2000 Legislative Session: 4th Session, 36th Parliament

The following electronic version is for informational purposes only.
The printed version remains the official version.

Official Report of




Afternoon Sitting

Volume 19, Number 9

[ Page 15325 ]

The House met at 2:08 p.m.

Hon. U. Dosanjh: Joining us on the floor of the House, we have two special guests from the state of Punjab in India: the Hon. Sohan Singh Thandel, Minister of Food and Civil Supplies; and the Hon. Sujan Singh, Minister of Rural Development and Municipal Affairs. They are here to celebrate Baisakhi with the Sikh communities in British Columbia. Accompanying them are some prominent British Columbians who are sitting in the members' gallery: Gurbax Sanghera, Gurdev Johal, Balbir Changiara, Sarwan Randhawa, Gordui Dodd, Jatinder Saroya and Jarnail Bhandal, president of the Ross Street Temple. Would the House please make them all welcome.

Hon. J. Pullinger: As I think everybody in this House knows, this is Emergency Preparedness Week. I'm pleased that we have members of my ministry's emergency social services unit -- a small team that is responsible for coordinating the efforts of more than 5,500 volunteers across B.C. -- with us today. These volunteers help people forced from their homes because of things like floods, fires, earthquakes and local disasters, and they make sure that people have access to food, shelter, clothing and the other kinds of things they need in a crisis.


I would like to introduce today the team in my ministry that helps coordinate the people across the province and support their efforts. With us today are Mike Woodcock, the executive director of the team; Kathie Stenton, the director; Brenda Fox, the volunteer coordinator; Dave Scott, the provincial response coordinator; Cheryl Venn, the administrative assistant; and Christine Ritson, the program assistant. I'd ask all members of the House to help me recognize and thank these individuals, as well as the people they work with across the province, for their work -- and also to welcome them to the House today.

M. Coell: I have some guests that I'd like the House to welcome today: Murray and Bernice Duncan, George and Mary Stoner, and my mother Norma Coell. I would also add my welcome to Victoria's own Gordy Dodd. Would the House please make them welcome.

J. Weisgerber: I have a number of guests today. There is a group of people from the Peace River country here to meet with the Minister of Agriculture and staff from the Ministry of Environment to talk about wildlife damage to crops in the Peace country. Karen Goodings is chair of the Peace River regional district; Tim Caton is the vice-chair; Burnem Grant is president of the Peace River Forage Association; Bob Nicholson is a director of the Peace River regional district; and Gerry Gleeson is a range officer with the Ministry of Forests.

Also in the gallery is Bill Vanderland. He's here, as he always is, to promote his interest in ethanol. Finally, Kanako Motohashi, a third-year political science student at UBC, is here in the gallery. I trust that members will be on their best behaviour, and I ask you to make them all welcome.

Hon. J. Kwan: I'd like to introduce two guests of my very capable and hardworking ministerial assistant, Am Johal. Visiting today in the gallery is a UVic graduate, Hagit Katzov, and her father Alex Katzov, who is visiting from Israel. They have just come back from touring the beautiful Rockies this past week. Would the House please make these two special guests very welcome.

B. McKinnon: It gives me great pleasure -- for the third time this week -- to welcome 26 grade 5 students from Pacific Academy in my riding. They are here with five adults and their teacher. I hope all members will make them feel welcome.

E. Conroy: It's my pleasure this afternoon, on behalf of the government caucus, to welcome all of our constituency assistants to Victoria this week. We're very pleased that they're here and know that they're working really hard on our behalf. I just want to pass on my congratulations for your work. Would the House please make them welcome.

M. de Jong: During the Second World War, 418 Squadron was one of the top -- if not the top -- scoring squadrons in the Royal Canadian Air Force. Today and over the past couple of days, past members of that squadron have been gathering in Victoria. Some of them are in attendance this afternoon. The former CO of the squadron, Russ Bannock, is here. Though they don't know it, I once counted myself a member of that illustrious squadron in its present location in the city of Edmonton. We're very proud of every one of them and all that they accomplished. I hope all of my colleagues will make them welcome today.

T. Stevenson: I have a number of introductions of some young people who are visiting the assembly today. They are the legislative interns for 2001. They will, of course, be beginning in January of 2001. I know that both sides of the House look forward to working with them and will welcome them here. We have Angela Chan, Marla Frketich, James Gillies, Jon Grenke, Stephen Hartman, Kyla Knowles, Jay Schlosar, Tiina Searle and Tracy Tang. Would the House make these young people welcome.


P. Calendino: It is with pleasure today that I introduce a good friend and a very well-known person in the arts community in Burnaby, Mrs. Kathryn Nokony. Kathryn is the very proud mother of two young, energetic daughters who are with her today: Alana, who will be speaking with you later on this afternoon, and Kerri, who's a law student and will be interviewed for an articling position with the Ministry of Attorney General tomorrow. I would like the House to make them all welcome.

The Speaker: If I may, members, here in the gallery today are my constituency staff, Michael Sather and Joan Fisher, and, for his first day on the job, my executive assistant Ed King. Would members please make them welcome.

Introduction of Bills


Hon. D. Lovick presented a message from His Honour the Lieutenant-Governor: a bill intituled McLeod Lake Indian Band Treaty No. 8 Adhesion and Settlement Agreement Act.

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Hon. D. Lovick: I am very pleased to introduce the McLeod Lake Indian Band Treaty No. 8 Adhesion and Settlement Agreement Act. The McLeod Lake agreement has been ratified by the McLeod Lake Indian band, by British Columbia and by Canada. The agreement is now in effect, settling a 100-year-old dispute. This agreement settles a lawsuit by allowing the band to adhere to Treaty 8, a historic treaty signed in 1899 that focuses on a land and monetary settlement.

Introducing the legislation before us now is one of the steps in implementing this agreement. The McLeod Lake Indian Band Treaty No. 8 Adhesion and Settlement Agreement Act will enable the province to fulfil its commitments, its obligations, under the agreement. The McLeod Lake agreement creates land use certainty and economic stability for the band, for the forestry sector and for local communities. I am honoured to table this legislation today and move that the bill now be read for a first time.

Motion approved.

Hon. D. Lovick: I move that the bill be referred for second reading at the next sitting after today.

Bill 10 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.


Hon. P. Ramsey presented a message from His Honour the Lieutenant-Governor: a bill intituled Regulatory Streamlining Miscellaneous Statutes Amendment Act, 2000.

Hon. P. Ramsey: I move that the bill be introduced and read a first time now.

Motion approved.

Hon. P. Ramsey: I am pleased to introduce Bill 12. This bill is the latest step in modernizing government for the twenty-first century. It amends several statutes to streamline government operations and remove unnecessary red tape to help reduce the regulatory burden and the cost of doing business without compromising the public interest. Bill 12 is yet another part of the streamlining initiative that began in May 1998, with the appointment of the Business Task Force, which brings together business, labour and government in a positive and productive way to modernize the way we do business in British Columbia.


Bill 12 streamlines the Animal Disease Control Act, the Assessment Act, the Financial Disclosure Act, the Forest Act, the Forest Practices Code of British Columbia Act, the Islands Trust Act, the Land Act, the Land Survey Act, the Mineral Tax Act, the Municipal Act, the Petroleum and Natural Gas Act, the Range Act, the School Act and the Taxation (Rural Area) Act. I will discuss the amendments in more detail during second reading.

I move that the bill be placed on orders of the day for second reading at the next sitting of the House after today.

Bill 12 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions


M. de Jong: I have a question for the Premier. I got a letter, yesterday in fact, from a passenger who was sailing on B.C. Ferries on Good Friday last month -- one of the busiest days of the year for B.C. Ferries. He included a photograph. The letter was a copy that was sent to the government, and the government also got the photograph. The photo shows a passenger vehicle deck virtually empty, at a time when there were lineups extending well up the highway. That passenger was told that there was a staffing problem at B.C. Ferries. We have subsequently checked, and we were told something a little different. We were told that the ferry had reached capacity with walk-on passengers.

The question for the Premier is: will he confirm, for all of those people that were lined up halfway back to West Vancouver, that this is the price they will pay because of the decisions -- the horrible decisions -- that he and his colleagues have made to waste half a billion dollars on this fast ferry fiasco? Will he confirm that it is the decision of him and his colleagues that has condemned them to wait in lineups for upwards of five hours while ferries with half-empty vehicle decks sail off?

Hon. P. Ramsey: We'll take the question on notice for the minister responsible.

The Speaker: Do you have a new question, member for Matsqui?

M. de Jong: It's certainly a new question, Mr. Speaker. I'll ask the Premier the question, as the head of the government. The bottom line is this: after wasting half a billion dollars on fast ferries that don't work and driving B.C. Ferries to the edge financially, the number of passengers and vehicles that can be accommodated on the route from Horseshoe Bay to Nanaimo is actually down -- decreased capacity. The Premier, as the head of the government, surely will take advantage of this opportunity to apologize and acknowledge that to those British Columbians who, this summer, are going to wait in lineups that are longer than ever for hour and hours, simply trying to get home either to Nanaimo or to Horseshoe Bay. It's his fault. Will he make that apology now for the decision of him and his colleagues?

Hon. P. Ramsey: Well, I guess the member is stretching to put some new paint on the same question.

We have taken firm and decisive action to make sure that B.C. Ferries has a sound financial footing into the future and fulfils its role as part of the provincial highway system, serving a vital role in the economy and transportation to Vancouver Island. In this legislative session we'll be looking at dedication of fuel tax to B.C. Ferries, as we do for the highway system. We will be debating, very soon, provisions in the Budget Measures Implementation Act, 2000, that provide for the relief of debt for B.C. Ferries. We have taken firm steps to make sure that B.C. Ferries has a bright future and can move forward and provide the service that British Columbians expect of it.

[ Page 15327 ]


J. Reid: On Monday the government gave a $9,000 co-op grant to an existing business, Road King Bus Tours of Vancouver Island, to "augment the Island's tourist industry by offering an all-season transportation service to local groups and visitors." I talked to Fred Judson of Forest Bus Tours in Parksville. He employs six people and five buses by offering an all-season transportation service to local groups and visitors. But he is not getting a subsidy from this government, while his competitor is. Will the Minister of Community Development tell us why her government is giving out business subsidies to Mr. Judson's competitor?


Hon. J. Kwan: The ministry actually does indeed provide for a range of contribution agreements, if you will, under the cooperative advantage program. The cooperative advantage program is a program that aims to support community groups throughout the province to develop co-ops and to enhance business opportunities. All of the cooperative advantage program approvals and applications are dealt with by staff; each of them is evaluated through a procedure. I'm sure that in the case where there is an application that came through from your particular group, it would be evaluated if they fall within the guidelines. If they don't fall within the guidelines, then clearly they do not meet the guidelines of the program within the ministry.

The Speaker: The member for Parksville-Qualicum has a supplemental question.

J. Reid: Part of the $9,000 is going to be used to develop a web site that will handle on-line tour bookings. In other words, the government is giving an existing business a $9,000 subsidy to get more bookings at the expense of its competitors. Community development isn't about businesses having to compete against their own tax dollars. Will the minister tell us why her government is penalizing small businesses by subsidizing their competitors?

Hon. J. Kwan: The government does not penalize businesses with respect to supporting all community groups to develop entrepreneurial objectives, whether it be a small business in the one sector versus the other. As I said, for all of the ministry's grant and contribution agreements, there are specific criteria to which they apply. People apply for them. If they fit under the criteria, they will then be approved. If not. . . . Of course, a lot of these grants and contribution agreements are oversubscribed, so not everyone can actually meet the criteria.

In terms of really supporting communities throughout where they do need assistance, especially communities in transition, those are the aims of the ministry and the programs of the ministry. Relating to the specific application or if there was an application by the particular business that the member mentions, I'd be happy to have my staff look into the details of that application and provide the details with respect to their application.

G. Plant: The minister's generosity knows no bounds. Yesterday her ministry handed over $20,000 to something called the Urban Spin Lounge launderette. The mind fairly boggles, Mr. Speaker. Perhaps the Premier is moving his office. Or was it the case that the minister relied on her good friend Dave Barrett to show up at the ceremony yesterday and hand the $20,000 over in $50 bills?

Some Hon. Members: Quarters.

G. Plant: Or maybe it was a bag of quarters. Mr. Speaker, the question is not: is this a good business idea? The question is: why are the taxpayers having to subsidize it? So my question for the minister is this: why is she giving 20,000 taxpayer dollars to a laundromat?


The Speaker: Order, members. The minister has the floor.

Hon. J. Kwan: I know that perhaps the members opposite may not appreciate initiatives from this side of the House, where we're trying to help community groups and small entrepreneurs to begin businesses in their own community.


In terms of a laundromat, I'll give you an example, hon. Speaker. I have an application that was approved in Vancouver-Mount Pleasant in the downtown east side. It was a program called Close Encounters. It was a cooperative program to be developed utilizing people in the downtown east side who are underemployed, to create opportunities there. The application and the criteria, as they apply to the ministry's programs, are exactly that, and that is precisely why we put forward contribution agreements to help community groups.


E. Walsh: Hon. Speaker, my question is to the Minister of Finance. As we all know, despite all the doom and gloom that the opposition Liberals constantly spread, the economy of B.C. is in fact turning around. As we all know, Mike Harris tabled his province's budget speech and his budget this week.


E. Walsh: Hon. Speaker, I'm glad they want to know what my question is, because I know that they're all just as anxious to hear the question. Can the Minister of Finance tell this House how Mr. Harris's budget priorities compare with British Columbia's? Also, hon. Speaker, can he confirm for this House that British Columbia rejects that extreme approach to budget-making that the provinces of Alberta and Ontario advocate, that Premier Klein and Premier Harris and, shamefully, the Leader of the Official Opposition have made?


The Speaker: Order, members.

Hon. P. Ramsey: I must say that for a moment I thought it was the member for Port Moody-Burnaby Mountain asking me the question.

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I have had a chance to examine the entrails of Mr. Harris's latest effort. I did want to report to this chamber that in spite of the glowing press about the investment in health, a realistic examination says that they have invested a grand total of an additional $49 million in the health system of Ontario -- less than one-tenth the amount that we've invested here -- which brings them all the way up to a level of $240 per person less than British Columbia. Those are their priorities.

I have had a chance to look at the education budget. At this point the per-student funding in Ontario in this budget is $810 less per child than it was way back in 1994-95.

Finally, I took a look. . .

The Speaker: Thank you, minister.

Hon. P. Ramsey: . . .at the environment budget. Would you believe that the province of Ontario, with a population three times the size of British Columbia, is investing less in the Ministry of Environment than British Columbia?

The Speaker: Thank you, minister.

Hon. P. Ramsey: This is an extreme agenda -- nothing for health, nothing for education, neglect the environment. The only British Columbians that support these extremes. . .


The Speaker: Order, members.

Hon. P. Ramsey: . . .are the members on the opposite side.

G. Farrell-Collins: If the Minister of Finance thinks that the only people who support tax cuts and balanced budgets are members of the opposition, he should call an election, and he might be kindly surprised.

I wasn't going to ask it, but I have a question for the Minister of Finance. Last year the Deputy Premier, who was Minister of Finance, said that it is a myth that lower taxes can lead to greater revenue for the province. Well, that's true. On Tuesday, Ontario did introduce its budget. It's a balanced budget, and it had 30 percent tax cuts -- a balanced budget, something this government has failed to do in nine years. After a 30 percent reduction in personal income tax rates, income tax revenues to the government were $1.8 billion above forecast.

So, hon. Speaker, for all those transplanted Ontarians sitting at home in British Columbia waiting for their $200 income tax refund cheque that will be coming from the government, will he stand up and admit that tax cuts work to spur economic growth and balance the budget?


Hon. P. Ramsey: Well, hon. Speaker, it is good to see the Liberal opposition returning to their roots in the Reagan era and the Margaret Thatcher era -- the voodoo economics.

The Business Council of British Columbia advised me in prebudget consultations that they no longer believe you can gain revenue from tax cuts in a particular area. At best, they said, over time you might regain 40 percent of the cuts in a particular area. That's the advice from these members' friends. I don't know what economic books they're reading.

Let's look at Ontario tax cuts. This tax cut in Ontario. . . . There is a clear contrast. Mr. Harris has delivered 68 percent of the tax relief in his budget to the large corporations of Ontario -- 68 percent. I ask the members to contrast that with the tax relief in Budget 2000 in this House, where 90 percent of the personal income tax relief goes to middle-income families. That's good taxation.

The Speaker: The Opposition House Leader has a supplemental question.

G. Farrell-Collins: Oh yes, Mr. Speaker. The fact of the matter, for the Minister of Finance, is that Ontario has balanced its budget. They're paying down their debt. People are paying hugely less personal income tax than they are in British Columbia, even at the low rates. The low-income people in Ontario pay less in personal income taxes than they do here in British Columbia.

I have a question for the Minister of Finance: when will an NDP Minister of Finance in this province, unlike those in Saskatchewan, actually stand up and admit that tax cuts work? That's how you get the economy going; that's how you protect health care and education -- by growing revenues instead of borrowing, borrowing and borrowing.

The Speaker: The light to end question period is on. I will ask the minister to give a brief answer.

Hon. P. Ramsey: I will be brief. Hon. Speaker, there are indeed some differences between this province and others. One of the differences has to do with debt. Ontario right now has debt which is nearly $30 billion greater than when Mr. Harris took government. They have increased their debt by more than the entire debt of British Columbia.

I'm pleased to report to the House that yesterday the Dominion Bond Rating Service confirmed this province's credit rating of AA, saying that the province's credit rating continues to be supported by the following key factors: (a) a relatively low debt-to-GDP ratio and consequently low debt-servicing costs relative to other Canadian provinces, and (b) solid economic fundamentals and an improving economic outlook.

The Speaker: The bell ends question period.

Introduction of Bills

1904 AMENDMENT ACT, 2000

V. Anderson presented a bill intituled The British Columbia Insurance Company, 1904 Amendment Act, 2000.

V. Anderson: I move that the bill, of which notice has been given on the order paper, be introduced now and read a first time.

Motion approved.

V. Anderson: This act, The British Columbia Insurance Company, 1904 Amendment Act, 2000, was originally passed

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by this Legislature in 1904. It's a private insurance company, and it's in the process of changing its name. That is simply what the act is about.

I move that the bill be referred to the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills.

Bill Pr402 introduced, read a first time and referred to the Select Standing Committee on Parliamentary Reform, Ethical Conduct, Standing Orders and Private Bills.

Tabling Documents

Hon. M. Farnworth: I'd like to table the report from the mental health advocate, 1999.

Orders of the Day

Hon. D. Lovick: I call Committee of Supply. In this House, we will continue to debate the estimates of the Ministry of Forests. In the Douglas Fir Committee Room, we will be debating the estimates of the Ministry of Attorney General.


The House in Committee of Supply B; T. Stevenson in the chair.


On vote 34: ministry operations, $297,814,000 (continued).

G. Abbott: When we recessed for lunch, we were discussing the B.C. Forests action plan, and hopefully the minister has had an opportunity to locate that Ministry of Forests document over the lunch hour.

One of the questions I asked. . . . We deferred the minister's answer to it, because they couldn't find the document at the time. The first question I had with respect to it was the promise to provide about 20 million cubic metres of wood to small business operators over what was then the next two years -- to value-added independent wood manufacturing sectors. Has that goal been achieved?

[D. Zirnhelt in the chair.]

Hon. J. Doyle: The answer is yes. The ministry has sold almost 22 million cubic metres over the last two years.

G. Abbott: Again on bullet number 3, the minister answered one part of my question on that. The other part was whether the Ministry of Forests was driven in part, with this $100 million, through the negotiation with the federal government. I didn't get a response to that side of the question.


Hon. J. Doyle: No, there were no dollars set aside by FRBC. The money was for diversification and training, and there were no federal moneys involved.

