement that would prevent or inhibit the minister talking about the kinds of land tenures that he envisions flowing out of land claims settlements. Having taken the minister's word that he's coming back later this afternoon, I will be waiting to hear the answer to that question.
I will move forward, then, to ask the minister to talk to us in much the same vein about the taxation models that he sees flowing from these settlements. We know that aboriginal people are exempt from paying federal and provincial taxes for goods and services purchased on reserve. That's a longstanding position. We also know, because I was involved with it back in 1988 and 1989, that aboriginal people now have the right to tax non-Indian occupiers of reserve land. Those are givens. I assume that the minister sees coming out of these negotiations some changes in the tax relationship between aboriginal people, the provincial government -- and the federal government, I assume, but I'm not nearly as concerned with that as with the province. What kinds of tax models is the minister pursuing? For example, does the minister perceive that following land claims negotiations, aboriginal communities and individual members will be integrated into the provincial tax regimes -- income taxes, sales taxes and other styles of taxes? Perhaps the minister would be good enough to give us a general sense of direction, not quantities or amounts, in the area of taxation.
Hon. J. Cashore: We've had a very full debate on the subject of taxation earlier in these estimates. I have answered those questions, and I don't propose to answer them again. I have said that there will not be double taxation. There is a process in existence now having to do with a taxation agreement. It involves a property tax and allows the province, through the enabling act, to withdraw from the field so that there won't be double taxation, and it also involves service agreements. I think the hon. member knows that it's working very well. When he sees how well it's working, that's a good indicator of the kinds of agreements that are negotiated in the interests of all in the treaty negotiation process. He's fully aware of that; we've canvassed that issue. I recognize that he's not able to be in this chamber at all times, but I think the hon. member
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recognizes -- although he won't say so out loud -- that when he was in this position, he would have handled it in exactly the same way. He also knows that it is foolish and that he's not being really helpful in suggesting that we get into an area we should not be negotiating in this forum at this time. That's not in the interests of the province.
I would like to suggest to the hon. member that he make up his mailings to his newfound constituents of the Reform agenda, let them know his positions on these topics and mail them out with a covering letter saying he wasn't satisfied with what the minister had to say. I encourage you to do that, hon. member. In the meantime, I have certain constituents who would like to see copies of what this member has said during these debates as well. I'll be mailing them out to those people, because I believe they have a right to hear what this member has had to say on some of these topics.
With regard to the Nisga'a question a little while ago, some of the issues dealing with the subject of the negotiation relating to land are: parks and protected areas, subsurface resources, gravel, forests, water rights, submerged land, islands, navigable water, wildlife, access involving roads and recreation, environmental assessment and protection, infrastructure improvements and other economic issues. That's a range of the land-related topics that are at the negotiation table and in active negotiation.
J. Weisgerber: I'm never sure whether the minister deliberately misunderstands or simply chooses to answer the question he wishes we had asked rather than the one we did. His description of the various types of land is hardly a response to a genuine question about the type of tenure the minister might anticipate coming out of land claims negotiations. I don't know how I can make it any simpler.
The minister chooses to trivialize these questions by suggesting they are designed for a mailer. I can assure you that this issue goes far deeper in this province than any political party's next mailer, although I expect that it will certainly not go unnoticed by those who read Hansard that we've been here for about two and a half days without ever getting an answer. One also seeks to appreciate why we're in this committee discussing these debates rather than in the Legislature, where the televised debates might give broader coverage to these questions and answers. I suspect that I'm not going to get any answers, but I will ask the questions nonetheless, because I think they are important questions to ask.
Recognizing that I've received no answers on tenures or taxation, let me carry on to ask the minister what he anticipates will happen, through negotiations, with existing rights for aboriginal people with status? Does he anticipate any change in the rights for status people coming out of negotiations? Are all the issues on the table on both sides? Is there discussion about whether all the benefits aboriginal people now receive through the Department of Indian Affairs and Northern Development are up for debate, or whether they are simply assumed to move forward with a new settlement? I'm sure the minister wouldn't break any confidentiality by sharing that with us.
Hon. J. Cashore: The Minister of Indian Affairs and Northern Development has embarked on a consultation process on the issue of self-government. The issue of benefits has been widely discussed in that context, because there's a great deal of interest in whether there's a hidden agenda to be off-loading onto the province or onto first nations as part of the process. Do we anticipate a change? I don't anticipate agreeing to change if that means an off-loading onto the province. The traditional responsibilities of the federal government should remain intact in this process.
On the taxation question, there has been a working group meeting to address the taxation issue with regard to the Nisga'a. Some of the issues the working group is addressing include property taxation, transaction taxes, personal and corporate income tax, estate succession and personal capital taxes, payroll corporate capital taxes and taxes on trusts. That's the range of issues our working group has been discussing as part of the background work toward preparing mandates for negotiations. We are at a very early stage in discussing these issues in the context of treaty negotiations.
J. Weisgerber: I appreciate the answer in that it sheds some light on taxation. We don't have any sense at all of what position our negotiators might be taking on these issues, but at least we have the satisfaction of knowing what some of the topics are.
The question of existing rights is under review by the Minister of Indian Affairs and Northern Development; that's quite widely known. The question I had was whether or not any of these rights might be the subject of negotiations in a specific land claims process. Only British Columbia and a fringe of other areas are still negotiating treaties; other bands have already established treaties. I'm curious -- and I think it's important to know -- as to whether or not there are anticipated variations of those rights as part of the British Columbia treaty negotiation process. The minister has been so forthcoming; perhaps he would clarify that.
Hon. J. Cashore: The province is fully aware of the importance of anticipating that. I think I made that very clear when I referred to it several times in this debate. I referred to this in virtually every session of the debate that we've had with regard to this concern for federal off-loading. It's very important that the province anticipates that and ensures that the interests of the province and first nations within the province are put forward in such a way that there isn't a Trojan horse in this process, which is really a means of federal off-loading of expenses onto the province. We recognize that.
The hon. member is fully aware from his experience that any party to a negotiation can put a topic onto the table. If that's in the interests of the federal government, I'm sure they would do so. I fully anticipate that that topic will be at the negotiating table.
J. Weisgerber: I have just one last question, I hope, in that respect. My concern is not so much a question of whether the federal government might or might not be off-loading. If we assume that first nations will have additional resources -- perhaps significant additional resources -- as a result of land claim settlements and treaty negotiations, are all the existing benefits still warranted? I think that's a question that, as taxpayers of both British Columbia and Canada, many of us would like to know the answer to. Do we anticipate maintaining the full tax-funded benefits that now exist in addition to significant resource benefits and land use benefits that might flow from a treaty negotiation?
Hon. J. Cashore: With regard to rights and benefits, we see those as being the same as for other Canadians.
With regard to negotiating any changes, that remains a subject of the negotiations.
J. Weisgerber: The minister says he views those rights as being the same as all other Canadians have; clearly that's not
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the case. The minister knows, I know and everybody in this chamber knows that aboriginal people have special rights under the Canadian system, which are transferred to anyone of status, whether they are covered by a treaty or not. The question was whether or not it would continue to be appropriate, in the minister's estimation, for taxpayers to provide the same unique benefits to aboriginal people as now exist, and at their existing levels.
Hon. J. Cashore: The hon. member refers to special rights. Is he referring to a special right to unconscionable unemployment? A special right to poverty? A special right to communities that are dysfunctional? These are the issues we're seeking to address by negotiating in a climate of certainty to bring about a new future that's in the interests of all British Columbians and all Canadians, and that includes first nations people.
I think that, at the end of the day, we're trying to achieve something that's going to bring about an honourable relationship and a future with regard to first nations people that will be far better than what we've seen in the past. I would also say -- and I think it's sad -- that it almost appears that the kinds of economic opportunities that are available to first nations people are too often in gambling and tobacco sales and sometimes in storing toxic waste on Indian reserves. It's really tragic that, after all these years, these people have not become a mainstream part of the economy. We want to achieve that. The negotiating process would contribute to that achievement. Certainly that is what we're trying to achieve.
J. Weisgerber: Surely, as much as everyone in this chamber recognizes the special status that aboriginal people have in this country, they also recognize the unique difficulties faced by the aboriginal community. A fundamental understanding of those difficulties convinced me of the need to negotiate land claims and treaty settlements in British Columbia. I don't need to be reminded of -- nor did I ever suggest that there weren't -- significant difficulties facing the aboriginal people. However, if the minister doesn't also understand that aboriginal people have benefits not available to other Canadians, then he's derelict in the work he does as Minister of Aboriginal Affairs. Surely to goodness the minister understands that special treaty rights have been extended to aboriginal people in British Columbia and across this country. If the minister doesn't understand that, then we've got a lot further to go in these estimates than I had thought. Assuming that the minister understands that aboriginal people have special rights in relation to taxation, advanced education and a number of other benefits, then we could -- if he will acknowledge that -- move on to discussing whether or not it is going to be possible, through the new benefits acquired by aboriginal people, to modify some of those historical benefits.
Hon. J. Cashore: The fact is that other Canadians have benefits that aren't available to aboriginal people. I think that....
An Hon. Member: Such as what?
Hon. J. Cashore: What rights do other Canadians have that are not available to aboriginal people? All we have to do is take a look at the employment statistics, at the people who are in university and at the infant mortality rate. I don't think it takes a rocket scientist to see that there's an incredible imbalance in the rights, privileges and benefits of different people in society. It's very clear where this hon. member is going with the nature of the debate. I recognize what he's trying to do here.
However, the high ground on this issue is to identify ways in which we can make the treaty negotiation process work to ensure a future that is far better than what we've seen in the past. In order to do that, we need to recognize, if it comes down to a balancing act -- a teeter-totter.... Who has the best rights and benefits over here and who has the best rights and benefits over there is not what it's all about, hon. member. It's about coming together in a negotiation process to work on developing a new and honourable relationship. In that process a number of issues and topics need to be brought to the table and addressed in that context.
J. Weisgerber: Believe it or not, that's what we've been trying to get a sense of for some time now. The purpose of a whole series of questions was to get more than simply the minister's assurances, in the rather vague and unspecific way that he has been giving them. We're trying to get some specifics; we're trying to get some sense. The minister has apparently made up his mind that he's not going to give it, and so we go round and round.
At the risk of asking a question which the minister will believe he's answered before, I think the same kinds of questions that relate to the use of and access to wildlife on and off lands that might fall under aboriginal jurisdiction after settlement are questions to which I haven't heard the answers. I've heard a lot of discussion in the committee about the various kinds of debates and issues surrounding the use of wildlife in our system today.
The question -- just so the minister doesn't get grumpy about this -- is to try to get a sense of what the minister perceives will be the new relationship between aboriginal and non-aboriginal users of outdoor recreational opportunities and wildlife values following settlement. I don't know, perhaps that is too much to ask. Perhaps the minister will answer.
Hon. J. Cashore: Just repeat it; I missed the last words of it.
J. Weisgerber: The sense that I was trying to get from the minister is: following negotiations and the settlement of claims, what rights does he perceive aboriginal people will have on those areas excluded from settlements, assuming it was certain what Crown lands were not part of the settlement? What kinds of rights and what kinds of special access to wildlife and fish and other natural resources does the minister foresee in areas outside of the settlement lands?
Hon. J. Cashore: As I've said before, I'll feel really good when we get the agreement in principle with the Nisga'a, because I think it will give a really good sense of how some of these things can be resolved.
It's really exciting to see the kinds of possibilities that are being discussed in the negotiations. Those possibilities do not always involve some kind of line of demarcation or that we put up some kind of moat, and on one side is all one kind of jurisdiction and on the other is all another kind of jurisdiction, and never the twain shall meet. It is evident within the negotiations that it's in the interests of the parties to look at creative ways to dovetail our interests, to have economies of scale and to recognize that, in very many instances, all three parties agree on goals, vision and how those things can be addressed cooperatively.
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I won't go beyond that, but when it comes to dealing with the member's specific question, I think that is the kind of issue where there are real opportunities for a shared approach on much of what is under discussion, both in terms of land and in terms of other issues.
G. Wilson: I'm going to resist the temptation to go back to the minister's statement, with respect to special rights and the question of poverty and access to education and what have you. It clearly demonstrates that this minister doesn't understand what the members on this side of the table are asking with respect to the negotiation of rights versus the difference on that and treaty.... I would hope that everybody in this elected assembly believes that equal access to education, equal access to health care, equal access to a justice system that looks after people on an equal basis and equal access to a social safety net for people regardless of race, colour, creed and language are all things that are desirable in this country. There isn't anybody who doesn't recognize the indiscretions committed against aboriginal people in the past. We want to try to address that.
But to hide behind that recognition is outrageous when we're embarking on a fundamentally different approach to citizenship in this country, before the acknowledgement of individual and equal rights in this country, before we acknowledge the fact that there is a distinct difference between communal rights and individual rights and between the way aboriginal people have traditionally governed themselves and the way Canadians have traditionally governed themselves. There are very real differences between the interests and protection of collective rights under aboriginal jurisdiction and the individual rights of people within a tradition of parliamentary governance. It's a little difficult when we see the Nisga'a model being touted as the one that will be the framework, although this minister said it won't be a cookie-cutter -- I think that's the term he used, if I read Hansard properly.
We've negotiated the first aboriginal self-government in Canada that has settled their specific claim, that has jumped through all the hoops with respect to the provisions of the comprehensive claim, that has tried hard to have that comprehensive claim heard, dealt with and negotiated, and that has a pretty finite figure attached to it -- unlike the minister, who's not even prepared to give a guesstimate of the finite figure. I refer, of course, to the Sechelt. The Sechelt can't be heard because this minister advocates that they try to work within the Treaty Commission process, which was not available to them when they went through their original assessment of self-government, when they had the Sechelt Indian government act set up or when they did all the amending of provincial and federal statutes to get them as far as they are.
It rings a little hollow. Could the minister tell me, specific to the Sechelt -- and I know that the minister's staff have been working on this with them -- why this government isn't prepared to immediately embark upon the settlement of that particular claim, given that the Sechelt have opted for a municipal model of government that clearly falls within the statutes of the federal and provincial governments? They've already acknowledged and put in writing -- and I believe they're the only band in this province that has done so -- what their comprehensive claim is. Why does this government not swiftly move forward and negotiate a successful conclusion to that particular claim?
Hon. J. Cashore: I enjoyed the hospitality of the Sechelt people recently when I visited Sechelt along with Randy Brant, ADM, of the aboriginal relations division. Certainly there's a great deal of frustration on the part of the Sechelt people, which goes back more than 20 years, with regard to an unresolved issue concerning a utility corridor. I don't deny -- and I never have denied -- their understandable right to be frustrated by years of intransigence on the part of government on this issue. I also recognize that they tied that issue to the claim negotiation.