G. Abbott: Are there currently any negotiations or discussions ongoing with the federal government around funds of this character?

Hon. J. Doyle: No, there are not.

G. Abbott: One of the communities that the government committed to assist under the third commitment there, "Supporting Communities and Workers," was the community of Gold River where, of course, the major pulp mill shut down. At that time, the commitment of the government was to try to build some partnerships with Bowater, the province and the community of Gold River -- the local governments -- to, according to the news release of the day, "assist with local infrastructures, schooling, health care, counselling, worker adjustment and other immediate concerns." What has occurred with respect to Gold River as a part of that initiative by government?

Hon. J. Doyle: There's been a lot of assistance to the community of Gold River, but the Ministry of Cooperatives is heading up that effort.

G. Abbott: So the minister's not aware, for example, of whether there has been assistance from the province to deal with the cost of infrastructure -- that kind of thing? That information just isn't available here?

Hon. J. Doyle: I do know that moneys have been provided, but it's under the Ministry of Cooperatives.

G. Abbott: We'll leave that question aside, then. I think that in combination with what we discussed this morning, that completes my questions with respect to the forest action plan.

That takes us, on our list of agenda items, to the jobs and timber accord, and I'll begin that discussion. When we looked at Mr. Wouters's report yesterday and earlier today, we did talk about the table of the survey of employment, payroll and hours, the so-called SEPH statistics, from Statistics Canada. As I noted this morning, that table includes forest employment figures from 1983 through 1999. So it could be of some assistance in terms of the evaluation we have today, in that presumably we can compare the figures for 1996 with those in 1999 and so on. Is that a fair way to proceed as far as the minister is concerned?

Hon. J. Doyle: That seems to me a fair way to proceed, hon. member.

G. Abbott: As I understand it, the agreement would be entering, just now, its fifth year. I suppose -- whether we take it from March 1996, when the announcement of the jobs and timber accord was made, or from its signing in, I believe, July 1996 -- we would, at this point in May 2000, now be entering the fifth and theoretically final year of the jobs and timber accord. Is that the ministry's understanding as well?


Hon. J. Doyle: It was announced in June 1997 and runs through to December 31, 2001.

G. Abbott: The agreement, then, in the ministry's estimation is in the fourth of five years. Is that correct?

Hon. J. Doyle: I agree with that.

G. Abbott: The jobs and timber accord was certainly ambitious in its goals. I gather now that we are all very keen,

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both in government and in opposition, on measuring performance outcomes of goals committed to. The jobs and timber accord does provide some opportunities for us to do that.

I want to review, in a fairly methodical sort of way, some of those goals and where we're at in terms of the jobs and timber accord. The accord -- on one of its early pages, under the general provisions -- sets out the employment targets: "A provincial target of 37,800 new jobs will be the goal for the term of this accord, made up of 20,400 direct and 17,400 indirect jobs."

Now, in looking at the comparative figures between 1996 -- 88,088 total forest sector jobs in 1996, and comparing that to 1999 with 85,605 jobs. . . . In that period there would appear to have been an overall reduction of about 2,500 jobs. Again, I'm sure the minister has more current information than I have. My expectation is that the 1999 figures were probably nearer the peak of the cycle and that there may have been some modest reductions since then. What are the SEPH figures that are available to the ministry currently? Tell us.

Hon. J. Doyle: In February of this year, the most recent number is 84,500.

G. Abbott: I guess that tends to reaffirm the suggestion I made that, based on some contraction in prices on the American softwood lumber market and perhaps the season as well, there's been some modest reduction from the 1999 figure -- just over 1,000. In any event, obviously there are some ups and downs with the seasons in British Columbia. But it would seem to me that based on a 1996 figure of just over 88,000 jobs, at this point we are likely around 22,000 -- perhaps 23,000 -- jobs in deficit from what was hoped for or anticipated under the jobs and timber accord. In fact, we haven't seen 20,400 new jobs created. Over the time since the inception of the accord, we have in fact seen a modest reduction in the number of people employed in the forests of British Columbia. Is that a fair statement?

Hon. J. Doyle: That is correct, and as you alluded to in your words leading up to your question, member, the number of jobs in February of this year was 84,500. As you know, those job numbers are taken monthly In February, of course, breakup is on, and jobs haven't returned on the coast as much as they have in other parts of the province.

G. Abbott: The reason I am asking this. . . . I know it always brings a certain pain to the government, because they made some ambitious promises around the jobs and timber accord based on what I think was the fatuous and specious notion that somehow government could cause, or direct to be caused, an increase in employment in the forest sector in the province -- that somehow the government could issue an edict or decree that we would get more jobs per cubic metre in British Columbia. It clearly has not worked out that way. There may be all kinds of reasons why we can't. The fact of the matter is that the government committed to the notion of doing that, and the accord, I submit, has for all intents and purposes been a failure. I invite the minister's comments.


Hon. J. Doyle: I'll just read from a document regarding the jobs and timber accord right through till today:

"The period following the accord has been dominated by changing global market conditions. From 1996 through to the end of 1999 the industry has cycled through a period of falling prices and markets to a period of rising prices and markets. Discussions around the accord recognize that the ability to bring about changes in this sector is always constrained by the realities of world markets. Nevertheless, a number of important commitments have been made under the accord."

I am pleased to say that the ministry has substantially completed all the accord provisions it was responsible for delivering. Many of these actions, such as those related to getting the wood out in a timely manner, along with the changes made as part of the short-term action plan, have stood us in good stead as markets have picked up through 1999.

G. Abbott: The translation, I think, of the statement that the minister just read is this: the accord has been a failure on the employment side. It has not seen the creation of the new jobs which the Premier of the day promised with so much fanfare back in 1996, and the government still sees that the accord, notwithstanding that, has some value because of some of the initiatives contained within it. I do want to explore some of those.

For the information of the minister's staff, we are in the general provisions. If we move over to the second page in the general provisions, this is a quote from the top of the page: "Industry and government agree to develop strategies to increase the timber supply over time." Unfortunately, the document doesn't have page numbers, or I'd provide staff with that. That's the commitment. Where are we at in terms of achieving that commitment?

Hon. J. Doyle: Back to the member's words before he asked the question. . . . The jobs and timber accord was signed back in 1996 and '97, and the softwood lumber accord has meant some restrictions on just what we can ship to the States. Another problem, of course, is quota -- which, as we talked about over the last day or two, has also created problems. And with the Asian market, I think 50 percent of the potential for shipping from the coast to Asia -- 50 percent of that market -- was lost to us. Thank God it is coming back again. But we have met the requirements as far as small business, and we've met the requirements as far as IFPA.


G. Abbott: The question I asked, though, is around the quote I provided: "Industry and government agree to develop strategies to increase the timber supply over time." I'm asking how the government has met the commitment posed there.

Hon. J. Doyle: Government is looking for that three million lift through enhanced forest management pilot projects and IFPAs.

G. Abbott: So we're still looking for that.

Immediately below that, in the jobs and timber accord: "Consultation will be undertaken between government and industry for a B.C. forest job creation tax credit to hire youth, with additional incentives to employ women and aboriginals." Has that initiative or commitment been completed?

Hon. J. Doyle: No, we decided not to proceed with that.

G. Abbott: We'll move on to the next section, then: "Job Maintenance and Creation." In the second paragraph: "Job

[ Page 15331 ]

creation will come from increasing major licensee harvest volumes towards AAC by three million cubic metres by 1999-2000. This will create 3,900 direct jobs and 3,900 indirect jobs." Have we in fact increased major licensee harvest volumes by three million cubic metres as promised?

Hon. J. Doyle: We have been unable to close the gap on the primary factors influencing market harvesting levels, which are markets and world demand.

G. Abbott: So we haven't achieved that goal. The figures I have would suggest that in fact we have seen harvest volumes falling since the inception of the accord -- modestly, but falling. We can further assume from that that the 3,900 direct jobs and 3,900 indirect jobs have not followed either. Is that fair statement?

Hon. J. Doyle: There have been jobs created, but not the amount that we hoped to create -- not yet. In 1999 harvest levels rose as market conditions improved to 69.4 million cubic metres, nearly seven million cubic metres above the 1997 levels. That's as of 1999; therefore the gap between the harvest and the AAC has narrowed.

G. Abbott: The next question I have around performance measures is the final bullet under "Job Maintenance and Creation." That's a promise that job creation will come from: ". . .monitor forest management policy reflected in protected area strategy, land use plans, first nations deferrals, etc., to ensure that the AAC can be spatially demonstrated." "Spatially demonstrated" is a concept that I've always had some difficulty in understanding. Further than that, has the government been able to achieve this one?


Hon. J. Doyle: No targets were set, hon. member. Until the land use unit plans are in place, we can't proceed.

G. Abbott: One of the questions that arise here is whether some of the prominent government initiatives. . . . And we have discussed them fairly extensively here over the last few days -- the identified wildlife management strategy, for example, the landscape unit planning and the higher-level plans, including the Kootenay-Boundary land use plan and so on. Are those initiatives consistent with the commitments that were made in this section? It seems to me that that's the drift of the job maintenance creation section -- that government won't undertake processes that will result in the loss of forest jobs in the province.

I guess it goes back, again, to the issue of -- and I think I heard from the minister yesterday -- a strong commitment that we would not see those initiatives put in place if we were going to see substantial job losses occurring. There would have to be ways to mitigate that before the government would proceed.

Perhaps the minister can address that and address the general premise here that -- implicitly, I think, at least and maybe explicitly -- there is a commitment here on the part of government not to undertake initiatives that will cost jobs in the forest sector

Hon. J. Doyle: Government has to make firm decisions. At the same time, we have to go on with land use plans and make a balance between the jobs and the environment.

G. Abbott: That is certainly true; there's no question about that. What is equally important, though, I'd submit, is that when government attempts to strike that balance, they do it with the fullest of knowledge of what the social and economic impacts of those changes will be. I want to hear once again a commitment from the government that they will do precisely that -- that in looking at creating that balance, they will do it with a full appreciation of the number of jobs, if any, that will be lost as a consequence of the initiative and what portion of the fibre base, if any, will be lost as a consequence of the initiative. Is the minister prepared to offer me that commitment?

Hon. J. Doyle: I think we must also look at the long term. If we don't take care of the environment. . . . Of course, the marketplace is out there watching. We might lose jobs down the road if we don't take some action. As far as, for instance, the Kootenay land use plan, which we spoke about, I think, yesterday. . . . Some weeks ago I met with representatives of the forest sector from the Kootenay area -- the ILMA -- and we talked about that very issue. I charged my deputy to work with that group to make sure that we can come up with a final plan that is acceptable to the Kootenay area and the communities and jobs that are out there.

G. Abbott: We'll leave that discussion aside for the moment and move on to the section "Initiatives by Tenure Holders." The second paragraph of that section reads: "Specifically, industry will commit to projects that will create 2,000 direct commercially feasible jobs. This will also result in 2,000 indirect jobs." How have we done on that particular part of the accord?


Hon. J. Doyle: In the report of last year the advocate reported that there were 800 jobs, and this was reported by industry.

G. Abbott: So those are 800 jobs that have been created by the addition of new plants or where an existing plant has been expanded for a new or expanded purpose. Correct?

Hon. J. Doyle: That is correct.

G. Abbott: The next section is "Initiatives by Forest Renewal B.C." The first paragraph of that reads: "Job creation objectives will be further enhanced through the improved delivery of funds and programs from Forest Renewal B.C. so that at least 5,000 direct and 5,000 indirect jobs will be created."

What, by the government's reckoning, has been the success in achieving that goal? And further -- while I have the floor and in the interest of some economy of time here -- have those jobs that were created been of a short-term or a long-term character?

Hon. J. Doyle: Some of the questions the member asked on this point may be better canvassed in the select standing committee to do with FRBC. But the 5,000 direct and indirect jobs that the member. . . . It's hard sometimes to count them, because some of them are full-time and some are part-time or seasonal jobs.

G. Abbott: This actually is a question that I have canvassed at times in the select standing committee as well. The

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reason I ask it, of course, is because the commitment forms part of the jobs and timber accord, and therefore it seems reasonable, at this point in time, to try to secure some indication of how many. . . .

Well, let me phrase it this way. I think it is fair to ask the question here. I've asked it elsewhere, and in fact, I ask it every year when we're reviewing the business plan. Let's talk about those permanent long-term jobs that have been created. Seasonally, Forest Renewal creates jobs to do watershed enhancement and other things, and that's useful. My concern is: how many full-time permanent jobs have been produced as per this commitment?

Hon. J. Doyle: Approximately 5,000 jobs were created in 1998-99. But again, as I mentioned earlier, some are seasonal jobs.


G. Abbott: Then the minister doesn't have a breakdown of those at this point in time.

Hon. J. Doyle: FRBC does not collect that information.

G. Abbott: The next paragraph reads: "To provide stable employment opportunities, Forest Renewal B.C. will increase funding for eligible land-based programs. Forest Renewal B.C. annual expenditures will be 70 percent of total expenditures directed to land-based related activities up to $300 million. The maximum funding to government land-based related activities will be 20 percent of the available funding for this category." Have we achieved the commitment or goal set out in this paragraph?

Hon. J. Doyle: We do meet or exceed the 70 percent target.

G. Abbott: The latter part of that paragraph reads: "The maximum funding to government land-based related activities will be 20 percent of the available funding for this category." My understanding is that the maximum funding for government land-based related activities is still in excess of 20 percent. Is that correct?

Hon. J. Doyle: I'm sorry; we don't have that data with us at this time.

G. Abbott: Perhaps the minister could provide me the answer to that when the staff or the information is available to him.

Moving on to the next page, second paragraph down: "Priority funding of $25 million for existing experiments will be set aside to finance activities conducted under enhanced forest management pilots and innovative forest practices agreements. Government will increase this level at the same proportion if further enhanced projects are approved." Have we completed our commitment there?

Hon. J. Doyle: We invested $12.8 million into this. We didn't need the full allotment that was spoken about in this accord.

G. Abbott: I think part of the suggestion here was that the $25 million would provide an expansion in the number of enhanced forest management pilots and IFPAs that were going to be undertaken. In fact, the funding has been about half of what was committed here. I think the minister mentioned $12 million. As I understand it, that remains the maximum amount that has been committed. Is that correct?

Hon. J. Doyle: That is correct.

G. Abbott: The following paragraph reads: "In addition to existing programs, industry will have the opportunity to submit plans to Forest Renewal B.C. that cover the incremental activities listed below. Funding will be distributed to ensure regional equity and equity between forest company participants for a total cost of up to and not more than $50 million for each year of the accord."

The number is $50 million, and the activities listed are operational inventory, planning and code-related incremental road costs. My recollection is that this particular objective or commitment was abandoned when the government announced the reduction in the stumpage rate in June 1998, if I've got the year right. Is that correct?

Hon. J. Doyle: That is correct. Those results were also covered in last year's estimates.

G. Abbott: Moving on to initiatives for small business: "Government and industry will work together to achieve the goal of 1,500 direct jobs and 1,500 indirect jobs through tendering the full harvest of the small business forest enterprise program. . . ." We'll be talking about that later on. But generally, have those direct jobs and indirect jobs been achieved?


Hon. J. Doyle: Yes.

G. Abbott: Could the minister quantify that for me?

Hon. J. Doyle: We've exceeded the volume that we forecast, and the jobs went along with that.

G. Abbott: One of the ways in which that was to be achieved was the tendering of cumulative small business forest enterprise program undercut through non-replaceable forest licences or other forms of agreements. Can the minister advise whether that commitment has been achieved? Have we actually reduced the cumulative small business undercut over time?

Hon. J. Doyle: I'll read from an answer to the question that the member has asked. A plan for selling 2.1 million cubic metres of small business undersold some volume was developed and implemented. As of March 31, 2000, 1.95 million cubic metres or 93 percent of the identified undersold harvest had been sold. The remaining 0.154 million cubic metres is planned for sale in fiscal 2000-2001. The 2.1 million target will be met.

G. Abbott: That's good, but what I was looking for was a sense of whether the accumulated small business undercut, which I think, as I recall in estimates with the former minister last year. . . . The cumulative small business undercut peaked at somewhere around -- and I may well have this wrong --

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eight million to ten million cubic metres or something in that area. What I'm looking for is some indication of whether the cumulative figure has actually been reduced over the period.

Hon. J. Doyle: There was a large undercut, member. There was 2.1 million cubic metres of that delivered.

G. Abbott: Perhaps there's a ministry person somewhere struggling to come up with this figure for me, but I know that the plan was to gradually try to draw down that cumulative undercut over time. It had built up particularly in the years around '97-98. The plan was to reduce it over time.

I think the minister is pointing out that 2.1 million cubic metres was the volume that they hoped to reduce the cumulative undercut by in the past year. Again, I just want to get a sense of where we are at in terms of that overall figure. If it's not available, I'll just accept that as an answer, and the minister can provide it when staff can generate that for us.


Hon. J. Doyle: Some numbers I don't have with me, and we'll get that. Some of this also went into the timber supply review, hon. member.

G. Abbott: Yes, that's certainly the case. I'm sensing that the figure I'm looking for is not available. The minister can advise me of it as we go on.

The second bullet under "Initiatives for Small Business": "Tendering any current year [small business] undercut not sold by the [small business] agency through non-replaceable forest licences or other forms of agreements." There's a couple of elements to this: (a) whether the government still sees the non-replaceable forest licence as the way to deal with this. . . . How many have there been? Has that part of the program been successful to date?

Hon. J. Doyle: The answer is yes.

G. Abbott: Good. I appreciate the agreement. What proportion of the small business undercut has been sold through the non-replaceable forest licence route?

Hon. J. Doyle: Under section 13, in the last two years 800,000 cubic metres have been sold.

G. Abbott: What proportion of that has been sold by direct award, and how much through competitive bidding?

Hon. J. Doyle: Almost all of it has been sold competitively.

G. Abbott: Moving on to the remanufacturing sector: "Government and industry will work together to achieve the goal of 5,000 direct and 5,000 indirect jobs, which will be created through increasing availability of sawn lumber to independent remanufacturers." Is it possible to even get a sense of the numbers that have actually been created?

Hon. J. Doyle: The advocate said in his annual report that the job numbers had been met. But I'm sorry; we don't have the actual report with us. We'll get it to the member.

G. Abbott: If the goal of 5,000 direct new jobs in the reman sector has been achieved, would we expect those to show up in the SEPH figures among the forest industry -- all sectors?

Hon. J. Doyle: Yes, they would be part of the SEPH numbers.

G. Abbott: I presume, then, it would also be fair to deduce that there has been a shift in employment in the forest sector, such that either primary or some other area of forest sector employment has contracted and the reman sector has increased by that amount. Is that correct?


Hon. J. Doyle: We don't have anything to compare those numbers, but I do know that in the Golden forest district, when I attended the Value-Added Wood Forum for the whole Kootenays -- I'm including part of the Boundary area and the Okanagan area -- some numbers that we had there showed a very significant increase in value-added sector forest jobs.

G. Abbott: The point I was attempting to make is -- and it may well be true -- that we have seen, through a variety of initiatives, the creation of some additional jobs in the reman sector. But if we take the overall survey of employment, payroll and hours that's generated and is produced in the Wouters report. . . . Clearly, if there has been growth there, there must have been contraction in some other area of forest sector employment, because overall the number as we talked initially is down slightly. I'm presuming that it is merely logical and reasonable to assume that either the primary or some other sector had seen some decline over that period -- correct?

Hon. J. Doyle: Not necessarily. I think we're talking here. . . . What we're trying to do is add more value to the wood that is cut.

G. Abbott: I understand that. The concept in value-added or remanufacturing is that as one moves that piece of wood through more and more elaborate systems, more employment is secured from it. I understand that concept.