I thank the hon. member for his role in ensuring that this issue is addressed. The fact is, as the hon. member is aware, that I've assigned an assistant deputy minister to work on this and keep me well informed on how it's going. We had a very cordial meeting several weeks ago. I believe that as a result of that meeting, there has been reassurance with regard to the process and with regard to moving forward. There had been, prior to that time, some very real movement on the part of the line ministries that have a responsibility with regard to the utility corridor issue.
I recognize the concern about the Treaty Commission. It's simply that there is an issue around the cost-sharing agreement that involves the federal government, which could help to facilitate some aspects of that concern. I think that's a fair issue to be discussing. I do acknowledge, however, that the issue with the Sechelt is pressing and important. I don't have feelings of guilt about my role in this issue, because I'm dealing with this one among the issues with 197 other bands in the province. I am also seeking to represent the concerns of all British Columbians involving the wide range of issues we are dealing with in treaty settlements, interim measures and so forth. This one, with the hon. member's help, certainly does have my attention. It is an important issue, and we are making progress on it.
G. Wilson: Why specifically will this minister not allow a parallel process to take place that would allow the advancement and completion of this negotiation, given that everything is done, save and except the governments coming together? Can the minister tell us if it's a fact that they're going to have to come up with some cash that this minister doesn't have, hasn't budgeted for and hasn't estimated in this set of estimates? Is that the reason why we're not negotiating it?
Hon. J. Cashore: There are certain sensitive aspects to this that come out of discussions I've had with the people, and they involve discussions I'm having with the federal minister. Some of these discussions, relating to the cost-sharing aspect, will be taking place next week. I won't say anything more than that at the present time, but I will be talking to the federal minister about this next week.
G. Wilson: That's encouraging to know, assuming that there are some positive negotiations.
Can the minister tell us where within this set of estimates the moneys would be assigned for the provincial share of such a settlement? I heard another hon. member say he has a couple that want to jump the queue, too. I point out that the Sechelt were the very first to have negotiated self-government successfully. They have finished their specific claim and have been operating well as a self-governing entity in relation to the district municipality of Sechelt and the regional district. If I can use the term, they are "a good citizen" in terms of the overall development of the Sunshine Coast. But where specifically in this set of estimates would the moneys be available for the provincial share? I am assuming it is 17 percent, if that's the margin we've agreed on. Where would it show up here?
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Hon. J. Cashore: Settlement costs are not in the budget this year; therefore they are not in this set of estimates. We have stated that the government is going to balance the budget and that there will not be a deficit by 1996. Every program of government, no matter in which ministry, falls within that financial guideline, and that has to be factored in regarding any kind of settlement costs that may be involved within that period of time. The very question the hon. member asks underlines the importance of my discussions with the federal minister. Given the cost-sharing formula we have with the federal government, I think there would be a beneficial approach for the province within that formula. I have stated openly that the federal-provincial cost-sharing agreement is a formula that needs to apply in instances like this.
G. Wilson: Is the minister saying that there will be no completion of negotiations before 1996 because it might impact on the government's desire for a balanced budget?
Hon. J. Cashore: No, I didn't say that.
G. Wilson: Can the minister tell us what the significance is of the government's desire to balance its budget by 1996? Why would they not estimate the provincial share of the budget...? They haven't put it in this set of estimates; we've heard that. Why would the minister not determine this to be an ongoing line within his ministerial estimates so that he can effectively complete negotiations, and the people of British Columbia might get a handle on what the costs are going to be?
Hon. J. Cashore: The negotiation phase is within the estimates of this year; the settlement phase is not within the estimates of this year. When it will show up is a matter of future policy, but I have stated that the fact that we have to balance our budget by 1996 does not in any way preclude the possibility of settlement costs being in that budget.
G. Wilson: That's interesting news. We anxiously wait to see what that line is.
We notice, however, that settlement costs in this line show an increase over last year in salaries and benefits in terms of the treaty negotiations of about 40 percent -- some 46 FTEs. Clearly this is an expensive proposition, which presumably this government is committed to coming to resolution on right away. Can the minister tell us, in terms of the increase of that 40 percent and the 46 FTEs, which negotiations he anticipates will be prepared for completion this year and resolution next year?
Hon. J. Cashore: I think the hon. member, when he said 40 percent, was referring to the.... I don't have the line item in front of me -- we can find it -- but I think he was referring to the line item for staffing up the negotiating teams. The hon. member is nodding.
The intent is to staff up four of those teams within this fiscal year, and we envisage six teams within a year and a half. We have recently concluded the negotiations with regard to the funding arrangements, and we are now into the manageability negotiations. This is the area where we will be determining the answer to the question of which negotiations will be negotiated first.
We can very openly say that we recognize the economies of scale and certain logic in a regional approach. For instance, if there is a region of the province where there's one linguistic grouping, such as the Nuu-chah-nulth, and coming out of that area.... Well, this is what does come out of that area. There's a statement of claim filed by the Nuu-chah-nulth Tribal Council, but there are also statements of claim filed by three of the bands of the Nuu-chah-nulth Tribal Council: the Ditidaht, the Kyuquot and the Mowachaht. We think it's possible that a mutuality of approach would recognize that we would look upon that as one generic claim. But at a certain point after the framework agreement has been decided and certain other processes have been concluded, then we could get into the specificity of some of those particular claims.
What I'm saying is that right now we have over 40 statements of intent, and I believe that 36 have been found to be complete. Obviously we don't want to be negotiating 36 claims; if we are going to, it's going to take far too long. That's one example of how taking a regional approach could assist with the manageability issue, which is presently being negotiated involving the principals: the federal government, the provincial government and the summit.
G. Wilson: I have a whole series of questions that are specific to my riding. As this minister would know, my riding extends from Langdale almost to Bella Coola and includes a significant number of aboriginal communities in coastal British Columbia. I have two more general areas I would like to canvass. Other members may wish to get into the generalities before I get into the specifics.
A. Warnke: Go ahead.
G. Wilson: That's great; I appreciate that.
Could the minister tell us how he responds with respect to the proposition for this land claims negotiation? The minister knows that I have brought this to his attention, and he responded in his letter of May 2. There are those who would argue that what's taking place in the province is not going to provide any guarantees for aboriginal people other than the fact that it will guarantee, in effect, that in the completion of negotiations you've transferred governance from what is perceived to be a non-aboriginal elite to an aboriginal elite within Canada. These charges are being made by aboriginal people, not by me.
What's really needed is some method for this government to undertake some obligation or responsibility on behalf of aboriginal people, given that they are negotiating with first nations, but not all members of first nations. There is a need for an ombudsperson or an ombudsman -- I'm not sure what the new politically correct term is -- who would look after their interests and is able to take issue with the fact that these elites are governing aboriginal people. I'll draw the minister's attention in a few minutes to some of the specifics.
In his response on May 2, the minister suggested that the provincial ombudsman is a free and independent resource to any British Columbian who has a complaint. This is a rather strange approach, because many resources are open and free to any British Columbian; yet we have within this ministry all kinds of services that are specific to aboriginal people. I wonder why that is, given that we are moving toward the transfer of enormous amounts of power and authority. The transfer of authority is going to determine regional economies to which aboriginal people are going to be subjected.
I question why there is not some concern demonstrated by this government to make sure that the governance that we're putting in place, or the third order that we are negotiating with, is an accurate reflection of the wishes and desires of the majority of the people. Could the minister
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tell us why he does not think that an independent agent can look after the interests of non-status, Metis and other aboriginal people who may see themselves out of the loop of power, if I can use that term, and why he won't move to have that position created?
Hon. J. Cashore: Issues dealing with the application of administrative fairness are dealt with through the office of the ombudsman. I've said many times that this ministry does not set up that kind of institution on behalf of first nations people, and that the ombudsman is available for those issues that the hon. member refers to. I would also point out that if we were going to get into discussion of something like that, it would come through one of the joint policy tables because of the policy and process we have defined.
G. Wilson: This raises a concern, because the third paragraph in the letter I referred to, which I see the member has a copy of, says: "The issue of accountability of first nations governments to their own citizens" -- their own citizens, it says; it talks about citizenship here -- "is a matter that will be raised during treaty negotiations."
I think the minister can recognize that if there is a matter of government representation on the part of one particular group and if the "citizens" of that group feel they are somehow ill served by their government, because their government may not be a reflection of the majority but may be a representation of only the minority.... The internal politics of aboriginal people, I've learned, are complex. Surely they have to have a right to appeal somewhere. This isn't something we can negotiate at a first nations negotiation, because the people negotiating at that table may be the very people that aboriginal individuals have concerns about. To what independent authority or body does the aboriginal person who feels a lack of representation by this governance that's been in place appeal in the event that they feel they have had an injustice done to them?
Hon. J. Cashore: I would call on the hon. member to encourage these people to contact me with regard to their support for this concept. I'm willing to hear from them. If he has information he wants to pass along to me, I would have to say that I have not heard this put forward in any other venue.
G. Wilson: I'd be delighted to pass on -- perhaps I won't take up much more time in these estimates -- correspondence that I've received. In fact, I think I have forwarded some to the minister earlier with respect to the need.
One of the issues that has been raised is with respect to the amount of consultation and negotiation that has taken place between those authorities or those councils that seek to speak on behalf of their people, whom the minister refers to as their citizens. Members of the group that are being represented don't believe that consultation has occurred. I refer the minister back to when Mr. Connaghan went into a public meeting where the so-called elected representatives of the Westbank band were to sit down and have their claim negotiated, only to find that people took strong objection to the authority that was deemed to rest with that group in terms of their right to negotiate on behalf of other Okanagan bands. I wonder if the minister might again tell me to whom these people appeal. Is it directly to the minister?
Hon. J. Cashore: That was the Penticton band that showed up at that meeting that takes place within 45 days.... I'm not surprised that events like this take place. We're on a cutting edge here, and there are a lot of changes taking place. This is a time of change. Again, if that band wishes to support this concept, I would be pleased to hear from them. I have met with the Penticton band on a number of occasions. I'd be glad to meet with them again. If they want that to be discussed at a meeting, I'd be glad to discuss it with them.
G. Wilson: I take it that some form of aboriginal ombudsperson or somebody designated to whom an appeal can be made and an independent review take place is something the minister thinks might be worthwhile. I would accept that that is indeed worthwhile. It isn't just a matter of treaty negotiation, which, of course, in macrocosm is the largest aspect of negotiation; it's something as simple as getting a licence to retail cigarettes.
That comes to mind with respect to the Sliammon band. I know this minister has received correspondence -- albeit carbon-copied correspondence -- with respect to the fairness of the allocation of licences for the sale of cigarettes. It was sent to the Department of Indian Affairs. I wonder if the minister could tell us whether or not he supports the tax-free exemption for the sale of tobacco and whether or not he's prepared to take issue with that. Recognizing that we are on the cutting edge and that we are in a time of change, when we promote, enhance or in any way subsidize the sale of tobacco, given the health care costs directly associated with it, I wonder whether or not this minister might want to move quickly to stamp that out.
Hon. J. Cashore: I did not say I support the idea of an aboriginal ombudsman or an ombudsman dealing specifically with aboriginal concerns. I have said that if first nations people wish to raise issues with me, I am very open to discussing issues with them. I have not heard this issue from anyone other than this hon. member, so the hon. member is speaking about those who are concerned about an elite within their larger community. Should there be that concern, I would be glad to discuss it and discuss a range of issues with them.
I think, among other approaches, there is the approach of trying to foster self-determination. Yesterday we had quite a discussion about the role of women in the negotiating process and in leadership roles, and we canvassed that very thoroughly.
I personally reject the idea that there is an aboriginal elite. I find that offensive to first nations people who I believe have an ability to address issues through their own councils and forums, and I affirm their right and opportunity to do that. Therefore I have a great deal of confidence in the processes that first nations have at their disposal, which are also going through changes.
With regard to the question of taxation, I will not comment on future policy. The question the hon. member asked was whether or not I'd take a certain position with regard to taxation. Any position I'd take would be subject to the process of negotiation and discussions that we have with first nations people.
G. Wilson: In negotiations where the stakes are so high, given that there are operations consistent within the developments of government -- whether they happen to be aboriginal or non-aboriginal -- surely the minister does not believe there are not likely to be stakes high enough that people with one philosophy will try to succeed over people with another philosophy. That's the nature of adversarial
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politics. I don't believe aboriginal people are substantively different from any other people in this world when it comes to power relationships between those who control and those who follow. So I don't think the minister should find that offensive. First of all, let me say those are not my terms. Those are terms aboriginal people have used with me, both on reserve and off. He said to get them to write to him; many of them have. I'll certainly provide the list of those who are communicating with me. I have no trouble doing that. This minister is not always the easiest person to have a meeting with, but we'll raise it.
The second reason I wanted to come back to this question is that it would seem incumbent on this government.... I note legislation that has had passage in the House, which refers to the first nations and to the definition of first nations. It talks about government determined by the citizens of that particular band. It doesn't talk about what kind of government, democratic process, legitimate process for representation or access so minorities are considered. It says a group claiming to represent that group will be acceptable to this government.
I may be simplifying, but let us consider that it's 1994. We're in the modern era, in a global community and a global economy where we have the next major wave of global migration about to descend upon a country of 30 million Canadians with the largest landmass and resource base in the world. We would be a little like King Canute to think we're going to sit on the shore and not recognize that the face of Canada is going to change dramatically in the next 20 years. In order to protect the interests of all people -- aboriginal as well as non-aboriginal -- it is critical to maintain a democratic system that provides access to government, as well as the right of each individual to participate in government. Can the minister tell us what steps the government is taking to review the process that is being put forward to ensure that the rights of every individual represented by that government are protected and accepted under traditional, normal standards that Canadians would expect of any other country?
Hon. J. Cashore: I'm deeply wounded by the hon. member saying that it's difficult to have a meeting with this minister. The hon. member's office is right across the hall from mine.
G. Wilson: I can meet with you.
Hon. J. Cashore: To the best of my knowledge, I have accommodated the hon. member whenever he has requested a meeting. As a matter of fact, the other day I was standing in my office when the hon. member's research assistant came in for a document, and I gave it to him just like that. I hope the hon. member would acknowledge the outstanding cooperation that my office has given. We would be quite prepared to offer coffee to the hon. member, if he would like to come into our office.
A. Warnke: Now I am deeply offended.
Hon. J. Cashore: If I were not available, we'd make available a copy of some of the literature we have in our office outlining the wonderful programs of the Ministry of Aboriginal Affairs. That goes for members of the official opposition as well.
E. Conroy: You guys have better access to him than we do.
Hon. J. Cashore: I'm tempted to engage with that hon. member, but discretion will be the better part of valour.