The point I'm making here is that the survey of employment suggests that over the period of '96 to '99, there has been a decline of about 2,500 forest jobs. If over that same period we've in fact seen a growth in the remanufacturing sector and in the value-added sector, which there may well have been -- I suspect there probably was. . . . As that grew, there must have been a corresponding contraction in some other area of forest employment, otherwise the figure that we see under survey of employment in Mr. Wouters's report would in fact show an increase of a few thousand. Correct?

Hon. J. Doyle: No, I would disagree with the member across the floor. SEPH doesn't pick up all the jobs in the value-added sector. A good example would be Canwood, the furniture-making company in Penticton.

G. Abbott: Does the minister know for a fact that those jobs aren't picked up? At what point does a remanufacturer of wood products not become noted in the SEPH report for the forest sector?

[ Page 15334 ]

Hon. J. Doyle: We're not talking about remanufacturing; we're talking about a finished product in this case. For instance, this company in Penticton is not part of the SEPH numbers, because they're not in value-added; they're in remanufacturing.

G. Abbott: Okay. Then that would be part of the source of the confusion, because we started out talking about the remanufacturing sector and the goal of 5,000 direct jobs, and the minister assured me that those had been met.

My point is: if the remanufacturing jobs are showing up in these numbers, then clearly there has been a contraction in some other area. I don't want to argue about it all day. It's pretty darn obvious that if we have seen a slight overall reduction in the number of jobs but one of the sectors that comprise that overall figure has grown, then clearly another -- or all the others -- must have contracted in some degree.


Hon. J. Doyle: I guess we could debate this all day, and we've talked about it for some ten or 15 minutes now. It's not always true that the primary sector has come down and value-added has come up. But at the same time, I know that in my constituency, for instance. . . . By and large, it's getting back to that value-added wood firm in the Kootenays some weeks ago. In some areas of the Nelson forest district, there has been a reduction in primary jobs, and they have been picked up by the value-added sector. I think total jobs are pretty well equal in numbers to what there was some years ago.

G. Abbott: We'll move on. Again, we talked about this last year, in terms of our review of what was going on with the jobs and timber accord -- alternative work arrangements. It's my recollection -- and the minister can correct me if I'm wrong -- that the alternative work arrangements section of the jobs and timber accord simply did not proceed and that consequently the target for 3,000 jobs under the alternative work arrangements was never met either. Correct?

Hon. J. Doyle: This is something we can agree on. That is correct.

G. Abbott: In fact, we've agreed on most things through the discussion -- at least recently. That might not have been characterized by it, but. . . .

Just to conclude our discussion here of the jobs and timber accord, frankly, I was -- as I'm sure the minister is aware -- skeptical of the jobs and timber accord from its inception. It is premised on the notion that government can create, or cause to be created, changes in the direction of the forest economy. The former Deputy Premier -- the Minister of Energy and Northern Development, I believe -- probably best put this style of command-and-control economics that was incorporated in the jobs and timber accord up at the Northern Forest Products Association meeting last year, when he decried Soviet-style forest policy.

I think the jobs and timber accord does claim to be directing the forest economy in a particular direction. It's based on the assumption that somehow we can take a lot of variables that exist in this cyclical industry of forestry and that we can manipulate them in a way so that we get more jobs -- or we do this or do that. I know that when the minister gets up, he will argue: "Well, we've had the softwood lumber agreement; we've had the problems in Japan and so on." There's no denying that.

But the fundamental point here is that before governments lay out ambitious job creation plans that are directed out of Victoria, they have to take account of the fact that frequently there are variables, domestically and internationally, which we can't control. And that is particularly true in the case of forest products.

Therefore I think this accord was based on some very faulty premises. I don't know whether at some point the government will disavow the direction that's contained in the jobs and timber accord. I don't know that. That really goes to the heart of some of the politics that exist between the former Premier and the current Premier, the current government and the leadership of the former government. That I don't know. But clearly there are some elements in here that are consistent with what the former Deputy Premier describes as a Soviet style of forest policy management.

Now, I will give the minister this opportunity to provide us with the current view of the government around the jobs and timber accord. I know it's not something that the government routinely brags about these days -- and not surprisingly. The job creation numbers just aren't there, and we've been talking about that today. A number of the initiatives that were outlined in it, as well, simply didn't proceed for perhaps, in some cases, good reasons.


I think all of this underlines the critical importance of governments understanding the critical role of the marketplace in determining the direction of the forest economy, as opposed to a government trying to intrude and saying: "No, this is what we are going to do, and this is what the result is going to be." The danger of doing that, as I've said, is that there is a whole range of variables, both domestic and international, which can very quickly intrude on those ambitious plans.

I've probably said enough about that and have set out philosophically my concerns around the jobs and timber accord and the government approaches like it. I'll invite the minister to offer his candid assessment on the jobs and timber accord as well.

Hon. J. Doyle: When the jobs and timber accord was announced in the last four or five years, the Asian markets, for instance, had been strong for at least 40 years. Hopefully it wasn't wrong to presume that we would continue to ship roughly the same amounts to Asia. The member said I'd mentioned Asia and other things. I did mention Asia, but hopefully Asia. . . . We were assuming those markets would continue -- as they had for many, many years -- to be strong.

While it is true that the targets identified in the jobs and timber accord were not met, partially because of just what I mentioned, many good things did come from the accord. The mill closure review, for instance, is another item I just mentioned. The accord was a starting point for other government initiatives, including code and stumpage changes, the forest action plan and even the forest policy review. The majority of the accord's initiatives have been implemented and have supported or created forest jobs.

G. Abbott: Do the job commitments contained in the jobs and timber accord remain the goal of government?

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Hon. J. Doyle: We would all like to see job increases, and actually we're getting back close, I think, to the 1996 levels right now as we speak. We do see, in the member's constituency and mine and in other parts of the province, new initiatives starting up and jobs being created in many, many communities in value-added and secondary industry. No doubt jobs do come one at a time, and there are many new jobs being created out there at the present time.

G. Abbott: Does the government have today a greater market orientation, as I'll term it, than what were the philosophical underpinnings of this back in 1996?

Hon. J. Doyle: Government does work closely with the industry. I think some of the initiatives that have happened over the last few years have proved that. It has worked well, the government and industry working together, as far as some of the savings that have been identified -- the roughly $1.1 billion that has been saved, which has helped the forest companies and communities and workers throughout the province to get mills up and running again and, through that, employ people and make sure that we have healthy communities. For instance, stumpage that is collected by the Ministry of Finance last year was higher than what was projected. I think we're on the right track. Government always can learn; I guess the opposition can always learn too. We all can learn from mistakes that have been made or that might be made tomorrow.

G. Abbott: Working with industry is certainly good and commendable. I sense a reluctance on the part of the minister to characterize the government's approach with respect to a market orientation or a market approach. Perhaps I'll just test that proposition in a more direct way by saying: is the government contemplating the creation of what might be termed "jobs and timber accord 2" or "son of jobs and timber accord"? Is this going to be a one-of-a-kind thing? Or does the government anticipate, should they be fortunate enough to remain in office on December 31 of 2001, the opportunity to have yet another jobs and timber accord?


Hon. J. Doyle: When we're re-elected, we'll cross that bridge when we come to it. I think we have done a good job of working with the industry and with communities across the province. There's a very good relationship. I've always felt, in different offices that I've held in elected office from municipal to provincial over the last nine years, that it is important to work with communities. Keeping the doors open on all sides is very important. That is something I intend to do as Minister of Forests.

G. Abbott: Again, this is not something I propose to dwell on. Just so the historians note it, there does appear to still be a reluctance on the part of the current government to question the orientation of the jobs and timber accord. I believe that clearly there has to be a broader sense in the development of provincial policy about the urgency of meeting the demands of the marketplace. That is not reflected in that document, which I think. . . . I'm glad the former Deputy Premier has returned. He provided us with that. . . .


G. Abbott: Oh, that's right -- former Premier. Although I was. . . . The famous quote that you provided was at a time when you were still the Deputy Premier. Sorry, hon. Chair -- the Soviet style. . . .

An Hon. Member: Soviet-style forest policy.

G. Abbott: That's right.

He's forever done us the favour of characterizing an orientation. I think we do have to move away from that, and I hope we see more movement in that direction.


G. Abbott: Sorry. No solution. Oh, okay, thank you. Clearly you don't either.

We can move on, I think, unless the Forests minister has anything he wishes to add with respect to the jobs and timber accord before we move on to the issue of fibreglass.

Hon. J. Doyle: I'm pleased to talk about markets and supply of timber. This government I think has a very, very good record of having worked to make it possible to retain the markets that we have through some of the work that we've done -- the land use plans across the province, the Forest Practices Code. If the member or anyone else in this House thinks that was not an important brick as we build the walls to make sure that we do eventually get the certification. . . . Without some of the things we've done in the last nine years. . . . Sometimes there has been some pain, but hopefully it was short-term pain for long-term gain.

G. Abbott: If we can move on to the issue of fibreglass. Really, here, I think we're focusing on the current initiative of the government around the cost-driver initiative. Perhaps what I'll do initially here is invite the minister to advise the House of what the major components of the cost-driver initiative are from the ministry's perspective.

Hon. J. Doyle: The initiative is all about continuing to work with industry to make sure that by working together, we can find continued savings out there and at the same time protect environmental land use plans, which ultimately means we protect our markets.

G. Abbott: Can the minister identify for me some of the principal components of that initiative?

Hon. J. Doyle: I'm reading from a document prepared by the ministry on this cost-driver initiative. In the ensuing year, 830 separate streamlining or cost-efficiency measures were put forth as potential cost-driver initiative issues for resolution. By April 1 of this year over 670 of those issues had been addressed by ministry staff, with approximately 65 percent resulting in a positive business improvement and the remainder requiring simply clarification of the requirements. I'm also led to believe that at least half of these streamlining initiatives came from ministry personnel -- were initiated by the Ministry of Forests.


G. Abbott: I was hoping to get at some of the specific things that are currently being worked on between industry and government. But maybe I'll try to move some of the

[ Page 15336 ]

discussion ahead myself here. One of the areas where I think there is very considerable opportunity in the future to see some improvement on the cost side and indeed on the operational side, in terms of avoiding delays, is around professional accountability.

One of the things I hear over and over again is the complaint from professional foresters who say -- I know there have been some steps taken to address this, but clearly some more are needed -- that they submit a silviculture plan based hypothetically on, say, 65 percent Douglas fir, 20 percent pine and whatever of cedar. They'll submit it, and sometime later they will get back a notice that it wasn't acceptable, that it should have been X percentage this, X percentage that. And it tends to be an issue, apparently, where one forester is second-guessing the judgment of another.

Now, as I understand it, the Professional Accountability Task Force was launched, which was to deal with some of these issues. Can the minister advise me when the task force was commenced, what issues it embraced and what the current status of that task force is?

Hon. J. Doyle: The task force was formed; it is no longer in place. As far as some of the recommendations that were made, I can get them to the member. I don't have it right here in the House.

G. Abbott: Does the minister agree with the general proposition that we should embrace the notion of accountability and responsibility in the hands of professional foresters in dealing with issues like silviculture plans and harvest plans? Again, I think one of the things we need to get around, in this province -- or get over -- is the notion that government needs to second-guess the professional opinion of foresters. Again, we don't have teams of doctors that second-guess the diagnoses of doctors in private practice. We don't have teams of lawyers from the government that second-guess the legal opinions generated by lawyers in the province. Similarly, given the training, the responsibility, the ethical requirements that face professional foresters, I think what we need to do is move beyond the notion where we think we need, as a government, to second-guess the silviculture prescriptions of professional foresters or the harvesting prescriptions of foresters. Does the minister agree with that proposition?

Hon. J. Doyle: I agree, by and large, with the member across the floor. One of the problems is that there's not a governing body that regulates all this -- the professional foresters in the province. If they had a regulating body, that would assist us to get to where we'd all like to be.


G. Abbott: Is the ministry working with the Association of B.C. Professional Foresters to try to bring about some resolution of that particular situation?

Hon. J. Doyle: We are working with the private sector -- public and private working together -- to see if we can attain that goal that we'd all like to get.

G. Abbott: Are there any time lines that we can note with respect to putting that measure in place?

Hon. J. Doyle: There have been ongoing discussions, but we need to do some more work to make sure that the public accepts the changes that would be made as far as public values and what they want out of this. I think we will get there.

G. Abbott: We had some discussion of this the other day when I asked the minister to clarify some of the discussion we'd had on the first day of debates around whether the idea of public distrust of professional foresters, or the industry, was in some way going to inhibit necessary changes with respect to professional accountability. The minister assured me that it would not.

Is that still the case? Are we going to be able to proceed in a way that seems to me to be entirely logical? I mean, obviously there's always some distrust of the legal profession; there's always some distrust of the medical profession. There's always that in the public mind -- some distrust of where professionals may take us in some circumstances. But again, what we're talking about are people who are well trained to make the realm of decisions that are part of their jobs. It seems to me that if there is some limitation, in terms of professional accountability, around having a self-regulating body to deal with, we should get on with putting into effect the statutory arrangements we need to achieve that goal.

Hon. J. Doyle: We'll be better able to defer to the private sector foresters once we have completed land use plans and landscape unit objectives.

G. Abbott: That may or may not be true. I don't see that as being central to the issue here, but I'm not going to debate that. I think it's critical that we move this part of the reform of the forest policy framework along, and I think the changes that I've suggested are critical to doing that. We've discussed this at different points in our debates, and I don't want to get preoccupied with it at this point. We're trying to get a sense of where we're going around the cost-drivers.

One of the concerns that's occasionally and forcefully raised with me is the issue of archaeological assessments. I can't claim to understand all the terminology here or what's involved in every case. But as I understand it, I guess companies are obliged to do these archaeological overview assessments. There's some concern that those are not really effective and that frequently they simply end up resulting in a request for an archaeological impact assessment. Again, the expense and difficulty around that is something that obviously is producing some frustration. Where are we at in terms of coming to grips with that particular issue?

[T. Stevenson in the chair.]

Hon. J. Doyle: These assessments are new. It will take some time to refine the process so that we make sure that we do move along and that there is no duplication, if at all possible, and we can move through these assessments as quickly as possible when they do occur.


If I could get back to the former question from the member, as far as professional foresters, I look forward and the ministry looks forward to working with them. But I think that on any of those issues we have to make sure that we don't get ahead of the people or the public out there. I think I did say this before, and the member and I generally agreed on this, I think we can work to make sure the professional people

[ Page 15337 ]

in the province -- they're all honourable people. . . . We can work along. At the end of the day, the figures that are presented by one professional versus another. . . . We won't need to get to second opinions or third opinions, except in a small number of cases.

G. Abbott: One of the cost areas that is only partially in the realm of provincial jurisdiction is over fish and fish-bearing streams. Again, one of the concerns that is frequently heard is that when it comes to fish and fish-bearing streams, we get into some interesting regulatory jurisdictional issues where we could have, in some instances, the involvement of the Ministry of Forests; the Ministry of Environment, Lands and Parks; the provincial Ministry of Fisheries; and then the DFO, federal government fisheries, as well. Are we moving in some kind of methodical way towards local area agreements that would resolve some of those jurisdictional management issues?

The Chair: I just want to let the committee know that in the precinct this afternoon are 50 grade 6 visitors from East Ridge Elementary School in Woodinville, Washington. They are accompanied by 16 adults. They're here to have a look at the parliament buildings and understand comparative government and local history. They're accompanied by Ms. S. Thomason, a parent. I would hope that the House would make them welcome.

Hon. J. Doyle: The question from the member before the introduction. . . . We are doing our best to work together and make sure there's not too many cooks here making the broth. For instance, we are working at the present time with DFO to make sure that we do work together, so you don't have to go through federal and then provincial or vice versa.

G. Abbott: Is the Ministry of Forests taking a lead or coordinating role in terms of putting together what might be called local area agreements, to really clarify, to avoid overlap and duplication, and to ensure that in each instance it's clear who will be taking the lead in terms of being the appropriate regulatory body? Or are there still a lot of instances arising where multiple agencies think that they have jurisdiction, thereby frustrating the application process?

Hon. J. Doyle: In areas of the province there are local area agreements where ministry officials do work together. I know of cases throughout the province. Sometimes a Ministry of Forests office has Environment officers, so they don't have to go to another shop to find out some information that could be found out inside that ministry office.

G. Abbott: Is it the hope of the Ministry of Forests that ultimately this can evolve into what I guess might be informally termed one-stop shopping around that part of the regulatory framework?

Hon. J. Doyle: That's a goal that we would like to attain very much, hon. member, as far as the provincial agencies. We cannot speak for DFO in that respect, but as far as provincial agencies, it would be our goal to hopefully have one-stop shopping.


G. Abbott: Is that one-stop shopping initiative one that is currently in the hands of the deputy ministers of the applicable ministries?

Hon. J. Doyle: The answer is yes. At the assistant deputy minister level and out in the regions, there is a lot of that happening already.

G. Abbott: I'm presuming that the one-stop shopping initiative would embrace, at minimum, the Ministry of Forests; the Ministry of Environment, Lands and Parks; the Ministry of Fisheries; and the Ministry of Energy -- provincially. Is that correct? Is that an inclusive list, or are there other participants that I'm not aware of?

Hon. J. Doyle: I would agree with the list that the member mentioned -- and also now, more often than not, Tourism.

G. Abbott: Does the committee report out at regular intervals to the applicable ministers or cabinet? When is it anticipated that there might be some definitive results from the discussions?

Hon. J. Doyle: There is no formal committee, but there are just ongoing working relationships -- assistant deputy ministers and people in the regional offices working as best they can to make sure we get the number of roadblocks down to one.

G. Abbott: So it should not be styled, then, a committee. It is rather, perhaps, a working group where the assistant deputy ministers are trying to work through problems on a case-by-case basis as opposed to redesigning a process, which would then, perhaps, be considered by government. Or is the latter a part of the discussion that's going on?

Hon. J. Doyle: Assistant deputy ministers and people in the regions get together on a case-by-case basis, meeting to try to come to a solution together, as government officials, on an issue that may be out there with someone in the private sector.

G. Abbott: So if any structural change was being anticipated around one-stop shopping or, the more elaborate phrase, single-window regulatory approvals. . . . If substantative changes to the structure of government were to go in that direction, this is not something that would be expected of the assistant deputy minister working group, although they might add their experience to it. Is that notion -- that there could be one-stop shopping, single-window regulatory approval. . . ? Is there anyone in the Ministry of Forests -- i.e., the deputy minister, in consultation with his counterparts elsewhere -- looking at a structural change of that character?

Hon. J. Doyle: This is part of the cost-driver initiative we're talking about. We've communicated with COFI to ask them to prioritize items they would like to see on the list, in whatever order they would like to see them dealt with.


G. Abbott: In an attempt to paraphrase -- I frequently do this, and perhaps unfairly so. . . . As I understand it, from what the minister said, the Ministry of Forests is open to suggestion and discussion around the concept of single-window regulatory approval -- i.e., one-stop shopping. They are awaiting proposals -- suggestions from the industry or others around how that might be achieved. Is that a fair summary of where we are at?

Hon. J. Doyle: At this point, there are 160 issues outstanding on the cost-driver initiatives that we spoke about earlier. We are waiting for industry to prioritize those 160.

[ Page 15338 ]

G. Abbott: Can the minister offer any response, though, to the question I posed about the single-window approval?

T. Nebbeling: Mr. Chair, I ask leave to make an introduction.

Leave granted.

T. Nebbeling: There is in the gallery right now a group of students -- grade 5 students from Aldergrove, I believe. On behalf of the member for that riding, I would like to ask the House to make them welcome.

Hon. J. Doyle: This item that we're discussing in the House now is one of the 160 items that is outstanding. So maybe industry. . . . There may be others that can move along faster than this one we're talking about right now. That's why we're asking industry for their input on this list. Maybe they will go to some other number or get back with a different list or priority, as they see it working out there in the field.