The hon. member referred to the definition within the heritage act. I don't have that definition in front of me, but I believe it acknowledges the aboriginal peoples traditional system of governance and decision-making. With regard to the question of how we as government look after the interests of British Columbians and of all Canadians, I believe I've commented on that on many occasions in the last few days.
G. Wilson: Let me be more specific. First of all, with respect to accessibility to the minister, I fully acknowledge that the minister is accessible to me, and I appreciate that. I most appreciate his offer of coffee, which I'll pass on to members of my staff, and we'll be over there regularly, I'm sure. I'm not suggesting that this minister and his staff are not available to me; they are. They've been most cooperative in providing me with information and in assisting me with bands in my own area.
I'm talking about people in the community who wish to have some kind of recourse. When they come to me to complain that representation within their system of government is not acceptable or that they can't access the halls of power -- I use that term loosely -- or if they believe that indiscretions are being waged against them, to whom do they go to protest? I hear the minister say: "Write a letter to the minister." That may or may not be acceptable to them. I'm hearing from a number of them, and the letters that I've had range from Kamloops, Penticton, Kelowna, Sliammon, Sechelt and as far north as Prince George. These letters say that the concept of an ombudsperson to whom they can appeal is a desirable one to explore. That's what they'd like to do. These people are not members of government; they're just members of a band who feel that their rights are being abridged in some way. It has everything to do with being able to get a licence to retail on band lands or with feeling that their rights are not being represented in negotiations. There is a wide variety of things; that's what I'm referring to.
I believe that we, as elected Members of the Legislative Assembly, are now engaged, rightly or wrongly.... This minister has fully acknowledged -- and I have never disputed -- that we have a profound difference of opinion as to how we should be proceeding on this matter. I'm not going to engage him in that any further than I already have, but I do believe, regardless of how we proceed, that we have an obligation to make sure that whatever systems of government we are involved with in terms of negotiations -- whether they're at the local level, provincial level or federal level -- are indeed representative of a fair, open and democratic process that allows all members of that group to have access to government and have fair representation from it. I'm talking about a situation such as that of the Sliammon people, whom I have great respect for, a great deal of time for and spend a lot of time with in Powell River, and who have some concerns that there are a number of families that tend to align politically and a number of families that tend to be disenfranchised through that alignment. There is some concern that the governance that is duly put in place through an elected process is one that doesn't look after the interests of the minority in that group. That's what I'm talking about.
I think that Canadians and governments have a long and very proud history in Canada of making sure that we put in place governments that have as their, if you want, raison d'être not just the advancement of the rights of the majority, but a caring for and a protection of the rights of the minority. We're seeing this new entity, this third order of government,
[ Page 10516 ]
being established, and I'm curious to know what the minister's feelings are with respect to what obligation he feels he has to make sure that the rights of those minorities in aboriginal communities who feel they are disenfranchised or not empowered to have access to government.... To what extent does this government have a responsibility to make sure that their rights are heard equally by those who seek to represent them through whatever government system they put in place?
Hon. J. Cashore: The hon. member is fully aware that we do not buy his language about a third order. We have recognized a pre-existent, pre-contact government with matters that remain to be settled, given the historical facts. With regard to his very understandable and important issue of minority rights among first nations people, I do recognize that that's an issue which has to be looked at alongside the fact that part of the legacy of problems for first nations people has been government taking away people's ability for self-determination. Therefore it behooves us to recognize that there has to be a fundamental principle of recognizing the right of a people to work toward self-determination as a means of dealing with a wide range of issues. We believe that self-determination is part of what leads to self-respect and to addressing some of the issues he refers to.
The hon. member raised the question: what about those minority people who still have some concerns and rights that are not being addressed? At that point, I would have to say, hon. member, that you and I agree to disagree. I am saying to you -- and I have said it before to you, and you don't agree with it -- that those people should have access to all the institutions of British Columbia, all the resources of the line ministries and all the ways in which one can address the issue of administrative fairness, including the office of the official ombudsman. I understand the member's point. He is saying that it's not adequate, that there needs to be a special ombudsman for first nations people. On that point I disagree. I also, in making that point, recognize the significance of honouring the importance of self-determination for first nations people.
G. Wilson: We've hit the heart of the problem here. I find it interesting that the two Liberal members here find this amusing; they won't find it amusing when future generations of Canadians find themselves in a political quagmire because of the ineptitude of some members to nail this stuff down in these estimates.
If this government enters into a negotiation that creates a third order of government -- and you may not accept "third order"; you might say "pre-contact government," whatever that means and whoever recorded that, and however that was recorded, presumably through oral history because "pre-contact" would be prior to any kind of written laws or regulation -- it's going to provide jurisdiction that will exempt the provincial government from authority and rights over what those governments do. If those governments then practise against minorities things that would be unacceptable in non-aboriginal communities, is this minister saying that we have no obligation or responsibility to step in and protect those minorities? I believe he's saying that it's up to the aboriginal people to determine that. If abuses exist against the minorities, once these new governments -- or these old governments, as the minister would have us believe -- are in place and acting and working within British Columbia, we will have absolutely no authority or right to be able to determine it, unless, of course, they're against the criminal statutes of Canada, if we don't negotiate away that right.
We have to make sure that if we're going to head down the path this minister would assume we should, which I fundamentally disagree with, then we'd better negotiate some minority protection. We have a responsibility to do so, not just for this generation of aboriginal people in the minority but for future generations. Once those governments are in place and have authority and jurisdiction, my guess is that this government will have absolutely no way of interceding, overriding or being able to deal with individual abuses if they continue to occur.
Hon. J. Cashore: The hon. member knows full well -- or if he doesn't, virtually every other person in this chamber knows full -- that I did not say that. I've expressed what I consider to be a recourse for those people who are in that minority position.
The hon. member has stated that he doesn't agree with my reference to the provincial ombudsman, and it's quite legitimate for us to disagree on that point. I'm not quite sure where he's going with what he's saying, but we have agreed to disagree on this point. To state in the record that I have said I don't care about this is unfortunate.
G. Wilson: The minister will agree that the provincial ombudsman has a working definition with a set of defined parameters within which the provincial ombudsman's jurisdiction applies. The minister surely isn't telling us that when these pre-contact governments are given authority, jurisdiction and rights over land, with rights to pass legislation, as they will do, that if somebody feels their rights are abused within that process, the provincial ombudsman is going to have rights to go in and intercede on matters of a first order of government, a second or third order, or pre-contact aboriginal government?
The ombudsman isn't going to have any rights or authority over that. The answer was given to the member for Peace River South a few minutes ago, when he was arguing that there needed to be some kind of jurisdiction provided with respect to the fiduciary obligation of the federal government that is being negotiated away on something as simple as a referral on environmental protection.
How can the minister sit there and say that the right to recourse is through the government of British Columbia when we're establishing a jurisdiction that runs separate from, parallel to or independent from the province under the federal statutes of Canada?
J. Tyabji: I find it regrettable that the minister won't clarify the last question. I would like to bring to the minister's attention a case that has come before this House in the Ministry of Housing estimates -- and dealt with briefly in this ministry -- where the arbitrator in a housing dispute ruled that she had no jurisdiction over the minority rights that were brought before her because the dispute took place on aboriginal land. This minister should be aware that there are currently bodies of the provincial government set up to arbitrate disputes. They are very similar to an ombudsman and are ruling that they have no jurisdiction on aboriginal land. The legal precedent set by that ruling was that aboriginal land lay under the federal statutes. I don't know how the minister can refer minority rights on aboriginal land to a provincial ombudsman, who can rule that only third-order-of-government or federal statutes will apply. I would be very interested to hear if the minister is saying that in the negotiations that are taking place today, the province is
[ Page 10517 ]
reserving some rights to have provincial statutes apply to the third order of government. If that's the case, we need some details on that, because that's new information. This government has told us prior to these debates and in every other debate we've had on this issue that the third order of government -- or, as this minister puts it, the pre-contact government of the aboriginal people -- is separate from the functioning of the provincial government. So I don't know how the minister can give us an assurance that it will go to the ombudsman. If it doesn't go to the ombudsman's office, where will not just the minority rights of the aboriginal people but the rights of non-aboriginal people, who are by definition disenfranchised on aboriginal land...?