The Chair: Minister. . . . Member.

G. Abbott: Thank you. My heart always just skips a beat when you make that tiny little mistake about minister.

The Chair: I'm sure it does.

G. Abbott: I'm sure the anticipation is in the right direction and certainly is borne of a sound heart.

The Chair: No comment, member.

G. Abbott: I thank the minister for the clarification around that. I look forward to seeing and hearing what the results of that will be down the line.

One of the final issues I want to discuss in this section -- and the minister may want to highlight others of the 160 remaining potential cost-drivers that are under discussion -- is around the green-up requirements under the code. In the view of some, there needs to be more flexibility around green-up or free-to-grow requirements -- that the strict application of the current guidelines is not something that meets the test of common sense and has the effect of, in some cases, adding to the cost of harvesting. Can the minister confirm that that is one of the 160 elements still being considered for discussion, and what the status of that is?

Hon. J. Doyle: The answer is yes, we are working on that, and we're also willing to look at other proposals on this.

If we could get back to the little chat the member across the floor had with the Chair, I think it did lead to some potential for the member behind him getting all excited and maybe smashing up his desk, so it might be a little bit dangerous to do that again.


G. Abbott: We are looking at the green-up standard, and we've presumably. . . . Is there any time frame around how this will move ahead, or is the ministry awaiting further guidance, suggestions or advice with respect to exactly how this new flexibility might be achieved?

Hon. J. Doyle: As we mentioned earlier, 75 percent of the 830 separate items have been dealt with. There are 160 left, and we're hoping to get the 160 that are left dealt with inside the next year, if possible. We're working together with industry prioritizing their thoughts on which should be one, two or three.

G. Abbott: I would like, then, to move along to discussion of stumpage issues. I expect that that would require a modest change of staff on the part of the minister. I know, just for the minister's information, that one of the members on this side has some questions around agricultural leases. Now, I don't know whether that is a very specialized piece of knowledge that will be required, but I just wanted to give a heads-up on that.

We've had some previous discussions of stumpage and issues around stumpage, particularly in the context of the Wouters report. Quite apart from that report, is the government moving, either on the coast or indeed on the coast and in the interior. . . ? Is the government in the process of reviewing potential changes or reforms to the existing stumpage system in British Columbia?

Hon. J. Doyle: We are looking at options to do with the stumpage. They're mentioned in the Wouters report, as the member mentioned. But we haven't made any decisions yet, until we get further input. No decisions have been made yet.

G. Abbott: How is the ministry's review of the stumpage issue being conducted? Are there particular members of ministry staff that are seized with looking at the different elements in the stumpage structure in British Columbia? And are they expected to report back to the minister at some juncture with respect to what changes might be considered?

Hon. J. Doyle: The answer is that we do it internally, but we also do work for the industry on this initiative.

G. Abbott: Who internally is charged with that?

Hon. J. Doyle: This issue is handled by my deputy and also by Mr. Howard, who is sitting here to my right.


G. Abbott: Apart from the internal discussions, are there stakeholders that are engaged in terms of reviewing options around stumpage?

Hon. J. Doyle: At this stage it is informal, but if we decide to move ahead, there will be formal discussions.

G. Abbott: One of the features of the Wouters report is that he very much draws a distinction between the coast and the interior around stumpage issues. Of course, there already is a distinction between the coast and the interior around stumpage issues. But his proposal is to further add to that distinction by going to a transaction-based system -- or proposing, at least, a transaction-based system -- for the coast. Is that, broadly speaking, the direction of the ministry as well? Or is the ministry still in consideration of changes which would be common to both the coast and the interior appraisal areas?

Hon. J. Doyle: All options are on the table at this time -- coastal, interior, all areas in the province.

[ Page 15339 ]

G. Abbott: To summarize, the discussions are informal at this time. Presumably, as the discussions advance, they may be formalized by drawing in stakeholders such as the Council of Forest Industries or others who the minister might find to be appropriate for those discussions. Is that correct?

Hon. J. Doyle: That is correct. That's who is involved and who would be involved.

G. Abbott: My colleague has some questions around agricultural leases, if we could entertain them at this time.

J. Wilson: For a considerable time now I've been asking that the ministry review the stumpage issue in relation to agricultural leases. To this point, it would appear that those requests have been totally ignored. I'm wondering if the minister has any intentions of reviewing this. It is a fairly serious issue. The volume there is a fraction of a percentage of the total cut, and some people have been put in really precarious positions because of the stumpage assessment that's carried out.

Hon. J. Doyle: The answer is yes. The Ministry of Forests presented a paper to the Agriculture Committee, and we're waiting for that to proceed.

J. Wilson: Since it's in the works, could the minister give me a time frame when we can expect to see some movement here?

Hon. J. Doyle: We're waiting for advice from the select standing committee. Whether the member is on that committee or not, I can't say; I'm not sure.

J. Wilson: Yes, hon. Chair, the minister is right. However, the committee reporting will probably not come in a time frame when it will be able to circumvent some of the problems which are arising today. What I would like is a commitment from the minister that this could be reviewed. It is his ministry, it is his call, and he's quite capable of reviewing it without waiting for a recommendation from a committee. That's what I would like to know.

Hon. J. Doyle: It's the feeling of the ministry that it would be imprudent to go ahead until we hear back from the committee, of which you're a member. Maybe you can do what you can to get this committee to work as fast as possible to get the recommendations back to the ministry.


J. Wilson: I would love to be able to move mountains, but it's not feasible at this point.

I would like to give the minister an example. This is his ministry. I have a constituent with an agricultural lease that is infected with pine beetle. The ministry has set the stumpage at $68; the market value of the wood is between $70 and $80. That means the holder of the lease would lose approximately $10 a cubic metre to get rid of that wood.

The Ministry of Forests has told the holder that they have until July to remove the bug-wood from this lease. The holder of the lease asked for a stumpage reduction. The ministry said no. On top of that, what they said is: "If you don't do it, we will send in one of the major licensees to do the harvesting." I am sure that if they do that, the stumpage will probably come back at $3 or $4 or $5 a cubic metre.

Why would the Ministry of Forests not act in good faith and reduce the stumpage on the infected wood? It's for everyone's benefit. It will stop the spread of the bugs. I know of other similar circumstances, where the stumpage appraisal on wood that has pine beetle in it has been reduced to the $20 range. I'm wondering why the ministry, in this case, won't consider all these factors and take immediate action to help this leaseholder out.

Hon. J. Doyle: What I will commit to the hon. member on this individual case of his constituent is that when my estimates finish, I will be happy to sit down with the member and bring staff into a meeting in my office to see if we could work this thing through.

J. Wilson: I thank the minister for this opportunity. He can rest assured that I will take him up on it.

G. Abbott: While we have the appropriate staff here. . . . I was going to do it under the forest health section, but we must do it now, with the appropriate staff here. What is the province's policy around the bug-killed or insect-damaged wood? Obviously there are different degrees of damage. At some points, if the wood is harvested quickly enough, it's not checked or discoloured in the way it is subsequently. What is the ministry's policy with respect to the stumpage on that wood? Is there one overall rate, or does ministry personnel somehow do an assessment of value?

Hon. J. Doyle: The degree of damage to the wood, as to how long it's been standing out there -- the problems with the timber -- affects the stumpage that is paid by the company.

G. Abbott: The reason I ask is that obviously there's a lot of volume being dealt with currently in some parts of the province under the forest health umbrella. Is it left in the hands of district staff, for example, to make an assessment of an area and form some conclusions about whether the wood is outright salvage or whether the harvesting is being done in time to avoid any discounting of the value of the wood? How are those kinds of decisions reached, and how is that then translated into the stumpage rate that is applied?


Hon. J. Doyle: The ministry tries to see that the tree is harvested as soon as possible, before there's too much damage done. Also, as I said, part of the other answer is that at that time the degree of damage is taken into consideration when the stumpage is set.

G. Abbott: Perhaps the question is an unfair one, because we're talking at this point about a huge area. We're talking of a range of damage from, I guess, peripheral area that is likely to be infested right down to trees that probably have been severely damaged already and perhaps are just the barest of salvage.

Again, given the magnitude of the problem that's facing the province right now, I'm assuming that for somebody it's a pretty darn big job trying to sort out how to bill for it. This is not a trick question, and I'm not trying to trap anyone; it's

[ Page 15340 ]

information. How would you go about dealing with a situation like that, given the magnitude of the problem that confronts. . . ? Do we have a situation where the lion's share of the wood is billed at $2.50 a cubic metre or 25 cents a cubic metre? How is that worked out so that obviously it's fair to the Crown and to the licensee involved?

Hon. J. Doyle: Stumpage is set by ministry staff for a cut permit area. So there's no extra work as far as ministry staff, whether it's an area that's affected by bugs or not.

G. Abbott: Again, either maybe there's a misunderstanding of my question, or perhaps I'm misunderstanding the character of the problem that we have. As the ministry monitors the expansion of the mountain pine beetle problem across British Columbia, presumably on occasion it is finding areas where there might be, for example, five hectares of new infestation. I'm also presuming that when they discover that, they try to set up some kind of harvest plan for the area so that the infestation is dealt with and the five hectares doesn't grow into 50 the subsequent year.

So they find the area. Do they offer it up? Well, I guess it would depend. In some cases, they might offer it up for competitive bid. But I'm presuming that in most instances, that's not the case -- that in most instances it might be in a licensee operating area. How is the value determined? I would expect that it would not be the full value that would normally be ascribed to that area. How is it arrived at?

Hon. J. Doyle: The area -- the five acres the member is mentioning -- is located by the industry in their cutting area. They apply for a permit; staff get the data from the company. They work together, and at that time the stumpage is set.


G. Abbott: That satisfies my intense curiosity with respect to that matter.

Is there an ongoing effort by the ministry to do comparisons? Again, we're not talking bugs now; we're back to regular stumpage. Is there any kind of ongoing effort by the ministry to compare where we are in terms of stumpage rates with those in Alberta, Ontario or Quebec? Do we do that? Or are we operating domestically here without that information?

Hon. J. Doyle: No, we don't do comparisons with the neighbouring provinces. One of the reasons is that the species mix here is quite different than you would find in the other jurisdictions that you mentioned.

G. Abbott: Occasionally the IWA treats me to a copy of their comparisons. Obviously, based on the comments around species mix and so on, I expect the ministry would take the position that these are a comparison of apples and oranges and that the validity is strained at best. Would that be a fair characterization?

Hon. J. Doyle: We are aware of comparisons in other jurisdictions across the country. I also sit down with Mr. Haggard or other people from the IWA on a regular basis. At the end of the day, it is very, very hard whenever you are comparing different species in different jurisdictions. You get wetbelt; you get many, many other areas in this province that possibly some of the other provinces don't have.

R. Neufeld: I have a few questions. I'll go around a little bit here, but it has to deal with the Empire Valley Ranch. I usually ask every year. I don't suppose. . . . In fact, I would be surprised if the ministry had the numbers with them. I would like to know the total cubic metres of timber harvested in Fort St. John, both coniferous and deciduous, and what the status is of the lands in Fort St. John that were traded for the Empire Valley Ranch -- what state they're in, whether they've been turned back to the Crown and the Crown is now reforesting them and just where that whole issue is at.

Maybe I should sit down. The minister may have that information at his fingertips, and I'll just get his response.

Hon. J. Doyle: The question that the member said he has asked more than one time in this House on the Empire Valley Ranch and the status of it. . . . I don't have that information with me right now, hon. member, but I will get it to you.

R. Neufeld: I appreciate that. I think that kind of covers that part of the Empire Valley Ranch issue.

I have one other question about the Empire Valley Ranch. As I recall, there was a court action brought against both the Minister of Environment at the time and the Minister of Forests at the time, who is not the present minister. I know that you can't respond for the Minister of Environment. But is there still a court action pending against the previous Minister of Forests?

Hon. J. Doyle: I don't have a definite answer right now. We think there is a case, but I apologize again. I'm saying that I don't have the information with me, but I will get it to the member.

R. Neufeld: I await that.

I have one further question in regard to trade of timber for land that the province may want to protect. It seems as though it happens on quite a regular basis, more regular than the public knows about. I want to know if the Ministry of Forests is presently in negotiations with any other individual in trading forest resources for land that the government wants to protect at the present time. Are there any other trades going on right now?


Hon. J. Doyle: There are ongoing transfers that have been looked at. This ministry does not lead them; they are led by the Ministry of Environment. But there are some ongoing discussions as we speak.

R. Neufeld: I remember the Empire Valley Ranch deal quite well. It was the Ministry of Environment that led it, but Forests plays a huge role. Could I request from the minister that he provide to the opposition all of those lands -- through the Ministry of Forests, with Environment being the lead ministry -- that are anticipated for trade and the ones that were traded last year?

Hon. J. Doyle: I would be happy to do that.

R. Neufeld: When we are getting that kind of an answer, I've got to carry on and ask a few more. One other question. When the member asked the questions here a while ago about

[ Page 15341 ]

the agricultural lease issue and the stumpage, I don't know whether I misunderstood the minister or not. But maybe he could correct me. Did he say that the Ministry of Forests made a presentation to the Agriculture Committee and you were waiting for the Agriculture Committee's response to that proposal? Is that what I heard, or did the minister say something else?

Hon. J. Doyle: The ministry presented a paper to this committee that you're referring to.

R. Neufeld: I guess the grey hair is actually showing that my memory is not as good as it used to be. I sit on the Agriculture Committee, and I don't remember that paper. But I didn't get to all the meetings either. I will be interested in going back and reading that proposal from the ministry. As the member spoke earlier, it may take a while before that committee finally reports out. Maybe what we should do in the interim is respond. Because we have a fairly good position in that committee, we should respond to that proposal that the Ministry of Forests has put in place.

I would ask the minister if he would commit to the House now. . . . If we did that in the next little while, would the ministry look at speeding up the process of putting that kind of a recommendation into place? Will the ministry actually put into place the recommendation we put forward to the minister?

Hon. J. Doyle: If the committee speeds up the process and gets it back to us, we can be sure that we will get it processed sooner.

It is just terrible -- all this agreeing, hon. member, by you and me here today.

R. Neufeld: Just so we understand, we may not have the final report ready as the Agriculture Committee. But we may take that portion out, make some recommendations on it and give it to the ministry. That's what I'm trying to say. If the minister is agreeing to look at that seriously when we do that, I'd appreciate that very much. It is an issue not just in the member for Cariboo's riding but in my riding or any one of the other ridings in rural B.C. where there is farmland involved and there are forest resources on those farmlands.

Hon. J. Doyle: The commitment that I made is exactly what the member is saying. If he doesn't have a copy of the paper, we'll be happy to provide you with another one, hon. member.


G. Abbott: I'd be pleased now to move on to the Forest Practices Code discussion. I anticipate there'll be a modest change of staff here. I should advise the minister of what areas of the code I want to pursue in this section, because we have had considerable discussion of the code in a variety of contexts, including the Wouters report and others.

I'll have a few questions around the summary report entitled "A Review of Forest Practices Legislation, Regulation and Guidelines in Selected Canadian Jurisdictions," a publication that was provided to the ministry by Gary Bull and Associates, a group of forestry professors from UBC, primarily. I'll have a few questions on that. And the other element in the code discussion that I look forward to here is more information with respect to the code pilots that are underway in four jurisdictions in the province. I'll be seeking more information on that, just to give the minister a heads-up on what we'll be doing.

[J. Cashore in the chair.]

Hon. J. Doyle: That's as good as it gets.

G. Abbott: I'd like to start with the report from Gary Bull and Associates, which takes a look, comparatively, at forest practices legislation in different provinces in Canada. I've had an opportunity to read it, and I think it's a very interesting report. They don't frame some of their comments quite as provocatively as I would have liked. It would have been a great document for question period had they used rather more colourful phrases at points, but regrettably they don't do that. Nevertheless, I think there are some enormously interesting observations that they make in their paper.

Frequently we do get wrapped up in what's going on in the province of British Columbia and the regulatory structure that we've developed, and we don't get to look outside and see what other people have done or other jurisdictions have done to try to achieve, obviously, many of the same goals that we try to achieve in our legislation. So I think this is a particularly interesting and useful study that has been done. I was quite impressed by some of the observations, in terms of comparisons with other jurisdictions.

The most important comparisons I'll note for those who are not familiar with this document, and I expect many British Columbians aren't. It's a document that I believe we secured through freedom of information. It has not, I don't think, been released publicly yet by the ministry. Perhaps it has, but I don't believe it has. The jurisdictions that are looked at in the study are British Columbia obviously, Alberta to some extent, Ontario, Quebec and New Brunswick. It is interesting to look at how different provinces have structured their forest practices legislation.

Now, some of the points that are made, I think, are particularly compelling. We have done some things, according to this, in British Columbia which have not been done elsewhere. We have created in many respects -- and I'll go into some detail on that -- a more elaborate, more complicated, more involved forest practices management structure than exists elsewhere. For example, and I don't know if the minister has the paper with him, on page 15 of the summary report Mr. Bull and his associates make the observation: "Planning procedures and operational practices in the four jurisdictions" -- and I'll note the four jurisdictions outside of British Columbia -- "vary, but all tend to rely on guiding principles rather than strict rules and tend to be results-based rather than process-driven."

The report then goes on, for example, to note that in Ontario they have a Crown Forest Sustainability Act. It does not specify specific management processes but rather, presents objectives and guidelines. "In Alberta a simple statement of objectives is given, followed by standards which must be met and guidelines towards the achievement of the standards. The standards are clear and concise and the guidelines brief." That, I guess, as an introduction to this, is some useful commentary.


In looking at how we might reform the Forest Practices Code in British Columbia to move from a process-oriented

[ Page 15342 ]

code to a results-based and incentive-based code, we do need to look at the experience elsewhere. Ontario and Alberta certainly are not simple jurisdictions in terms of environmental management either. Like other areas of Canada, they seem to have been able to achieve a different balance than we have in British Columbia.

I'll invite the minister's comments with respect to that -- whether there are some important lessons, some important things that we can learn from jurisdictions outside British Columbia, other provinces. And where does the ministry currently sit in terms of analyzing and trying to implement some of the lessons that are pretty clear in the work provided to the ministry by Gary Bull and Associates?

Hon. J. Doyle: The ministry has had two senior staff working and comparing the Alberta and Ontario experience, and they will be reporting back to the executive next month.

G. Abbott: That's encouraging. I think there are some important lessons to be learned here. Hopefully the impressive work that has been conducted by Gary Bull and Associates will yield some fruit in term of regulatory improvement in the province of British Columbia.

There are just a couple of other portions of the report that I want to call to attention of the minister. I think it's really important to note these. I was quite fascinated to read this. When the university professors compared how strategic plan names and authoritative approval were developed in the different provinces, they note the jurisdiction -- whether a strategic plan is required and what the strategic plan approval and discretionary authority is in each of those jurisdictions.

For example, in Ontario, yes, a strategic plan is required. In fact, in all jurisdictions, including British Columbia, a strategic plan is required. In Ontario the approval authority is the Ministry of Natural Resources. Now, it's fair to note at the outset that Ontario has a different cabinet structure than we have in British Columbia. The Ministry of Natural Resources embraces what would in British Columbia be both the Ministry of Forests and the Ministry of Environment, Lands and Parks. But there is just the one approval authority. I hope the Minister of Environment, Lands and Parks doesn't get too nervous about this, but I'm sure she isn't.

In Alberta there is a strategic plan required but, again, one regulatory authority, the Ministry of Forests. In Quebec, again, a plan is required, and again there is one strategic plan approval and discretionary authority, the Ministry of Natural Resources. When we come to British Columbia, according to Dr. Bull and his associates, yes, a strategic plan is required. Strategic plan and approval and discretionary authorities are: Ministry of Forests, Ministry of Forests district manager; Ministry of Environment, Lands and Parks, Ministry of Environment, Lands and Parks designated environment official; and Ministry of Energy and Mines.


Again, I think it's a pretty clear example of how -- and the minister knows well that others have previously observed this -- there are perhaps too many authorities involved in providing those approvals in British Columbia.

I'll give a second example, and then I'll provide the minister with an opportunity to respond to both if he wishes. Again, operational plans. . . . This is for the information of the ministry: page 28 of the summary report, table 4.2, "Operational Plans, with plan name and approval authority." The table goes through the same five jurisdictions that we've been talking about -- whether an operational plan is required and, again, the discretionary authority.

In Alberta, yes, an operational plan is required. The approval authority is the Ministry of Forests district manager. In New Brunswick, yes, an operational plan is required. The approval authority is the Ministry of Forests. In Ontario, yes, there is an operational plan required, and again, just one authority, the Ministry of Natural Resources. In Quebec, yes, a plan is required. There is one approval authority, the Ministry of Natural Resources. In British Columbia, yes, an operational plan is required. The approval authorities are the Ministry of Forests district manager and the Ministry of Environment, Lands and Parks designated environment official, in conjunction with the Ministry of Forests DM -- district manager, presumably.

In British Columbia we have a more complex approval authority than we find elsewhere. Now, we may have evolved our regulatory framework over time for the best of reasons, but the fact of the matter is that we are doing some things in British Columbia in terms of multi-agency approval authority that are not being done in other jurisdictions. I'll be very surprised if anywhere in the world we have the kind of multi-agency approval authorities that we find in British Columbia. I understand that the current government even agrees with that proposition and is attempting to find ways in which we can streamline approval authority in British Columbia.

That's a very long-winded way of inviting the minister to comment on those, I think, very informative tables that are contained in the Gary Bull report to the Ministry of Forests. What does he make of what's contained in these tables? What's the ministry's view with respect to streamlining and simplifying regulatory approvals in the province?

Hon. J. Doyle: I think that in this province, hon. member, you would likely agree. . . . We've talked about the different areas. There's the coast, the wetbelt, the other areas of the interior, the north. They're all quite different. There are very diverse, complex areas in our province -- and I'm sure in other provinces, too, but maybe not to the same extent.

As I mentioned in my previous answer to the member, we have two staff working. They've been in other jurisdictions; they're going to report back to the executive next week. If there are any changes that can be made and still secure the environmental standards, etc., that we have in our province, we will surely look at them.


G. Abbott: I hope that enterprise bears fruit. I do think we have an inordinate level of complexity in our regulatory approval process which does need to be addressed. It goes back to our discussion -- probably the central theme of our estimates process here -- that the debate is not about whether environmental standards should be changed. That's not being requested by anyone. The debate is about whether those standards are being delivered in the most effective and efficient manner that we can. I think we probably have agreement on both sides of the floor that if there are more effective and efficient ways of delivering, we've got to look at them and put them in place. I look forward to seeing some fruit being borne from the process which the minister has outlined.

The report also contains, I think, a very interesting discussion of comparative timber harvesting practices in different

[ Page 15343 ]

provinces. Here I would suspect. . . . The minister can confirm this or certainly raise my level of understanding around this, because in respect of timber harvesting practices, clearly we have very different situations in different parts of the province, and I suspect it does make it very difficult to compare. Nevertheless, obviously that was part of the mandate that was given to Dr. Bull and his associates, because they do review the comparative harvesting practices in the different provinces.

Again, just of note, the different jurisdictions and the different maximum clearcut sizes in the provinces: Alberta has a 60-hectare average, 100-hectare maximum for deciduous and pine forests and 24-hectare blocks or 32-hectare strips for coniferous forests; New Brunswick has a 100-hectare maximum; Ontario, 260 hectares in the boreal forest, unspecified cut in the Great Lakes region; Quebec, 150 hectares; B.C., 40 hectares in the south coast and interior regions and 60 hectares on the north coast.

I'll invite the minister to consult his staff here. Obviously this is a complex and difficult thing to come to grips with. Could the minister take a moment and consult with his staff around what read his staff have taken with respect to the timber harvesting section of this? Is there also, with respect to this element of the report, some ongoing discussions within the ministry about how, if anything, the experience of those other provinces can be applied to British Columbia?

Hon. J. Doyle: The present average cut size in the province, as mentioned by the member from the report, is 40 to 60 hectares. That is the default size of cutblocks at the present. When higher level plans are in place, there could be changes made according to the terrain or where the cuts are. At the same time, I think many times the industry or the sector out there is reluctant to go to too large a cutblock, because sometimes they get pressure as a company from the public in that area or somewhere in the province.


G. Abbott: Could the minister tell me what, if anything, they believe the experience of the other provinces in this comparative study can tell us about what we're doing in British Columbia?

Hon. J. Doyle: In the code in the province, we will allow larger cutblocks where they are possible, to some extent, as I mentioned in my last answer. We will work with industry. We'll also be looking at this report and working with the committee of members, as I said, from senior executive members that are reviewing this report and working with other jurisdictions in Canada.

G. Abbott: Thank you to the minister for that explanation.

The code pilots we've talked about a little bit before. These are obviously pilot projects around ways in which the Forest Practices Code might be streamlined or in some way improved by the experience of conducting those practices in somewhat different ways. As I understand it from the minister's earlier comments, we have four code projects that have been undertaken in the province. One of those I know reasonably well; it's the Riverside project near Kelowna, a very interesting project.

Could the minister outline for me where those four are located? Well, let's just start with that, and we'll work from there.

Hon. J. Doyle: There are six pilots. One is the Cariboo Lumber Manufacturers Association; another is the Cariboo Woodlot Association. In the next one, Canfor is leading a project with partners. Riverside Forest Products was mentioned by the member. Weyerhaeuser has a project underway near Powell River, and there's the Bulkley TSA pilot.

G. Abbott: Obviously as the codes have been developed and approved, in each case, the industry and the province are looking for different elements in the code that can be improved. Can the minister tell me, for example -- he may not want to do this with all of them, or perhaps he can, if it can be done in a fairly economical fashion -- what the primary goals are of, say, the Riverside project? What are the elements in the code that are potentially going to be reformed by that project?


Hon. J. Doyle: The member mentioned -- and we talked about -- the one in Riverside the other day. I was made aware of that when I was up at the ILMA, I think it was last week. The Riverside Forest Products one, for instance is a project advisory panel consisting of stakeholders, public proponent and agencies in reviewing a draft detailed proposal that generally follows an ecosystem management model for strategic planning, linked to LRMP processes, with compliance being added against criteria. This model includes an emphasis on empowering licensed professionals to make operational decisions to be accountable for this item.

Another instance, Canfor and their partners. . . . The central purpose of this pilot is to link provincial regulation under the Forest Practices Code with ISO, CSA and FSC certification requirements. The proposal is to set objectives at the development plan level, with compliance via third-party audits against operational Canadian Council of Forest Ministers criteria and indicators. A public advisory group will soon be struck to provide public oversight to the project.

Those are examples of two of them, hon. member.

G. Abbott: The kind of thing that is potentially being embraced here in the code pilots, it sounds, would be -- and I hope the characterization is appropriate -- professional accountability, an attempt to see the authority properly in the hands of the professional foresters involved in designing the silviculture and harvesting management plans, and so on. In the case of Canfor, the dominant element would probably involve professional accountability as well, but with the linkage to certification and third-party audits as a way of, I presume, moving away from the monitoring and enforcement element in the current code. Is that correct?

Hon. J. Doyle: Professional accountability in each one, as the member is recognizing. . . . The whole six are a little bit different -- just to check out different methods or, ultimately, to get the certification.

G. Abbott: Could the minister advise what different elements might be found, for example, in the two Cariboo projects that will assist us in streamlining the code as well?

Hon. J. Doyle: The member asked about the two Cariboo plans. The Cariboo Lumber Manufacturers Association -- the purpose of this one is to cap the efficiencies gained through planning and public involvement and improvement based on the Cariboo-Chilcotin land use plan.

[ Page 15344 ]

The other one is unique in the respect that it is a woodlot association, the Cariboo Woodlot Association. This pilot's purpose is to replace the existing operational planning regime with a comprehensive management plan. Quality assurance is proposed through periodic audits that may include a public participation component.


G. Abbott: While obviously there may be some regional variation, there are still the two dominant elements there again: seeking streamlining of approval authority through professional accountability and the link to third-party audits and certification. These seem to be a common element in all of them, if that's not an unfair generalization.

Were there proposals made for code pilots in different parts of the province that were not accepted?

Hon. J. Doyle: There were no more than the ones that are out on the table right now, but we are looking at more coming out.

G. Abbott: We had an opportunity to discuss this a little bit yesterday, I believe it was, so I don't want to dwell on it. My recollection, in terms of the reporting out or the ongoing analysis of the code pilot projects. . . . I believe the minister's response to my question was that the pilots would be assessed on an ongoing basis and that as the ministry became comfortable with the lessons learned from the code pilots, those would, as soon as appropriate, be incorporated into legislation. Again, I may be simplifying excessively here, and if I am, I'll ask the minister to correct me on that.

Hon. J. Doyle: Member, that is correct. Your memory serves you well from yesterday.

G. Abbott: This question, perhaps, will provide us with a bridge from code issues to forest health issues. For the minister's information, when I had the briefing with the deputy minister and other officials, it was suggested that the discussion of innovative forest practices might be better moved down to our discussion around other FRBC issues. I think that's a useful way to proceed. This will take us into forest health next. I'll pose this question because it involves a bit of a code issue, and it kind of involves forest health issues too.

I'll preface it with this comment. A couple of years ago I had the good fortune to be up in the Bowron Lake area, where there had been a very substantial clearcut to deal with a huge pine beetle infestation some years ago. The neat thing about that was that the area has been reforested, and the trees are certainly commonly in the 30-foot range now. Actually, it's pretty darn beautiful in through there again.

Has the ministry had to confront the issue of maximum cutblock sizes as it attempts to deal with the beetle infestation this go-round? I mean, there must be lots of instances where the infestation is such that you might need an opening of 500 hectares, perhaps, to deal with it. How does the ministry come to grips with that?

Hon. J. Doyle: The code does allow larger openings in areas like we're speaking about, where there are beetle problems.

G. Abbott: So the maximum is effectively waived in instances where, due to circumstances of forest health, the licensee or the contractor must go in and deal with it. There's no maximum in that case; it's left to the discretion of the ministry officials to determine.


Hon. J. Doyle: They're not waived -- the size. But we do try to mimic natural disturbances that would occur through natural events.

G. Abbott: The question I asked was of a more technical nature. When those questions arise, does it fall to the discretionary authority of the district manager to determine what cutting approval would be appropriate?

Hon. J. Doyle: The member is right; it is in the jurisdiction of the local manager.

G. Abbott: What I'd now like to canvass briefly with the minister is the mountain pine beetle epidemic. Again, I'm not sure -- is the appropriate staff here for that? Mr. Konkin knows everything, so he can answer the question. That's great. What is the government's estimate in the year 2000 of the number of hectares that are in some degree affected by the mountain pine beetle infestation?

Hon. J. Doyle: The current estimate is 195,000 hectares. We will not know the total infestation in the province until we complete the surveys that are ongoing at this time.

G. Abbott: Are the surveys being conducted primarily by aerial means, or are there other ways that's determined?

Hon. J. Doyle: Aerial and ground surveys are done.

G. Abbott: How has the number of affected hectares changed since. . . ? Let's go back to 1999 and 1998. I just want to get a sense of the recent growth of this epidemic.

Hon. J. Doyle: The average year is 50,000 hectares. For instance, as we mentioned a minute ago, last year was 195,000.

G. Abbott: I'm not sure I understood the minister's answer. The average area affected in British Columbia in an average year is 50,000 hectares. We have moved to 195,000. Obviously we're way above average in terms of the natural cycle of this insect.

Does the ministry anticipate -- again, barring the good fortune of a particularly cold winter -- that the epidemic has reached the peak of its cycle? I am assuming that there are entomologists within the ministry who are advising the ministry with respect to this.


Hon. J. Doyle: For instance, the last decade was the warmest of the century, and beetle populations are up throughout the province. One question I didn't answer for the member a while ago is that we don't have the 1998 numbers.

G. Abbott: The expectation of the ministry, in the absence of a particularly cold and early winter, which would knock back the beetle populations. . . . In the absence of that, we are to assume that the magnitude of the epidemic could again increase. Correct?

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Hon. J. Doyle: It would be right to assume that the peak has not been reached. We mentioned that the last decade had been the warmest in this century, so the member would be right in assuming that.

G. Abbott: Well, 195,000 hectares is a considerable area obviously, and there is no doubt some dispersion of this problem around the province. Can the minister advise where the principal areas of infestation are? I can guess that the Cariboo-Chilcotin and some areas of the north are the principal areas. I'm not expecting a detailed breakdown here, but perhaps staff can provide a sense of where the dominant challenges are around controlling this.

Hon. J. Doyle: The Cariboo, Prince George and Prince Rupert regions are the worst in the province, although there are areas throughout the province, as the member well knows, because of the warm winters we've had over the last decade in the province.

G. Abbott: The only effective way to deal with the mountain pine beetle infestation, as I understand it from my limited discussions with Ministry of Forests personnel, is to harvest and debark the pine. The insects die in the debarking process, and sometimes this has to be combined with some, if it can be managed, pheromone traps and all that kind of stuff. Is that the dominant treatment option that's being pursued here -- to try to look at that 195,000 hectares of infestation and identify the pressure points and deal with those by harvesting and debarking and, as possible, pheromone and other treatments of that character?

Hon. J. Doyle: Wherever a possibility, infected trees are harvested in mills. If that is not possible, the trees are felled and burned -- like in a park, of course, as what we're talking about.

G. Abbott: Of the 195,000 hectares that are affected at this point in time, what does the ministry anticipate will be the portion that will be harvested as the treatment to deal with it in 2000?

Hon. J. Doyle: Out of the 195,000 hectares we spoke about, the ministry does try to harvest all of it -- except, of course, what is in parks.


G. Abbott: Perhaps we will take a moment at some point and talk less about the parks than about protected areas. For the parks, obviously, it is the Ministry of Environment, Lands and Parks that is largely in control of the treatment plans there. That is an interesting point -- 195,000 hectares, and it is anticipated that much of it will be harvested. Again, I salute the Northern Forest Products Association and the ministry for the program that they are developing to try to deal with those 195,000 hectares. I am presuming that the program is strategically based to try to minimize what the impact will be in 2001 and 2002 of these kinds of infestations.

Setting aside what we do inside of parks, has the ministry found that they are getting infestations or reinfestations of Crown forests from park areas where the insects have gone untreated?

Hon. J. Doyle: Because of the warm weather that we spoke about earlier, there have been problem areas in parks -- and in other areas in and out of parks. When I flew around the north a couple of months ago, there is no doubt there was some in Tweedsmuir Park -- a big area, a big concern. But there are many other areas throughout the province that are not in parks.

G. Abbott: I know about the infestations in some of the parks; in particular, Tweedsmuir is the prime example. Is the ministry finding a problem in terms of the interface between parks and Crown forest in that the untreated areas in the parks are infesting or reinfesting the Crown forest adjacent to them?

Hon. J. Doyle: The beetle problem is so large that some, of course, does come from protected areas or parks, but it hasn't been the major issue.

G. Abbott: I know some of my colleagues have questions on mountain pine beetle issues in their areas. My colleague from Oak Bay-Gordon Head has some questions about the codling moth issue. I'll let them ask some questions, but I want to pose this. In terms of the protected area -- and I had some discussions with the Minister of Environment last year about this -- as I understand it, there is a different regime of treatment in protected areas as opposed to parks.

My understanding is that the Ministry of Forests is more involved in the treatment of protected areas than. . . . Obviously parks are the domain of Environment, Lands and Parks. But in the protected areas, I understand that there is some harvesting done to try to deal with the mountain pine beetle situations. Is that correct?

Hon. J. Doyle: Harvesting in Tweedsmuir Park or in any park is not an option. We have seen the kind of pressure that customers can bring when environmental values are at risk. Marketing wood from a park would be extremely difficult.

Some harvesting did occur in the Nechako protected area adjacent to Tweedsmuir. This is done in a manner provided by the LRMP table prior to the area being declared a park.


K. Krueger: Hon. Chair, 195,000 hectares was referred to as the size of the area of the mountain pine beetle kill in the province. Excluding Tweedsmuir Park itself, the area adjacent to Tweedsmuir Park which has been affected by this kill is a matter of some concern to people who have raised issues with me. I wonder if the minister could tell us the area outside Tweedsmuir Park but connected to it that has been affected.

Hon. J. Doyle: Tweedsmuir Park and Nechako protected area are 67,000. So the difference between that and 195,000 is what you are looking for, I would assume.

K. Krueger: I actually want outside of the park itself, to determine the approximate amount of marketable timber that has been affected.

Hon. J. Doyle: An approximate number for the member would be 50,000 to 70,000 hectares.

K. Krueger: Could we have the approximate number of cubic metres of wood affected in that area?

[ Page 15346 ]

Hon. J. Doyle: The rough estimation is 225 cubic metres per hectare.

K. Krueger: And that is times 50,000 to 75,000 hectares. I see the minister nodding his head.

The minister answered an earlier question that the majority of the 195,000 hectares affected in the province will be logged this year. The people who have talked to me said that there is wide-open logging now to deal with this problem in the area outside Tweedsmuir Park. Is it accurate that it's pretty much a clearcut going on to resolve the problem outside the park?

Hon. J. Doyle: There are clearcuts of different sizes. We are trying to address the problem, and we are also conscious of the size of the clearcuts.

K. Krueger: When that wood is recovered, is there any stumpage at all -- any revenue that flows to the Crown from it? Or is it free?

Hon. J. Doyle: As the member knows, the minimum stumpage is 25 cents, but it's all to do with the degree of damage to the wood when it's harvested.

K. Krueger: What would the stumpage rate be if those trees were healthy and they were being logged?


Hon. J. Doyle: I just don't have that number here. Mr. Howard was here earlier, and I didn't anticipate this question. I'm sorry, but I will get the number to the member as soon as I can.

K. Krueger: These people tell me that the mills in the area -- in Prince George, for example -- are plugged with this beetle-killed wood. As a result of this harvest having to go on, there has been a dramatic effect on the small business program and on the interest of the mills in purchasing logs from loggers that would typically have been working through the small business program. I wonder if the minister can tell me whether that's accurate.

Hon. J. Doyle: There is no doubt that there has been impact. There's been a lot of pine beetle wood coming in, and there's no doubt it has an impact on the amount of wood that the companies would buy from other sources.

K. Krueger: Can the minister tell us whether the small business program in the area has effectively shut down as a result of this competition from the bug-kill wood?

Hon. J. Doyle: We don't have the final numbers, but as of the third quarter, harvesting in small business was up throughout the province.

K. Krueger: But I'm specifically looking at the area affected by this bug kill, not the entire province, because of course it's not that easy for these people to transplant their activities. If the minister doesn't have that at his fingertips and would like to just give me a commitment to tell me that later -- how that specific area in the small business program has been affected -- I'd appreciate it.

Hon. J. Doyle: I will have to take the member up on the recommendation he made to me. We don't have the specific number for the affected area with us right now, but I'll get the member the information.

K. Krueger: I'm advised that a number of operators are actually going bankrupt because of this situation. The large mills are using their own logging contractors to get the bug-kill wood. Nothing is left for the people who normally would be operating under the small business program in that area, and people are going out of business, losing their businesses and unable to pay their suppliers. There is a real economic crisis in Prince George and the area around it, brought on by this situation. Can the minister confirm that?

Hon. J. Doyle: The numbers that we have here today suggest that 98 percent of the volume in the small business program that's offered in the Prince George area is sold.

K. Krueger: If the minister would undertake to look into that for me, I would appreciate it. I am told that people are in a desperate state. It may well not have come to the ears of the ministry yet.