Hon. J. Cashore: I did want to read into the record the response to the hon. member for Okanagan East. The question was: has there been a change in terms of jurisdiction with respect to arbitration under the Residential Tenancy Act, and what is the mechanism by which a tenant on reserve can have recourse through this government? There has been no change in jurisdiction. The issue is to what extent the provincial legislation encroaches on the Indian Act in respect to non-Indian residents on reserve lands. The question has not been finally decided by the courts. The leading case, Anderson v. Triple Creek Estates, found that the Residential Tenancy Act had no application in the matter if the dispute involved use or possession of land on an Indian reserve.
Arbitrators are familiar with the court decisions and make a determination on a case-by-case basis as to whether they may exercise jurisdiction. The Westbank Indian band has drafted a bylaw which would make the Residential Tenancy Act apply on their reserve. As soon as the bylaw is approved by the Ministry of Indian Affairs and Northern Development and proclaimed by the band, the Residential Tenancy Act will apply. The Ministry of Aboriginal Affairs will be working closely with the Ministry of Housing, Recreation and Consumer Services to support this cooperative effort.
J. Tyabji: I appreciate the information on this case that the minister has given me, but the bylaw implementation is being held up because the federal government is not coming up with financing, unless the provincial government is going to provide funds. It was stalemated last time. That was the case a couple of days ago. Because that bylaw was not implemented -- and that was a voluntary decision on the part of the Westbank Indian band, not something that they had any statutory obligation to implement.... In the event of that bylaw not being adopted, is this minister saying that the dispute between a private citizen and private business on aboriginal land could go to the provincial ombudsman's office under the model of the third order of government being negotiated by this government?
Hon. J. Cashore: Again, the hon. member insists on using the term "third order of government." I personally find this offensive. I don't think it's necessary. We have explained our position with regard to the meaning of government as it pertains to first nations people. In regard to the question about the ombudsman, I'm not aware whether or not this issue has been taken to the ombudsman. I think it might behoove the hon. member to contact the ombudsman's office to get an answer.
J. Tyabji: I will certainly do that. It is not before the ombudsman, and I'm sure that the outcome would be for the ombudsman to rule that disputes about aboriginal land belong under federal statutes and are independent of provincial jurisdiction, which is exactly the point we're trying to make. However, I will do that. I doubt that it will be concluded before these estimates, so I'll provide the answer to the minister in writing. The point is that that case is a good example.
If this minister is saying that third order of government is offensive, and we're to talk of pre-contact government -- is that the politically correct term? I'm not sure that we've had that on record -- perhaps that should be communicated to all of us so we don't use offensive language in our correspondence, because we want to be correct on that. If it is pre-contact government, when the minister communicates to us could that correspondence define the correct way to deal with what it is this government is implementing?
The Chair: Hon. members, we are here to discuss estimates, not necessarily language usage. I'd like to encourage members of the committee to get into the issue of the estimates and the administrative work before us.
Hon. J. Cashore: I don't want to speak for the ombudsman, but in cases that the ombudsman has dealt with, it has been my experience that the ombudsman's approach has been inclusive of a broad range of issues. I'm not saying that the ombudsman would deal with it; I'm not saying the ombudsman would not deal with it. But I would expect that there would be a process whereby there would be a determination.
G. Wilson: Hon. Chair, I respect your request to get down to the detail of the estimates, and I believe we have been dealing with the details of the estimates. Look at the amount of money being pumped into the negotiation process, and look at the cost to this government and the federal government with respect to this year's budget alone in terms of negotiating the establishment of whatever we call this other form of government. It's a form of government that is going to be quite markedly different than pre-contact government, because I don't believe that the question of land title, as it is seen today, is something that was consistent. In fact, if one were to look at the historical record, I think that that would be true. Nevertheless, whatever we want to call it, the fact is that there is going to be a cost implication for this government this year, next year and for future generations. Similarly, there's going to be a cost impact to the federal government. This minister has quite rightly said that he has no idea what those costs would be, and that's why he can't tell us. I understand that.
Coming down to more specific riding questions, I mentioned I did have a few, and I would like to try to get them in today before we rise and report progress. Specifically, if I can come back to the question of the Sechelt, I wonder if the minister could tell us to what extent the dollars are being assigned within his ministry with respect to the provision of legal services, legal assistance, in conjunction with the Ministry of Attorney General. The reason I ask him this is that I raised this very question with the Attorney General in the first part of the Attorney General's estimates to suggest what kind of ongoing funding there might be for community interface with respect to gangs and gang operations in Sechelt. The Attorney General said that this matter is more appropriately addressed in the estimates of the Ministry of Aboriginal Affairs. So I now bring it to the Minister of Aboriginal Affairs. Hopefully he
[ Page 10518 ]
will not tell me that I should be addressing it in the estimates of the Ministry of Attorney General.
Hon. J. Cashore: The amount is $130,000 for a legal officer to support each negotiating team. I said a while ago that we'll be staffing up four of those teams during this fiscal year, and we expect to have six staffed up in about 16 months from now.
G. Wilson: Maybe I wasn't clear enough in my question. I'm not asking the cost of the negotiating teams. I'm asking specifically about a program that is operating within the Sechelt Indian government district with respect to matters of law and order and gang warfare -- I think warfare is the wrong term, but certainly gang operations -- that have taken place there. This is something that has been jointly shared by the RCMP and the Sechelt Indian government district. I was successful in managing to get them some money this year from the Ministry of Attorney General. I believe there is a desire for an ongoing program with respect to community interface between aboriginal and non-aboriginal youth in Sechelt. My understanding is that there is a negotiation underway to have that interface take place. That's what I'm talking about. I'm not talking about negotiations; I'm talking about an interface between Sechelt and non-Sechelt youth to try and minimize the number of gangs that have created problems in both communities.
Hon. J. Cashore: I'll try to get an answer on that, but I don't know if we can get it today. Perhaps we can have the hon. member talk to a member of staff afterwards so that we understand it specifically. As he says, it relates to a question of whether there's a source of government funding to assist in this interface project dealing with aboriginal and non-aboriginal youth in Sechelt where there are some problems. We'll try to find that out.
G. Wilson: Moving on to a second question, but again reflecting Sechelt, to what extent is the Ministry of Aboriginal Affairs involved in current negotiations and questions regarding aboriginal fish strategies that apply to the Sechelt Inlet area? We recognize the desire to have fisheries officers connected through the DFO, and, we understand, through the provincial government. We recognize that much of the salmon fishing industry is a federal jurisdiction. I wonder if this ministry is involved with that project. If so, to what extent and to which program would the dollars be allocated?
Hon. J. Cashore: If I understand the question correctly, at the provincial level we are not involved in the area of negotiating it or funding it.
G. Wilson: As the minister will be aware, particularly in this area, the Sechelt have a very successful hatchery program which they've had for some time. I understand there is, as a part of negotiation, a question of jurisdiction over both the Salmon and Sechelt inlets. I wonder if the minister could tell us to what extent the government is involved currently in the negotiation of the use of Sechelt Inlet as a salmon resource site, and to what extent Sechelt Inlet is part of the negotiation for a comprehensive claims settlement.
Hon. J. Cashore: To the best of my knowledge, our ministry is not directly involved, but I will seek more information in case there's more to it than I'm aware of.
G. Wilson: I just want to direct the minister so I don't send his staff on a wild-goose chase. Where I'm headed on that is jurisdiction over Sechelt Inlet with respect to the sinking of the Chaudiere and the difficulties created as a result of the jurisdictional claim in terms of what can and cannot go into Sechelt Inlet. The local government and the residents would like to have some comment from this minister with respect to the status of the negotiation on that.
Similarly, with respect to the outlying water of Jervis Inlet, given that there is another vessel being considered for sinking off Nelson Island -- and I understand that the Sechelt believe they have a claim in that area -- can the minister tell us to what extent that is being considered as part of the overall treaty negotiation and settlement? Or is that being dealt with by separate staff within the ministry?
Hon. J. Cashore: That is dealt with by the lands branch in Environment. But if my memory serves me correctly, I believe there has been an indication that there would be at least a certain type of review prior to sinking any more vessels. With regard to first nations, yes, there is a responsibility to consult. It's not part of the treaty negotiation process, but government does have a clear responsibility to consult with first nations people in such an instance.
G. Wilson: Clearly, one of the problems with the Chaudi®XC47,1¯re is that there was inadequate consultation. I'd be the first to suggest that that was not handled expeditiously or well from that point of view.
In the sinking of any vessel.... I'm talking about the area in the outside waters that are largely Malaspina Strait, I think, or the areas adjacent to Nelson Island, which is outside of the comprehensive claim and certainly the land claim. It's water jurisdiction now; we're talking about not only the surface but from the surface through to the bottom of the water, which is under both the Ministry of Environment and the federal Department of Fisheries and Oceans. Does the minister acknowledge that water such as Malaspina Strait or the areas around Agamemnon Channel would be considered land, in reference to land title?
Hon. J. Cashore: I'm not going to answer a question that should be answered by the Minister of Environment. But I would say that depending on whose jurisdiction it falls into -- and I recognize that Lands has a very far-reaching jurisdiction with regard to the land base of the waters -- whether it's a provincial or federal jurisdiction or an element of both, both the federal and provincial governments have a responsibility to ensure that there is consultation with first nations in such an event. Where an aboriginal interest has been identified, those governments have that responsibility.
G. Wilson: One of the frustrations of this set of estimates is that because there is so much overlap, many questions put to the Minister of Aboriginal Affairs would immediately be referred to the Ministry of Environment or the Ministry of Forests. Yet when you talk to the ministers of those other ministries, they immediately refer you to the Minister of Aboriginal Affairs. It becomes difficult to get a question answered. Specifically, does this minister consider that bodies of water, such as Malaspina Strait, Agamemnon Channel, Jervis Inlet and Sechelt Inlet, would be considered as land in a negotiation on land claims?
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The Chair: I wonder if I might interrupt for just two seconds, hon. member. Can you tell me how that's relevant to the estimates in front of us, please?
G. Wilson: It's relevant to the estimates in front of us in terms of the ministry referral process and the staff assigned to ministry referrals in terms of allowing economic development to take place in the Sechelt area.
In terms of the ministerial setup and the way staff is assigned to various aspects of the approval process, we're finding now that not only should there be staff assigned in the Ministry of Lands to a referral process, but also the Ministry of Forests, the Ministry of Environment and so on. There should be staff assigned through the Ministry of Aboriginal Affairs with respect to areas or aboriginal communities deemed to be within their jurisdiction. Local government is going through a land referral process, which is set up by the province with the local government, only to find when they have completed the process....
The Chair: Thank you, hon. member, but you're getting into more detail than is necessary for the question.
Hon. J. Cashore: Hon. Chair, I want to make a comment on the point you have raised. I have more than seven years' experience in this House, and I don't think I've ever sat in on a set of estimates where the minister has accepted more leeway with regard to a range of questions that fall under other line ministries.
I take the hon. member's point that another minister had said that it should be asked here. As a courtesy, it would be very helpful, when saying that, if the member would make available a copy of Hansard relating to the exact context where another minister made that statement. If he would consider that courtesy, it would be easier for me to understand the context. There may be some aspects of that where I could be more informed with regard to exactly what was going on in that other debate. That is just a suggestion.
I do, however, make it very clear that in these estimates I have been very forthcoming with answers on issues that range beyond the particular and clear responsibility of this ministry. As I have said time and time again, we do have a responsibility with regard to all line ministries. Therefore the way in which I have addressed these questions has been to demonstrate that I do recognize that responsibility. I have not walked away from those questions. However, I would expect that the hon. member would recognize that where it comes into a technical question, such as a body of water and the actual land under that body of water, my response should be taken in good faith when I say that part of that technical question should be dealt with by another ministry.
The hon. member comes back to me and says: "Well, I spoke to that minister, and he said he referred it to you." With all due respect, hon. Chair, I hope the hon. member realizes that when that reference is made, it would be much more helpful if I could see the actual context in Hansard as to what was leading up to that statement when it was said. That has been said a number of times by this hon. member in this debate this afternoon, and I'm very interested in seeing Hansard so that I can have a better understanding of the actual context that he's referring to.
The Chair: The patience of the minister is exemplary.
G. Wilson: I hope that comment wasn't suggesting that the Chair is not neutral in these discussions. The minister clearly has far more staff at his disposal than this member does; however, if that's what the minister would like, we'll endeavour to get that for him.
Perhaps we can move on to another area which this minister may have some information on. It has to do with the Kingcome River flood migration, the Gwa'yi village and the Tsawataineuk Indian band. I believe this is within this minister's jurisdiction, because the Ministry of Aboriginal Affairs and the Department of Indian Affairs have been involved, as has the Ministry of Forests and the Ministry of Environment, I believe.
I refer to a report by Peter Ward and Associates, professional engineering services, research and development, hydrology, alternative energy, sediment engineering and limnology. It was conducted for the band on Kingcome Inlet. There are certain recommendations within the report, and these recommendations have been taken to and shared with the Minister of Forests, and we've had an opportunity to discuss them. But quite clearly it would appear in the recommendations that there is a need to provide some secure access to the village with respect to moving the village that is sitting on a floodplain and is now negatively affected by upland logging. Can the minister tell us if there is any proposition within the ministry right now that looks at the negative impact of upland usage on existing villages with respect to site relocation? Is there a movement within the ministry to have members of his staff put funds, which might match federal funds, into any program that would allow aboriginal people access to those dollars where reconstruction is desired as a result of provincially approved logging sites that have negatively impacted on villages such as the Gwa'yi?
Hon. J. Cashore: I don't have at my fingertips all aspects of the answer to that question. Much of its application involves some other ministry. However, the answer is yes. Our ministry has a regions division, and Randy Brant is the assistant deputy minister in that division. Where something like that is happening in an area, we do have a facility within our ministry to be able to identify the issue, be informed about it and then become involved in it where a line ministry is involved. We are very often the facilitating agent to the line ministry.