I wonder if there couldn't be some program to encourage the mills, if they're logging at 25 cents per cubic metre, to provide some of that business to people who otherwise would have been hauling healthy logs to them under the small business program. Would the minister agree to look into that, to find out if bankruptcies are occurring and in what volume, and to provide that information to me and also to see if some support program could be put in place for these people?

Hon. J. Doyle: I'd be happy to look into the problem on behalf of the member. I know it's very, very important. There's many individual people who own a logging truck or some other equipment. They have bills; they have families to feed; they have workers to feed. I'll be happy to look into it for the member.

K. Krueger: I thank the minister for that. If we knew then what we know now. . . . When the bug kill got rolling in Tweedsmuir Park. . . . If we had known it then, would we have done this logging sooner, or something like it, to prevent the spread of the bug kill outside the park?


Hon. J. Doyle: The beetle problem didn't just come from Tweedsmuir Park. It arose from other areas outside of the park -- some in, some out -- but in no way just specifically in the park.

K. Krueger: I know that. I'm not wanting to drag this out, because my colleague has questions to ask. The park itself is a particularly huge area, as I understand it. The minister has already made his position clear on not logging within the park -- fine. But if the province had moved, back when it was obvious that the problem was coming on, to log essentially a guard around the park so that it didn't spread into the Crown timber that would be available for sale, could we have stopped this from happening outside the park?

Hon. J. Doyle: There's no way to know what the member is suggesting. The beetle problem is a large problem

[ Page 15347 ]

throughout the province, not just in this specific area. It's a big problem in this area, but there are other areas in the province with beetle problems, as was mentioned earlier in the debate.

I. Chong: I appreciate the time that the minister can offer me at this point to discuss the issue of the gypsy moth aerial spray program. The reason why I'd like to ask some questions is to follow up on the aerial spray program that occurred last year in the greater Victoria region and particularly to find out whether or not the program was successful. If so, perhaps the minister can advise what follow-up processes were in place to ensure that it was in fact successful -- that the program was effective in terms of aerial spraying.

Hon. J. Doyle: It's the view of the ministry that the spraying program was successful. There's been follow-up done. The bugs are gone, and the federal government has lifted the restrictions it had placed on this area.

[T. Stevenson in the chair.]

I. Chong: Well, I guess my question. . . . And it's been partially answered by the minister; perhaps he could just elaborate. When he stated that the program was in fact effective and successful, I'm presuming that he's meaning that the gypsy moth has been totally eradicated in greater Victoria and that the effectiveness of the program was determined by trapping or whatever other means. It wasn't clear to me as to what was done to ensure that it was in fact eradicated. There have been questions on whether or not we would ever eradicate the gypsy moth. I'm just curious as to how the minister can provide 100 percent assurance that it has, given that we now have another area being sprayed in another part of the province as well.

The Chair: Noting the time, minister.

Hon. J. Doyle: The answer to the member's question is that the concern is that we'll never totally eradicate the gypsy moth problem. I could not say to you "100 percent." But follow-up trapping that was done. . . . The gypsy moths are very scattered. They're not in intensive areas. Hopefully we've done our best. It is not a problem at the present time and hopefully will not be again.


The Chair: Noting the time, minister.

Hon. J. Doyle: Noting the time, hon. Chair, I ask that we report progress and ask leave to sit again.

Motion approved.

The House resumed, the Speaker in the chair.

Committee of Supply B, having reported progress, was granted leave to sit again.

Committee of Supply A, having reported resolution, was granted leave to sit again.

Hon. M. Farnworth: I move the House do now adjourn.

Motion approved.

The House adjourned at 5:52 p.m.


The House in Committee of Supply A; D. Streifel in the chair.

The committee met at 2:50 p.m.


On vote 10: ministry operations, $40,607,000 (continued).

M. de Jong: We left off while I was asking some questions about the First Citizens Fund. I'd like to come back to that, but my colleague for Peace River North is here, and I wonder if we might accommodate his schedule.

R. Neufeld: Just a few brief questions dealing with Treaty 8 issues as they relate to the oil and gas activity that's happening in the northeast. I believe the minister is probably aware of the MOUs that have been signed by the Treaty 8 bands. I think there are six bands now that have tendered letters cancelling those MOUs, which actually, I think, will take place. . . . They would cancel those MOUs -- they have to give 60 days' notice. Let me back up. I believe that the end of this month would cancel those MOUs. I'm wondering if the minister could maybe give me a brief update on what his ministry is doing to make sure that these issues that Treaty 8 has are resolved -- or at least not resolved, obviously, but what the process is to resolving those issues.

I think the ministers are well aware of the importance of the oil and gas industry in the province of British Columbia and the hundreds of millions of dollars that it brings in annually for the province. It is a huge issue that we have to deal with. Maybe the minister could just tell me what his ministry is doing now and what process is in place to resolve those issues, so that we can carry on and keep on drilling for natural gas and oil in the northeast.

Hon. D. Lovick: Just to clarify first, if I may, for the member, the MOUs, as I am sure he is well aware, are essentially agreements with Energy and Mines. Treaty 8 bands, however, have registered their concerns about the treaty. So it's quite appropriate to raise the matter here.

We have met quite recently with the Treaty 8 bands to address their concerns and have, moreover, resolved to continue meeting to address them. I believe we have a meeting scheduled for the next month or so. We are obviously as concerned as the member is about the importance of keeping that important economic boom going in that region of the province. Clearly that means allaying the fears and addressing the concerns of the Treaty 8 bands. We will continue to do that and to monitor that situation and provide whatever assistance we can.

R. Neufeld: I appreciate that response. I know that the MOUs are with the Oil and Gas Commission, but I know also that your ministry is heavily involved, as it should be, with those issues. I will certainly be bringing this up with the Minister of Energy and Mines when those estimates start.

[ Page 15348 ]

I understand and I have heard that there are meetings set between Energy and Mines and your ministry. Could the minister tell me a little bit about what the issues are that are on the table that would actually bring this to such a point, where the bands would actually want to cancel the MOUs which were just recently signed, and let me know what process you are using to resolve that?


Hon. D. Lovick: The central issue has to do with the interpretation of Treaty 8. I was talking to the member's colleague from the Peace yesterday about Treaty 8 and mentioning the fact that even though the old treaty talked about "cede, release and surrender," and everybody assumed it was very clear -- you know, what the rights were and what they weren't -- recent court cases and other things have demonstrated to us that the language of the old treaties is not nearly as secure and firm as we had thought. And there is a question of uncertainty, frankly, surrounding it.

More particularly, the issue in this instance has to do with the interpretation of Treaty 8 off-the-reserve land. As the member well knows, treaty rights in Treaty 8 talk about the rights to fish and hunt and activities of that kind off the treaty settlement lands. That, I gather, is essentially the contention of the Treaty 8 bands, suggesting that perhaps those rights have not been satisfactorily taken into account. They want to ensure that those issues are addressed before they agree to sign onto oil and gas exploration leases and the like.

The only other point I would add at this moment is that it's a bit difficult simply because they are treaty bands and it is about treaty rights. Therefore the lead ministry is obviously the federal government. We the province are obviously concerned, because it is our territory and our land base. Therefore we are at the table as much as we can be, trying to do whatever we can to work with the federal government and the Treaty 8 bands to resolve the difficulties. They are broadly about the interpretation of Treaty 8 rights. That's difficult stuff simply because, frankly, the language has been adjudicated or judged by various court decisions not to be nearly as precise as some of us thought it was once.

R. Neufeld: The essence of the MOUs is that. . . . To go back before we had the MOUs, the bands felt that they were being infringed upon. You're right. The MOUs were brought into force to actually do a number of things. One of them was to fund the bands to a certain degree, depending upon every well site and every activity in the oil and gas industry. So industry pays those costs. That money is divided up through the Oil and Gas Commission to the different reserves. They are now able to hire the appropriate staff or whoever they need to be able to go through the well applications and the work applications that come forward.

They presently have agreed, in the old MOU, to a ten-day turnaround. That means that from the time they receive the application -- and first it would go to the Oil and Gas Commission from the oil company; then it would go to the particular band, whichever one would be affected -- they have ten days to respond. It was interesting that the minister talked about court cases and that the older treaties -- this being one of them -- haven't been that clear.

As I understand it, the Oil and Gas Commission's response has been that even if the MOUs expire, the ten-day turnaround will still apply. The bands will have ten days to respond, unless it's in a very sensitive area. If they don't respond and if it's in just an average area in the province, the activity will go ahead. Is it the understanding through the Ministry of Aboriginal Affairs also that that would be acceptable, especially in light of the minister talking about court cases?

Hon. D. Lovick: I don't think I can give an absolutely concrete and precise answer on the ten days, largely because it's MOU-negotiated. I'm sorry, I don't know how that works and how the feds fit into that. What I can say is this: our commitment is, as a ministry, to work with the bands and the federal government to do whatever we can to facilitate that kind of development to ensure that the oil and gas activity goes on. That's not just a matter of the ten-day period but all of those things that are apparently obstacles in the way, or questions surrounding what needs to be done at this point. We're committed to working with the other parties to try and ensure that the activity in that corner of the province continues.


R. Neufeld: What level of activity, what role, does the ministry take in this type of negotiation? Maybe I should have started out with that question. Pardon me. Is it a significant role that the Ministry of Aboriginal Affairs and the province of British Columbia take in this issue? If it is federal. . . . It is a federal responsibility, because it's a federal treaty. I just wonder about the level of involvement of your ministry in all those negotiations -- that being the MOUs, the application of the treaty and those issues -- remembering that we just introduced a bill in the House to deal with the McLeod Lake band which is in adherence to the Treaty 8 treaty.

Hon. D. Lovick: Our ministry's involvement essentially begins where the Ministry of Energy and Mines's involvement ends. Let me start, then, by saying what Energy and Mines is. The Ministry of Energy and Mines negotiators have been mandated to deal with consultation related to oil and gas industry developments. That's their mandate. Where it gets into the interpretation of Treaty 8 rights and what those mean, especially off the settlement lands, that's where we come in, working with the federal government.

Arguably it is the federal government's responsibility, but because we have a direct interest in the land base, especially off-treaty settlement land, then clearly we want to be involved. But one could say that formally we don't really have a role in the negotiation. Rather, our role is more of a facilitating one. Is that a fair description? I'm checking with my deputy on that, because I'm in territory that's a bit murky for me on this one. Perhaps I'll stop for a moment and see if I'm on the right track.

I'll clarify a little bit, if I may. The treaty is a bilateral treaty. It was done between the government of Canada and Treaty 8 bands. However, we the provincial government take the position that dealing with oil and gas exploration, especially off those lands, is a tripartite matter. We the province believe we should be part of that negotiation. However, because it is a bilateral treaty, we hold to the position that any changes in terms of the costs or the money changing hands and all of those things, or an increase perhaps to benefits, moneys owing to Treaty 8 bands. . . . That

[ Page 15349 ]

becomes ultimately the federal government's responsibility because it is a bilateral agreement with the federal government and the Treaty 8 bands.

R. Neufeld: Then I would assume from that that when there are negotiations taking place in the northeast with the Treaty 8 bands, the ministry would have some fairly high-level staff involved at those meetings to facilitate or to actually keep the ministry in touch with what's going on. If that's what I understand. . . . And the other part about the federal government -- I understand that too.

I want to go on a little bit now to employment on the different reserves in the Treaty 8 territory. I want to ask the minister if the ministry has some records of what the unemployment rate is on some of the different reserves in the Treaty 8 territory. Would you have that information with you?

Hon. D. Lovick: We don't collect that statistical information, simply because it is under the Indian Act. It's federal reserve land. I think, however, that the federal government has published those statistics. I've certainly seen the broader ones -- you know, across the piece -- about the specific bands: Blueberry, Doig and others. I don't know that, but quite frankly, I would be surprised if there wasn't something about Treaty 8 -- you know, the entire Treaty 8, into Saskatchewan and further north -- if the federal government wouldn't have published some statistical evidence on that.

R. Neufeld: Then, specifically for the Fort Nelson Indian band, this ministry would not have the information on employment statistics of any kind on that band at all. Would that be correct?


Hon. D. Lovick: That's correct.

R. Neufeld: I want to go back to just prior to Christmas. There was a meeting called in Fort Nelson with Treaty 8, and it had to do with another set of letters that had come forward about cancelling MOUs. I mean, it seems as though it almost runs in a six-month cycle. We get letters from the different bands in Treaty 8 -- not always all of them, but the majority of them -- that they want to cancel the agreements for one reason or another.

I understand there was a meeting that took place in Fort Nelson that staff from the Ministry of Aboriginal Affairs attended along with Energy and Mines, where I believe a specific demand was made for approximately $70,000 to $75,000 to study and look at trapping in the Fort Nelson area and in the treaty area. This was a surprise to the negotiators when they arrived and actually ended the negotiations almost that quickly.

Maybe the minister could bring me up to date a little bit. I know he won't know, but maybe his deputy can help him a little bit with some of the things that took place there: why we were there to start with, why it ended so abruptly and the request for the $70,000 or $75,000 to look at trapping.

Hon. D. Lovick: My information is that the Ministry of Energy and Mines was up there to talk about the particular issue of compensation for trapping interests that had been, I guess, injuriously affected -- or were perceived to be injuriously affected -- by the oil and gas activity. The Ministry of Aboriginal Affairs's role in the matter was to be there to assist in the process arguments regarding Treaty 8 and -- I almost said the implementation -- the obligations under Treaty 8 in terms of any matters that involved how we interpret the treaty, simply because we are the experts in interpreting the treaty. Energy and Mines had the lead in terms of the oil- and gas-specific activities.

R. Neufeld: I was interested when I found out about the issue -- about the $70,000 or $75,000 to study trapping. I know that trapping has been a huge issue in the northeast, not just in the aboriginal community but in the rest of the community. There are quite a number of people, to be honest, who are non-aboriginal that trap on a steady basis in the northeast that do have some problems.

The issue that caught my attention -- and I maybe will explain it a little to the minister -- was the fact that people travelled all the way to Fort Nelson to try, in a realistic way, to deal with issues that Treaty 8 had. The $75,000 issue was laid on the table at the start of the meeting and ended the meeting about that abruptly. Everybody had to go back home, and nothing was accomplished.

Just recently, in fact within the last month or so, I happened to notice a press release that went out of the Ministry of Community Development, Cooperatives and Volunteers; the Fort Nelson Indian band received $62,000 to study full-time employment on the reserve. And that was the reason for my questions around employment. I lived and worked a good part of my life in Fort Nelson. I think the minister's aware that the band is fairly well off. They are an advanced band; they have their own school and in fact work very well within the community -- are well respected. They have one of the largest construction firms that work in the oil and gas industry in Fort Nelson. So actually, they do quite well.


I'm just wondering how, all of a sudden, we can have out of the government -- and this is more of a direct question to the minister -- a grant for $62,000, which comes almost mysteriously close to $70,000-$75,000, that doesn't deal with trapping, if that's an issue, but deals with full employment on the reserve. They just seem to be a little too close together for me, and I'm just wondering if that was a way that the government had of trying to settle that issue so you could get back to the table. I wonder what the ministry's involvement is. They obviously. . . . The minister has said that he doesn't know the issues on the reserves because they are federal. So I just wonder how the Ministry of Community Development and Cooperatives gets that information so that they can give out that kind of money.

Just for the minister's information, I add that this question has nothing to with what happened in question period today. This is just because your estimates are up at this particular time.

Hon. D. Lovick: I am pleased to give the member an absolutely categorical answer when I say that this ministry had no connection whatsoever with the decision made by the other ministry to make that award to the Fort Nelson band. There wasn't consultation, and there was certainly nothing like collusion or anything like that. I don't blame the member for posing the question, because it's opposition's job to be suspicious. But I can give him a categorical answer that says: "No, that did not happen."

[ Page 15350 ]

I'm sorry, I do not know the details of the announcement. Indeed, I will be blunt and say that all I knew about that was when I happened to see the press release announcing that that grant had been given.

M. de Jong: So, back to the First Citizens Fund, we're having this discussion within the context of the goals and objectives -- goal 2 from the ministry's business plan, and the particular attention it pays to small business development within the aboriginal community.

It's a bit of an accounting question. My understanding is that the First Citizens Fund proceeds are distributed in four areas: friendship centres, student bursary, elders transportation and business loan program. We've established that with respect to the business loan program -- that is, the Native Economic Development Advisory Board. . . . But maybe we can just break down for the record how much money will be disbursed out of the First Citizens Fund this year and what the amounts are for the four areas. I think I'm relying on ministry documents in referring to those four particular areas, but if I'm not correct in doing that, maybe the minister will correct me.

Hon. D. Lovick: I'm going to give the member a breakdown of the First Citizens Fund expenditures, if I may. I'll use the 2000-2001 budget. I can give him both, with 1999-2000 as well, if he wishes, but let me do 2000-2001.

Friendship centres: 23 centres at $30,000, for a grand total then of $690,000. The B.C. Association of Aboriginal Friendship Centres is $85,000. That, by the way, is the same amount as in 1999-2000. The second category is student bursaries. The budget for both years is the same -- namely, $140,000. The elders transportation program, the same for both years, is $25,000. Business loan, $1.516 million; business loan administration, $131,000; the advisory support net, $77,000; the Native Economic Development Advisory Board, $36,000 -- the same, as I say, throughout for both years. The total expenditure was $2.7 million.

M. de Jong: To confirm, then, that represents the interest proceeds from the capital amount?

Hon. D. Lovick: That's correct.


M. de Jong: Okay. If we can, let's go to the business loan program and just get confirmation of a couple of things. I've handed to the minister's staff the FOI document that I received in February, although from the activity, I think the staff had it right at their fingertips anyway. But I just want to make sure we're all looking at the same documents when we have that discussion.

For the last fiscal year, how many business loans were granted from the First Citizens Fund and in what aggregate amount?

I think I asked a question that I already had the answer to. The loan amount, if I heard the minister correctly, was $1.516 million for both years. It might be a question of confirming that figure for last year.

Hon. D. Lovick: Not exactly. We provide 40 percent; they provide 60 percent. That's the discrepancy in figures.

M. de Jong: I'm not sure I understood the "we" and "they" in that last statement.

Hon. D. Lovick: To answer the specific question on the we/they: "we" is us; "they" are the lending institutions -- right?

Let me just clarify, if I may, by saying this: the aboriginal relations branch facilitated loans to 133 aboriginal-owned businesses, to begin or expand operations. The value of these loans was $3.75 million at March 31, 2000. These loans created an estimated 300 jobs.

M. de Jong: Am I correct, then, that for the fiscal year ending March 31, 2000, loans totalling $3.75 million were granted to those 133 small businesses? Are those loans. . . ? I just want to make sure I understand the process. Those would have been loans granted on the recommendation of the Native Economic Development Advisory Board, involving funds. . . . I see everyone shaking their heads in the negative, so maybe I should stop there and just ask what we are dealing with.

Hon. D. Lovick: I have a note here that I'll read into the record which I think will answer all the questions.

The business loan program is administered by the All Nations Trust Co., which is under contract with the Minister of Aboriginal Affairs. All Nations Trust Co. subcontracts to other lending organizations: Tribal Resources Investment Corp. in Prince Rupert; Tale'Awtxw -- that's a new one to me, so I apologize for not being able to pronounce it -- Aboriginal Capital Corp., based in Chilliwack; the First Nations Agricultural Lending Association, based in Kamloops; Nuu-Chah-Nulth Economic Development Corp., Port Alberni.

Applications and business plans are completed and forwarded to the lending institution which is closest to the borrower. The applications are reviewed by the lending institutions and are approved at their discretion. The maximum loan amount is $75,000 -- that's a maximum lifetime loan -- of which 40 percent can be forgiven by the First Citizens Fund. This 40 percent provincial contribution is disbursed to the lending institutions in instalments on a pro rata over the term of the loan.

Upon approval by the Ministry of Aboriginal Affairs -- I'm just looking to see if I have a similar. . . . No, I'm sorry. I'm moving into a different subject area there. I think I've answered the member's question thus far.

M. de Jong: So the All Nations Trust Co., under a contract with the Ministry of Aboriginal Affairs, administers the loan program. Does that mean that they are responsible for the approval process? Is that the agency that approves the loans?


Hon. D. Lovick: It is the lending institution that approves the loan. Apparently, just like any other person going to get a loan, you get the approval from your particular bank or credit union.

M. de Jong: If I'm an aboriginal person with a small business, how do I do this? Do I go to my bank, to one of the member lending institutions, and after I've sold them on the

[ Page 15351 ]

deal, I then make another application to All Nations Trust or to the Native Economic Development Advisory Board? I'm far from clear on how you access those funds.

Hon. D. Lovick: I just got the answer to this question, and I can understand why we're having difficulty here. I believe I did not give the member correct information earlier when he asked a similar question. I think I had. . . .


Hon. D. Lovick: Yes, tsk, tsk, indeed.

I believe I intimated, if not directly stated, to the member that I though it was NEDAB that adjudicated the applications. I apologize; that's not the case. NEDAB, the Native Economic Development Advisory Board, makes recommendations regarding policy and the like. It is the lending institutions which approve the applications and the business plans from those who make the applications.

M. de Jong: Okay, we've eliminated one board from the approval equation. But what seems to follow from what the minister is saying is that I, as an aboriginal person with a small business, would go to a lending institution, maybe a credit union. . .

Hon. D. Lovick: One of those ones.

M. de Jong: . . .or one of the lending institutions with which there is an arrangement in place, and seek my financing. Then the First Citizens Fund is automatically. . . . That formula -- that is, how much the First Nations Fund is going to be responsible for -- is assigned at that point. Is that what happens? Also, I know that the minister said it, but I'm not sure that I heard which lending institutions the arrangements exist with, for that part of the approval process.

Hon. D. Lovick: The lending institutions are the ones I referred to, based in Prince Rupert, Chilliwack, Kamloops and Port Alberni. The loans are approvable for up to a maximum of $75,000. Our contribution is up to 40 percent of that figure, up to maximum of 40 percent of $75,000, though it certainly could be less.


M. de Jong: Maybe part of my problem is that I'm having a bit of difficulty reconciling some of this. I got a document off the government's web site which talks about the maximum loan amount being $75,000, of which 40 percent can be forgiven by the fund. But that's a different thing than what the minister is saying. What I'm hearing the minister say is that you go to one of these subcontracted agencies and that you get a loan for up to $75,000, of which the First Nations Fund contributes up to 40 percent. The way I hear it and read it, that's not consistent with what this says -- that 40 percent can be forgiven. That's not a loan; that's a grant.

Hon. D. Lovick: I'm learning about this, too. Mr. Chairman, I understand that the arrangement is that the aboriginal person who is successful in getting a loan is obligated or obliged to pay interest on 100 percent of the amount borrowed, but only pay back 60 percent of the principal. It's a forgivable loan, and that's how the discrepancy between the two amounts is explained.

M. de Jong: I understand that part of it, but then an individual or small business could make application via this process for up to $75,000 from the First Citizens Fund in addition to whatever other financing they secure. I should say that the document that I'm looking at indicates that the average loan is about $45,000, but that the maximum amount a business would qualify for from the First Citizens Fund is $75,000.

Hon. D. Lovick: I say as graciously as I can that the member's wrong -- okay? The amount that they can borrow of can apply for from the First Citizens Fund is only up to 40 percent of $75,000, not $75,000.

M. de Jong: I wish I had photocopied this so I could just give it to. . . . But I'll read it quickly. This is off the ministry's web site, "Business loan program objective: to support aboriginal economic development through" -- and it lists and number of things.

"Program details. Loans are available for the creation, expansion or upgrading of native businesses. The program is open to all types of businesses, but will not provide financing for revolving lines of credit or for the refinancing of existing commercial enterprises. The business structure can be a sole proprietorship, partnership, registered company or joint venture organization. The only ownership criterion is that the business must a minimum 51 percent aboriginal-owned. The maximum loan amount is $75,000, of which 40 percent can be forgiven by the fund. This contribution is dispersed in instalments on a prorated basis over the term of the loan. All Nations Trust, under contract with the ministry, administers the loan program."

That's located in Kamloops. I'll just skip down a couple. . . . "A 2 percent borrower's fee is charged." And maybe this will help: "The loan program began in 1988 and approves approximately 70 loans per year, average loan amount approximately $45,000."

Maybe it's those. . . . On the one hand the minister is saying a maximum of 40 percent, but this document is telling me that the average loan amount is $45,000 -- some are higher, some are lower -- and says the maximum amount is $75,000. All of this is referring to the business loan program. When I read this, it suggests to me that a first nations small business person can go to the fund, get a loan for up to $75,000 and ultimately have 40 percent of that forgiven. But that doesn't seem to be the minister's take on it.


Hon. D. Lovick: We're not communicating very well somehow, because I don't see the contradiction. I'm sorry. I listened carefully, but I missed it. Look, let me try once more. I think the distinction has to be made between the loan program, which money is provided by those lending institutions, and the First Citizens Fund, which provides 40 percent of whatever loan the aboriginal person might receive.

M. de Jong: Oh, okay. Right.

Hon. D. Lovick: That's the essential distinction. Perhaps we're mixing those two or melding those two together, and thus the confusion.

M. de Jong: All right. Let me see if I can verify my understanding. So I get a loan for $75,000 from All Nations

[ Page 15352 ]

Trust, but if I behave myself and pay it back the way I should, the First Citizens Fund business loan program will look after 40 percent of that loan.


M. de Jong: The principal, says the minister.

So with respect to the First Citizens Fund -- money that an individual or small business would get from the First Citizens Fund -- all things being equal, that 40 percent is really a grant. It's part of a loan program, but it becomes a grant.

Hon. D. Lovick: The whole amount is indeed a loan. It has a forgivable component. They do pay interest. Beyond those qualifications, the member is correct.

M. de Jong: Again, the ministry document says, dealing with the program as a whole, that about 70 loans per year of an average amount of $45,000 have been extended. The figures we got for last year, certainly in the amount of loans, were almost double that. Is that true? Is it 70 loans? I think the figure the minister gave me for last year was 133 loans.

Hon. D. Lovick: Yeah, the member is right that there's significant expansion over the 70 loans he referred to. I think last year it was 133, albeit last year was apparently aberrant in terms of more activity than typical. But 70 is on the low end, as far as I can tell from another document I am looking at, which is a report of three years of evaluation of the program.

This might be an appropriate time for me to acknowledge that document, just to advise the member that there was a private, independent consultants' report on the business loan program. A review of the program was undertaken by the Cornerstone Planning Group, and they gave us a report dated December 1999. They were contracted in the fall of '99 to conduct a review of the program. The total contract was about $30,000, funded from the First Citizens Fund. Let me just give a quick overview of the results. Then what I am going to do is suggest to the member that I make available to him a copy of that review, which perhaps will explain to him the kind of detail I think he is understandably interested in receiving.

The review results are broadly as follows. There was a distribution of $12.2 million through 356 loans to aboriginal businesses during the three-year period ending March 31, 1999. So we're looking at -- what? -- about 120 loans per year, on average, for those three years. The average loan size over that period was some $33,907.


One of the findings of the report, the member might be interested to know -- and indeed, one of the reasons for commissioning the report -- was concerns that had been expressed that lie behind this conclusion -- namely, that there were significant differences observed in the regional distribution of the First Citizens Fund loans. The lower portion of the loans are approved in the Kootenays, Cariboo, Nechako and northeast areas, whereas loan concentration seemed to be centred around the location of the aboriginal capital corporation offices -- Kamloops, Port Alberni, Prince Rupert and Chilliwack.

It's a relatively even split of the numbers of loans to establish a new business and those used to expand an existing business. The figures are about 46 percent versus 43 percent. The review concluded that the First Citizens Fund has helped to generate 600 ongoing incremental jobs, costing out at about $20,105 per job, 64 percent of which are filled by aboriginal people.

There's a very quick overview. As I say, I'm certainly prepared to provide to the member that report, which will give him, I think, a great deal more detail, should he wish to have it.

M. de Jong: That's helpful, hon. Chair, and I'll look forward to receiving that from the minister as indicated.

Let's just briefly, then, explore the other side of the equation. The minister will know that we made a request to track, in our own rudimentary way, some of the successes and difficulties inherent in the program. Maybe the report deals with this for the three-year period. But even during that period and since then, what is the default rate? How many of the loans are presently in arrears or in default and to what aggregate amount?

Hon. D. Lovick: I'm advised that the total of default loans from April 1, 1999, to March 21, 2000, is 17. The provincial liability, I believe, is about $244,932.88. That is based, however, not on loans issued just in that time but, rather, on loans that may have a history somewhat longer than that.

M. de Jong: The last part of the minister's answer was helpful, because that's what I was going to ask: whether that was a. . . . Then I have some problem reconciling. He indicated that it was for the period April '99 to March 31 -- 17 loans in default. Maybe the better way, if we're looking for an aggregate total of the number of loans in default, is as at a certain date. Let's make it March 31, 2000. How many loans are in default as at that period? I don't know how many loans in total there are outstanding right now.

Hon. D. Lovick: I understand that the member's asking essentially for a retrospective report. What is the number of loans in default effective this date, forever? We don't have that information available right this moment, but we'll certainly undertake to provide it to the member as soon as we can.

M. de Jong: I appreciate that. But if that is the case, then can I assume that the figure of 17 that was given actually does relate to loans granted during the period April '99 to March 2000?

Hon. D. Lovick: No. Those are loans that would go into default during that time frame.

M. de Jong: Ah, I see. Those loans that entered the default stage during that period, and there may be others -- it joined another group that were already in default. The minister is nodding in the affirmative.


Maybe the minister, with his staff, can help me read the documents that I got in the FOI. I think the minister and his staff have them. The request was for loans for the first nations, of the First Citizens Fund, that are or were in default from January 1, '99, to date. I ended up with 13 pages, and I'm not sure I know what those pages tell me. If we could just begin

[ Page 15353 ]

with the top page -- and I'm hopeful that these are in the order that I had them -- I have a disbursal date of March 26, '93: program loan, $75,000; provincial liability, $37,500; current month's FCF claim, $37,500; pay-out type, default; date of FCF claim, February 4, '99; remaining provincial liability, zero. What does that form tell me?

Hon. D. Lovick: We were struggling to get that information, and it took me a minute to realize, because we were dealing with different pages. Now we're on the same page, as it were.

Let me take the member simply across the grid -- saying first, however, that the reason there is one line per page is that the remaining lines on the page would be loans that weren't in default. The member's request was for loans in default, and that's why.

The first column under "Name" simply refers to the name of the borrower. Obviously privacy provisions preclude our having that, for obvious reasons. The original issue of the loan is the disbursal date. The total amount of the program loan was $51,000 in this instance. The provincial liability, 40 percent of the $51,000, is therefore $20,400. I hope we're still on the same page?

M. de Jong: No.

A Voice: No, he's using that one.

Hon. D. Lovick: Oh, okay; I'm sorry. I'm going to take us back and start again. The name we've dealt with; the disbursal date we've dealt with. The program loan in this instance is $75,000. The provincial liability -- 40 percent of that, then -- is $37,500. The current month's FCF claim -- I'm not sure I remember what that one means, so I'm going to. . . . This is the amount that has been paid out to date, in this instance $37,500 -- i.e., the forgivable loan part, I guess. The pay-out type simply says whether they are being paid or not; in this instance it's in default. The date of the claim, saying that it is in default, is in this instance February 4. The First Citizens Fund claims to date is simply how much the First Citizens Fund has put in; that's pretty self-evident, I guess. Therefore remaining provincial liability is zero. It's prorated so that it is not always up to 40 percent each time.


M. de Jong: Okay, let's try this. ABC Inc. gets a loan of $75,000 on March 26, 1993. The distinction between the provincial liability and the First Citizens Fund amount. . . . I'm not quite sure I understand. It looks on this document like the total amount was split 50-50 between two different sources; $37,500 by my math is actually 50 percent of the total program loan. Maybe I'll stop there and get clarification.

Hon. D. Lovick: I was in panic there for a moment, because I thought: gee, my math too says that's 50 percent. The explanation is that the older loans were on a 50 percent model -- in 1993 for instance. Today, it's a 40 percent model. That's the reason for the discrepancy -- thank God.

M. de Jong: A $75,000 loan, $37,500 of which apparently came from the First Citizens Fund -- I hope I'm thinking of that in the correct way, that it's moneys that came from the First Citizens Fund. Then $37,500 is referred to as provincial liability; I don't know what that means.

Hon. D. Lovick: The reason for the terminology of liability is because this is the document from the All Nations Trust Co., and this is simply the language of their accounting. They call it a provincial liability. We could just as readily say that this is the provincial contribution to the loan.

M. de Jong: Is the $37,500 under provincial liability the same $37,500 under First Citizens Fund? If it's not, then what we really have is a provincial government loan of $75,000.

Hon. D. Lovick: It is the same.

M. de Jong: We've got a loan for $75,000 that the First Citizens Fund contributed $37,500 to on March 26, 1993. It's in default, and it says here: "date of First Citizens Fund claim." I take it that means that on February 4, 1999, the First Citizens Fund called the loan due. Is that what that means?

Hon. D. Lovick: That is the date when the All Nations Trust found the loan in default and therefore notified. . . .

M. de Jong: I'm sorry, say it again.

Hon. D. Lovick: That's the date on which the All Nations Trust Co. found the loan in default and notified us accordingly.

M. de Jong: From this, am I able to ascertain how much of that total program loan of $75,000 was ever repaid by ABC Inc.?

Hon. D. Lovick: Not from this chart, no.


M. de Jong: So this doesn't actually tell me how much is owing on the loan.

Hon. D. Lovick: One would have to request that information from either All Nations Trust Co. or the particular financial institution.

M. de Jong: Well, a lending institution isn't going to tell me how much one of their borrowers owes them. I don't want to be cute about it. Part of the investigation was to ascertain how much of the taxpayers' moneys loaned under this program are in default. I'm not getting it yet. Apparently I'm not able to ascertain that from this document, but if I'm mistaken in that respect. . . . We've got an example here. The request was for loans information for First Citizens Fund loans that are or were in default from January 1, '99. In response I got this document that points to a loan that is in default but doesn't really tell me how much it's in default.

Hon. D. Lovick: I think I understand the member's question and would offer this answer. One can read this particular line in this particular document to say that the province in fact lost its $37,500. I think that's absolutely clear. One will say: "Is that defensible?" And I would just make the point that what we're talking about here, essentially, is a lender of last resort propios proposition. That's what the business loan program and the First Citizens Fund is for. Obviously, for the most part, these are not people who can walk into a bank and say: "I want a loan of so much."

[ Page 15354 ]

The reason, in fact, that we are able to work with the lending institutions is precisely because we the province are indeed on the hook for the first 40 percent of the loan. Our money, obviously, then becomes leverage for the individual citizen to get a significantly larger loan sufficient to enable that individual to do something that we think will increase the likelihood of success in creating a business and creating employment.

But we should have no illusions that in this instance -- and in a number of others -- the provincial government has lost. The default is such that we lost the entire amount of 40 percent, and we are, I guess, the first lender in the payback ratio. Obviously the lending institution, All Nations Trust Co., has its own mechanisms and recourse for going and trying to recover whatever other money is there, but ours effectively is gone.

M. de Jong: That's helpful information. So this amount. . . . We can say now that the loan to ABC Inc. of March 26, '93 -- insofar as the $37,500 -- has now been written off. The government doesn't expect to see a return on that.

Can I ask. . . ? I don't yet want to get into the business of: is it defensible or not? At this point, I'm more interested in the procedural safeguards that may or may not exist to minimize the number of times that this can happen.


It strikes me as interesting that the loan was originally negotiated March 26, '93, and apparently no moneys were repaid insofar as the FCF portion of the loan was concerned. I understand it was probably a blended payment that was negotiated in any event. But it was almost six years later that some action was taken, and I'm not certain to what extent the ministry is involved in tracking this sort of thing.

Again, it is why I was questioning about the approval process earlier. It seems to me that the ministry, as the administrator with responsibility for the fund, has a real stake in what happens with these moneys. I'm not sure what audit functions or what role the ministry plays in overseeing it. This was a six-year period, and apparently no money was paid back.

Hon. D. Lovick: I understand that the assumption we make here is that if indeed the loan was dated '93 and the default occurred in 1999, in fact payment was, in all likelihood, being made over that time period. It isn't the case of looking the other way, I gather, for six years. Rather, there is due diligence to ensure that the repayment process is going on.

The question, of course, is whether we're on the hook for the total amount at the end of the day. And I guess we still are, because the payback is paying back to the lender of first resort, which I guess, in this instance -- well, in any instance -- is the All Nations Trust Co. So their liability, at the end of the day, would be the first one addressed, and ours would be second. I would imagine that's how it works, that they have the first claim; we get the second. And that's perhaps why the figure is as it is.

M. de Jong: Recognizing what the minister just said, does the fund take collections action? Or do they simply receive the information and, as it were, write off the debt?

Hon. D. Lovick: I'm advised that the lending institution does indeed take those actions.

M. de Jong: With respect to the example we are utilizing, I can assume that since February '99 the lending institution has been unsuccessful in recovering any moneys.

Hon. D. Lovick: I'm sorry, Mr. Chairman, we don't know that. We simply don't have that information, at least from this document.

M. de Jong: But we know that, presumably, as at the date these documents were transmitted, the ministry and the fund have received no money. Whether the institution has, we don't know.

Hon. D. Lovick: I must apologize to the member. I don't think I got the question; nor did any of the people here with me. Would the member mind repeating it? My apologies.


M. de Jong: My first question was: can we assume that the lending institution received no funds? The minister said that the ministry doesn't have that information based on this document. My reply was: but we can assume from this document that as at the date of its production and transmittal to me, the ministry and the fund had at least seen no money returned on the $37,500.

Hon. D. Lovick: That is a correct assumption.

M. de Jong: So do we then have an aggregate figure for the amount of money that has been written off? If we collected all of these for loans that have been made since 1988, do we have that figure available to us?

Hon. D. Lovick: No, we don't have that figure, but as I believe I said earlier, we will endeavour to get that information for the member.

M. de Jong: Does the ministry have what it deems to be an acceptable default rate? I think lenders operate largely on that basis. Does the ministry have a rate of default, either by year or over a certain period of time? That may be in the report that the minister alluded to earlier.

Hon. D. Lovick: I don't know if I can answer the member's specific question in terms of his "acceptable default rate," but what I can say is that the report that we commissioned concludes that the fund is performing the function for which it was intended and seems to be serving those purposes satisfactorily. As well, I would think that notionally one would conclude, I think fairly, that the lending institution would probably conclude at some point that if the rate is too high and the default rate is an epidemic proportion, then the lending institution would send a clear signal that they are no longer willing to be in this kind of partnership with us.


M. de Jong: I think the minister is partly correct. The lending institution, the All Nations Trust Co., and the subcontractees that it works with have an obligation, presumably, to satisfy their principals and their constituents -- partners, as

[ Page 15355 ]

it were. The government, of course, has a similar obligation with respect to its constituents -- in this case, the taxpayers whose money is being dealt with. Is there an audit procedure that is in place to track loans, to ascertain -- I guess at the end of the day -- whether or not the decisions being made by All Nations Trust, which draws on financial resources provided by the province, are being made responsibly? To what extent does that audit function exist, if it exists at all?