I do not know this one intimately, although I have been into Kingcome Inlet many years ago and have landed on the river there. Perhaps the member could clarify it for me. I believe that the majority of the residents of Kingcome were actually relocated to a site not far from Comox. My memory is that they were referred to as the Homalco band -- and I may be incorrect on that. It's my understanding that the vast majority of the people in that village were relocated. However, I would assume from what the hon. member is telling me that residents are still living there. The IR site would understandably now become a traditional site and would probably be a site that they would visit for food-gathering purposes in the summer and other times. Therefore the issues that he's raising would continue to be important issues to address.
Having said that, I don't have all the details on that. I'm very happy to get more information on it. It's a bit complex, but we'd be glad to get more information for the hon. member. If he would like to have a discussion of that with our staff after we get more information, I'd be glad to make that available.
G. Wilson: I'm pleased that there is an avenue there, because there has been considerable frustration among the people of Gwa'yi village. I will be happy to make this report
[ Page 10520 ]
and other information available if your staff is not already aware of it, although I'm sure somewhere in your ministry there will be somebody who has dealt with it.
I have a second question that has to do more generally with land use for resource extraction interface on Indian reserves. I wonder whether there is staff within the ministry operations that work with the Ministry of Forests on aspects such as downstream flood management or flood control where upland logging practice is currently engaged in. If not, I believe this is something your ministry might want to consider. Clearly the Department of Indian Affairs does not have that opportunity to interface, the Ministry of Forests see it as outside their jurisdiction, and the Ministry of Environment can only make general assessments or comments with respect to environmental impact. As a result, there are very large cracks through which certain bands are falling in terms of some kind of comprehensive land-management strategy, in which I'm sure they would very much want to participate. I wonder if your ministry sees that as a role. If it does, who in the ministry is involved and what kind of resources are assigned to them?
Hon. J. Cashore: We don't have a division within our ministry that actually does the same kind of work that the Ministry of Forests or Ministry of Environment does in these applications. However, when such an issue is drawn to our attention, our regional operations branch does become involved and will take that issue to the line ministry and the Ministry of Forests or the Ministry of Environment, if that is where the issue should be dealt with. Not having intimate knowledge of this example -- if it is an example the hon. member is referring to -- I can say that we'll do our very best to make any information that we have available to him.
I would also say that where we're dealing with issues of resource extraction and impacts that relate to first nations people, there is a new opportunity -- which is not in any way to take away from the responsibility of our ministry or other ministries -- in the new forest renewal plan. I've been actively speaking to a number of first nations about getting in on the ground floor in accessing some of those resources to enable them to address some of these impacts where it has been a logging impact.
G. Wilson: I'll take that under advisement, and I'll certainly be prepared to pass on details to the staff.
If we could return to Powell River for a moment -- as I conclude this series of riding questions, and I appreciate the patience of the minister as we get through them -- with respect to shellfish cleanup in the areas of the Sliammon and the negotiations currently underway with MacMillan Bloedel and the ongoing environmental planning that is taking place there, can the minister tell us whether or not there is going to be ongoing assistance in terms of legal financing for litigation, should litigation be found necessary as a last resort? Or is that something that is going to be dealt with primarily through the federal Department of Indian Affairs, who currently have not been very forthcoming?
Hon. J. Cashore: The federal government finances this kind of court case; the provincial government does not. When the hon. member refers to ongoing financing, I'm not exactly sure what he is referring to. I would just take this opportunity to say that I did go and meet with the Sliammon band on site and had a very worthwhile morning with them. We saw some of the instances where they have concern in terms of the interface with MacMillan Bloedel.
G. Wilson: Again, maybe my question wasn't specific enough. I understand what there may be in terms of the legal costs, but in preparation for such a case, there is often environmental impact work that needs to be done, much of which is actually currently underway with respect to the Ministry of Environment. There is a very successful monthly meeting on local environment under Mike Wong, and Sliammon is involved in that sort of local environment impact and assessment. I'm questioning whether or not there would be dollars available for the provision of the environmental impact work that would be needed to done in order to prepare a case. This is often expensive. It requires testing and it requires some baseline work being done. It requires proving basically that the shellfish contamination in fact is a part of mill effluent. I wonder if within this ministry there's a proposition to assist in the preparation of that material. I understand the litigation costs may be carried by the Department of Indian Affairs.
Hon. J. Cashore: We have a small environmental fund of, I believe, $150,000, which could possibly provide some seed money for this kind of situation. I think we'd have to review that together to be absolutely certain that it would apply there. Again, the hon. member refers to Mike Wong of the Ministry of Environment. I would also encourage canvassing the Minister of Environment with regard to the ongoing aspect of that particular dimension of the funding.
G. Wilson: I'd be happy to do so as vigilantly as I canvass this minister.
I move then to the question of taxation on Sliammon land. This may not be an issue that the minister can comment on, but I think it needs to be canvassed here. It has to do with land taxation and the B.C. Assessment Authority, for people who hold leased properties with capital improvement on Indian land. The question has to do with an appeal on land which may be considered to be waterfront -- in fact, waterfront is held back by agreement between the Indian band and federal and provincial governments. This may be an area the minister does not want to comment on, because there is likely to be a legal case arising out of this.
My question is specific. Does the Minister of Aboriginal Affairs believe that there is a role in the negotiation process for those kinds of third-party interests to be protected by this province, given that the federal government is going to be negotiating in a larger issue the question of the macro-claim. In other words, is there a role for this ministry to play in the protection of third-party interests on reserves that have capital improvements on leased land, where that land is assessed in conjunction with lands that are currently alienated by special agreement with the bands?
Hon. J. Cashore: I'll try to get around the court aspect by giving a very generic answer. On lands where the federal government is the trustee, the federal government has a primary role. As an enabler, this minister and this government look upon all matters pertaining to first nations people in the province as being of interest to us, and if we can play a facilitating role -- whatever the circumstance might be -- we would seek to do that, whether it has to do with leases where there are mobile homes and problems that exist around that.... This ministry or another ministry of government will sit down with people in a consensual type of forum and talk about how we might do some problem-solving together. That is a very generic answer to the question. The hon. member has already identified why I might be a little reticent to comment on that specific
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question. Where it's IR land, it's the number one responsibility of the federal government. That doesn't get us off the hook, though; we're interested in what's happening in situations throughout B.C.
G. Wilson: Much to the relief of this committee, this is the last question I have with respect to matters within the riding.
This has to do with the Okeover Arm development and the potential fish farm, both finfish as well as shellfish licences. Can the minister tell us to what extent those operations are now being conducted as part of economic development proposals that may in fact have financial assistance from this ministry, and to what extent that would be working in combination with some form of joint agreement between the federal and provincial governments with respect to fisheries approvals that have traditionally gone to non-aboriginal licence holders?
Hon. J. Cashore: I didn't understand the question.
G. Wilson: Let me try not to be so convoluted then.
Is this ministry working on establishing finfish and shellfish aquaculture licences in combination with the federal Department of Indian Affairs as part of an economic development proposal, where those licences would be established in areas where licences were traditionally held not only by non-aboriginals but other aboriginals who are not included in such programs? In the Okeover Arm and in the areas up toward the Broughton Archipelago area, there is growing concern that licences are being held back and not being renewed as part of an overall economic proposal to assist local Indian bands to get into aquaculture.
Hon. J. Cashore: The short answer is no. We are not involved in any such program or plan that we are aware of. I think I'll just leave it at that.
A. Warnke: I must confess that I have several questions that I'd like to pursue. Unfortunately, I have a meeting to attend fairly soon. Rather than start with the time that we have, I would like to move that the committee rise, report progress and ask leave to sit again.
The committee rose at 5:26 p.m.
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