Hon. D. Lovick: I don't think I can call it expressly an audit function, but there is certainly a reporting mechanism and reporting requirements in place to ensure that things are operating as they ought to. I'm going to read into the record something about that reporting requirement. It's a bit lengthy and rather technical, but I think this is probably the only way to satisfy the member's concerns. And they're legitimate concerns; I don't meant to suggest for a moment otherwise.

Before doing that, however, in case I haven't made it clear so far, let me emphasize that the purpose of the fund is to provide opportunities for business development. It is not an ongoing drain on the taxpayer. That's why it is a set-aside fund, and the amount of money available for the business purposes. . . . I see the member for Vancouver-Langara smiling, because he knows this very well; we've been through this before. The fund is entirely made up of the interest derived from the trust fund. It's not a constant regular annual drain. I think it's important to note when we talk about protecting the taxpayers interest that I think we are.

Having said that, let me talk briefly about the reporting requirements. First of all, the All Nations Trust Co. reports monthly to the Minister of Aboriginal Affairs on the dispersal of loans approved by the aboriginal capital corporation. I am advised that audited financial statements from the All Nations Trust Co. are available on request. In addition, there are particular reporting requirements as follows:

"On or before the last day of each month, ANTCO shall provide the province with a report of all program loans in the region containing such information that the province may reasonably require, including:

"(a) a description of each program loan not previously reported, as indicated in schedule C;

"(b) a report summarizing each active program loan including the date and amount of disbursements made by ANTCO, the date and amount of payments received by ANTCO, the balance of principal and interest outstanding, details concerning value and duration of loans and arrears, breakdown of loans by business sector, number of applications per region. As well, an accounting of the 2 percent borrower's fee collected by ANTCO from each borrower.

"ANTCO should also provide the province ANTCO's annual audited financial statements, and conflict-of-interest guidelines will be made available on request.


"At the beginning of each fiscal year prior to the lending of the contract for that fiscal year, ANTCO will provide a rationale behind the allocation of loan program funds to subcontracted lenders.

"For trust account payments made pursuant to this agreement, ANTCO and its trustees shall provide on or before the 15th day following the end of each month the following information:

"(a) reconciled current account and/or investment statement,

"(b) payments made on loans, and

"(c) statement of fees."


"ANTCO will inform the ministry when circumstances beyond ANTCO's control prevent delivery of the information within the agreed time frame. As part of a notification, ANTCO will inform the ministry of the anticipated delivery date.

"At the end of each fiscal year, ANTCO shall pay to the province all moneys it holds at that time which were collected as borrower's fee, and any interest therein, less ANTCO's administrative fees and disbursement fees."

Just the last point about loans:

"NAA reports approximately 977 loans issued since 1989."

I hope that's helpful.

M. de Jong: We have accomplished one thing, and that is to assist me in deciphering the documentation that was provided earlier this year. That's helpful.

Maybe I can summarize by making a statement that the minister can either agree with or disagree with. I take from his response to all of the questions, the last one included, that he is satisfied that there is a mechanism in place by which the funds are made available via this program to individual small businesses operated by aboriginal peoples, that there are safeguards in place to ensure that those loans are extended in a way that makes sense, that they are reasonable, that they are in accordance with generally accepted accounting practices and that his ministry is content -- and I don't mean that in a pejorative way -- to rely on the system that is presently in place and believes that the system is operated effectively to ensure good value for the money that taxpayers have invested in this program.

I will say, finally, that the minister subtly drew a distinction between funds that come out of the yearly operating budget versus interest funds that accrue from this capital sum. I think the minister would probably agree that the same degree of vigilance should be applied in both cases. In either case the obligation we owe to the taxpayers is the same.

Hon. D. Lovick: I don't disagree with any of the points made by the member in that brief summary. I don't disagree with any of the points that the minister is making either, for that matter. But referring specifically to the member, I would suggest only that the report we commissioned, the independent review, comes to essentially the same conclusions.

M. de Jong: Maybe a last point on this. The report that I take it I am going to see shortly -- does it include a more specific analysis of loans and successes and failures? Or is it more of a procedural examination of administration? I'm just not sure what I should expect to receive. I guess what I'm looking for is a document that approaches something of an audit and passes some judgment on the administration of the loan program.


Hon. D. Lovick: I need to make clear again that the review conducted was not an audit; it was not a financial audit. It was rather undertaken to review the efficacy of the program. Inevitably, of course, it would be looking at whether the program seems to be operating on a reasonable business basis. And I think I can fairly say, looking at the brief summary comments that I have here, that it draws that conclusion.

I'm just looking to see if there is anything else that I want to add at this point. As I look at the table of contents, I think

[ Page 15356 ]

that in terms of listing and identifying where the loans are and for what purposes, it will probably provide the member with the kind of information he appeared to be seeking. I would hope that's the case.

M. de Jong: Okay. Let's move on then. Under the particular goal and objective that we're looking at, the second one, which is the ministry-stated objective to support aboriginal social development, the ministry says that we should judge its performance in that area by looking at the number of aboriginal students obtaining a post-secondary education. I guess the ministry has statistics concerning where that is today and has a target in mind that it would like to achieve over the coming years.

Hon. D. Lovick: The particular measure that we offer is, as the member noted, the number of aboriginal students obtaining a post-secondary education. And the indicator we use is simply the number of bursaries issued. Last year that number was 118, I believe. Of course, we hope to be able to maintain the same.

Part of the difficulty, of course, with asking for specific information in terms of how you measure these things is that the ministry's part in ensuring more aboriginal students get post-secondary education is that we don't directly fund those kinds of things. All we do is have a small student bursary program. I think it is very good, but it certainly isn't the whole story. Rather, that concerns the post-secondary educational enterprise.

I guess what I want to do is to simply acknowledge the work done by other ministries in terms of achieving the same objective. Our part is obviously to encourage those objectives. I think post-secondary education, under the aegis of the Ministry of Advanced Education, would take huge credit. I certainly know from my visits to places like the University of Northern British Columbia and looking at the exciting and dynamic aboriginal studies program there or, for that matter, at the aboriginal studies program at Malaspina University College in Nanaimo, where I come from. . . . I think the Advanced Education Council of British Columbia could probably give us some encouraging statistical evidence to support the conclusion that greater numbers of aboriginal students are indeed going to post-secondary educational institutions.

Having said that, I would also be absolutely disingenuous if I didn't acknowledge that the number of aboriginal students in those institutions is still far below the level that I think any of us would wish it to be. I think we're all committed to trying to do what we can to encourage that.

M. de Jong: I agree entirely with the last part of the minister's statement. I just want to bring the discussion back to the context within which we're having it. I think we all agree that it is an objective the government would have and should have that we increase the number of aboriginal students pursuing post-secondary education. I thought, through all of that, what I heard the ministry say was: "Well, we don't really know how many aboriginal students are in post-secondary institutions today." If that's the case, then it strikes me as odd that we would list that as an indicator.


In fact, in drafting the document, the ministry chose to include the words "number of aboriginal students." There must be a number or an estimated number. I don't know where the ministry gets that number from. It might be the Ministry of Education or the Ministry of Advanced Education. That might be as good a place as any. It might be Statistics Canada. I don't know. Is there a number? If it's not available today, then all right, we'll get it. This really is about measurement.

Hon. D. Lovick: I am frustrated, and let me explain why. We are talking about performance measures of the activities undertaken by this ministry -- not all government, but this ministry. This ministry, as I think the member knows full well, is primarily involved in the business of negotiating treaties. We think treaties are germane to this particular objective. The only performance measure that I think the member would agree is probably defensible and supportable and quantifiable and that we can offer is the number of bursaries that this ministry makes available through its program.

My point is simply that this is a very legitimate performance measure if the criterion is: what is your ministry, the Ministry of Aboriginal Affairs, doing to support aboriginal social development and to try to increase the number of aboriginal students receiving post-secondary education? The measurement we offer is to say: "Here are the number of bursaries we give out."

M. de Jong: Well, no. You say two things.

Hon. D. Lovick: It's your turn, then, to stand up, and you can express the frustration -- through you, Mr. Chairman.

M. de Jong: I'm trying not to be unfair. I'm relying on the ministry's own document. The minister says: "The measurement we choose to employ" -- and he believes it's valid -- "is the number of bursaries." Actually, that's one of two measurements his document says they choose to employ. The other one is the number of aboriginal students in post-secondary institutions. I'm not quarrelling with the minister. But if we're not in a position to quantify that the way we are with the number of bursaries -- which I'm sure the minister has a number for; in fact, I think he already gave the number -- then it's not a performance measurement. We can test this theory right now. How did we do last year? Do we have more aboriginal students in post-secondary education today than we had 12 months ago?

Hon. D. Lovick: Eureka, Mr. Chairman. I finally figured out the problem. The problem is that the member is taking issue with the fact that there are two lines here, and one does indeed simply seem to be redundant. One is a restatement of what the other one is, or it embraces the same message. In other words, there is one performance measure here, not two.

If that is the member's contention, I think he's right. I think it is absolutely true that they are the same measure -- i.e., what it should probably say is "the number of aboriginal students obtaining a post-secondary education as measured by the number of bursaries awarded." In this instance, we can give the concrete, specific indicator, which is that 118 students received a bursary last year. And we hope to do as well or better next year.

The fact that we have two lines instead of one. . . . Somebody's head will roll, I assure the member. It's an outrage, and I'm sorry that I caused this confusion by not making it only one category. I accept the charge; mea culpa.

[ Page 15357 ]


The Chair: We must restrain ourselves.

M. de Jong: I wasn't intending to cause the minister the degree of grief that apparently I have.

Well, all right. Government as a whole is striving to undertake this performance measurement exercise, and maybe it's frustrating for the government as we sort of explore ways to make this meaningful.

The minister is telling me that if the objective is to support aboriginal social development, the performance measurement for the coming year will be the number of aboriginal students obtaining a post-secondary education, as measured by the number of bursaries awarded.

Hon. D. Lovick: That's the measure we offer.

M. de Jong: That's the measure. So 12 months from now, we will assume that the ministry enjoyed success if the number of bursaries awarded exceeds 113, which was the case this past year. Is that what we're saying?

Hon. D. Lovick: If I understood the member correctly, he was saying: would the performance objective be to increase the number -- i.e., more students receiving bursaries? Yes, the answer is true. I would love to. I won't for a moment say that I guarantee that would happen, but I would be very happy if it did.

M. de Jong: With the greatest respect to the minister -- I haven't done this before on other ones, because I think there has been legitimacy, and there may be a small amount of legitimacy here -- I think that's a crappy measurement. I'll tell you, you can find some money in the budget and award some extra bursaries, and, you know, there might not be one extra first nations person in a post-secondary institution. It is a pitifully poor measurement.

I think the objective here is sound beyond belief: we want to get more kids in school, in post-secondary education. To the extent that we can accomplish that and facilitate it with bursaries and loan programs. . . . But let's not lose sight of what the objective is here. Simply doling out more money to more students is not the best way of tracking whether we are achieving that overall objective. I think that will probably be my last point on the issue.

Hon. D. Lovick: Given that promise, Mr. Chairman, my response will be a quiet one. It is not simply a matter of doling out more money, nor is it a matter of simply saying: "Here is this money, with no strings attached." Indeed, the bursary program is available to assist aboriginal post-secondary students who are attending a recognized British Columbia university or college on a full-time basis. Moreover, they have to attain a certain grade point average. So there are those conditions, if you will, to ensure that it's not just a matter of throwing some money out there and hoping that aboriginal students, or would-be students or young people, would become students. Rather, it's those people who are serious students, who are demonstrating their commitment -- those are the ones we are assisting.

Therefore I guess I would simply reiterate the point I made. I don't think it's a bad measurement at all; I think it's a pretty good one. But the member and I can disagree. That's what this is all about. There's nothing wrong with that.

M. de Jong: Let's get down to the objective of facilitating support for aboriginal language and culture. I note that last fall, and I think the minister was back in his post when this release. . . . In fact, I'm certain it was, because it's in his name. The ministry announced that aboriginal language preservation will receive $300,000 this year from the province. That was in furtherance, I take it, of the objective laid out here. I was curious when I saw that -- whether or not that was money in the budget, reallocated money, new money, or where that came from. The announcement made it sound like an award of new money.


Hon. D. Lovick: That was reallocation within the budget. I don't mind explaining to the member that that was a decision I made in consultation with ministry staff. After meeting with various people and considering various presentations, I will state absolutely emphatically that I believe entirely the proposition that first nations present -- that one of the absolutely most important things to first nations in this province is that retention of culture and language, and I think every student of the subject would agree, is the principal indicator of a healthy and vibrant culture. To first nations people, preservation of language is hugely important.

Alas, we're in danger of losing those languages at an alarming rate. I said that if we can possibly do something to help out there, let's do it. I'm happy to report that we were able, not without some struggle, to find that money. Moreover, I would just add that this year we are doing more. I'm very pleased about that.

M. de Jong: How much more?

Hon. D. Lovick: This year MAA has received approval for a $750,000 allocation to support heritage, language and culture funding. That's through what we refer to as the heritage, language and cultural foundation.

M. de Jong: This is not meant to be cheeky, but tell me how that is consistent with the first performance measurement point, which says that the support for protection of aboriginal language and culture should be measured by the First Peoples Cultural Foundation dependency on government funding being reduced.

Hon. D. Lovick: The explanation is that they used to get more. The foundation was in danger of getting nothing. What we provided last year, in fact, was the equivalent, frankly, to emergency funding. Part of the funding that we have provided is indeed designed and dedicated to their hiring a fundraiser to help them.

Moreover, we are hopeful that this money will perhaps lever matching contributions from the federal government. That was the system we were hoping to have in place by now. We haven't quite succeeded. If we can get that leverage and if we can get that kind of help in the system -- that fundraising activity on their part -- the contribution would come down over time. That's our objective, but it's a matter, I guess, of making investments to try and achieve that end.

The member's quite right to point out that it looks, if we're increasing that much over last year, as if we are not

[ Page 15358 ]

living up to the objective. I hope I've explained that, as I say, last year was a kind of emergency funding, in the context of, years before, their having had significantly more money than we are now putting in.

[R. Masi in the chair.]

M. de Jong: Then with the benefit of that explanation, is the minister telling the committee, having then re-achieved a level of funding that he believes is appropriate for the support and protection of aboriginal language and culture, that from this budget allocation forward, the ministry's objective is to move towards reducing the amount of funding?

Hon. D. Lovick: That's correct, Mr. Chairman.

M. de Jong: Just a couple more on this document, and I'll try to go relatively expeditiously. The third goal that the ministry sets out for itself is its investment in our human resources. That is, the goal, the objective, is to increase diversity in the workplace. I am looking at page 9 in the document that I have been following.

I guess, broadly speaking, this is not a dissimilar discussion to the one we had around education. The performance measures are number of aboriginal employees, number of minority group employees, number of employees with disabilities and number of women at the senior management level. I think all represent measures of varying degrees of validity and helpfulness, but does the ministry have access and possess numbers that go with those various indicia? Let me ask if the ministry has access to numbers in each of those categories.


Hon. D. Lovick: The answer is yes, we do have that information. I don't think I have it with me at the moment, but I would certainly be prepared to share that with the member as quickly as I can obtain it.

M. de Jong: Okay, that's to clarify that the minister has the ability to provide statistical data as at a certain date -- I'm not sure what it is, but a relatively recent date -- for the number of aboriginal employees in the workforce, minority group employees, employees with disabilities and women at the senior management level. Let me ask the minister to confirm that.

Hon. D. Lovick: Yes, I can confirm that. Perhaps this is an appropriate time for me to draw attention to somebody that joined us later, after I introduced people at the table with me. The new assistant deputy minister responsible for negotiations in the ministry is Ms. Allison Bond, sitting directly behind me. So category 4, the number of women at the senior management level, si monumentum requiris circumspice -- if you want some evidence, have a look.

M. de Jong: Actually, that answer and introduction was more helpful than the minister might realize. This actually speaks to both, then, in the minister's mind: what's happening in the aboriginal community but, as much, what's happening within the ministry itself. I must confess that I hadn't read it with that in mind. It is fair to say that this is an objective and performance measurement that I might see in just about every ministry of government for this year?

Hon. D. Lovick: The member is correct that he may indeed see that measure offered in other ministries. If I can do a little bragging, I think our ministry is probably doing better in this regard than most, if not all, of the others. That saddens me too, because I don't think some others have been terribly successful.

M. de Jong: All right. Last, and the minister can nod in the affirmative. The reason he has those numbers at his disposal is because it speaks to interdepartmental individuals, as opposed to what's happening out in the aboriginal business world. The minister is nodding in the affirmative.

I wonder if we might move to another matter I signalled at the beginning of this exercise that I wanted to canvass. I'm going to try and do this carefully and sensitively. That is the question of the Métis Provincial Council of British Columbia.


Ironically, I noticed the day after I mentioned that we were going to talk about this -- I think coincidentally -- an article appeared in the Vancouver Province which at least references the document and the exercise that I would like to explore momentarily. This followed somewhat on the discussion we were having about the First Citizens Fund and the degree to which safeguards are in place around the transfer of money.

I'll preface my remarks this way. One hears, with respect to all governments -- local, provincial, federal, aboriginal -- allegations of abuse and misuse of funds and irresponsible conduct. Senior levels of government have auditor generals and audits and procedures built in. They don't eliminate all of the abuse, and they certainly don't curtail all of the irresponsible spending, but those processes exist.

There is an increasing desire or concern on the part of first nations individuals that similar safeguards exist with respect to the governments that are being constructed and will have an impact on their lives. Also, it's fair to say that non-aboriginal people, who are contributing to the financing of those governments, continue to have an interest in ensuring that the expenditures are taking place in a responsible way.

I have a document relating to the Métis Provincial Council of British Columbia. I should say that the relevance of this, which generally involves federal dollars. . . . I note that the province also contributes almost $200,000 to this organization; $190,000 is the figure referred to in the audit. Maybe I should. . . .

I see some puzzled faces. I will indicate that the document, "Human Resources Development Canada Review of Operations, Métis Provincial Council of British Columbia for August 1999," indicates that the funding organization, Aboriginal Affairs B.C., contributed $190,000 to the Métis Provincial Council of British Columbia.

Hon. D. Lovick: Could you repeat that, please?

M. de Jong: Yeah. The document is "Human Resources Development Canada, Review of Operations, Métis Provincial Council of British Columbia, August 1999." That document, at page 13, indicates that Aboriginal Affairs B.C. contributed $190,000. Is the minister and the ministry able to confirm funding to the Métis Provincial Council of British Columbia?

Hon. D. Lovick: I can confirm that the province contributed a total of $75,000 to the Métis Provincial Council of B.C.

[ Page 15359 ]

last year. All of those funds were for negotiations support. I'd ask the member to repeat that because I think it referred to aboriginal-something B.C. or whatever.

M. de Jong: Aboriginal Affairs.

Hon. D. Lovick: Yeah, Aboriginal Affairs. I think they're probably referring to the generic category of aboriginal affairs rather than the ministry, and perhaps they're referring to other line ministries. For example, I think perhaps Education and Health have some arrangements with MPCBC. Our contribution, as I say, is $75,000 for a very particular purpose.

M. de Jong: I think my purpose was purely to establish a funding link between the ministry and the organization, and it appears that we have done that.

The first question is: does the ministry have the document I am referring to that was commissioned by Human Resources Development Canada -- the review of operations for that provincial organization?

Hon. D. Lovick: We have information on the report. Alas, we don't seem to have the actual document -- despite, I gather, our efforts to try and get one. I don't know why that is. No, we do not have the document, but I think we're certainly familiar with the conclusions in it.


M. de Jong: It's not my purpose to try and belabour this, but I do want to use this perhaps as something of a case study in how these things occur. At page 2 of the report. . . . I'll just read the paragraph, under the heading " 'Background":

"Recently certain concerns have been raised by HRDC program personnel and other interested parties regarding the financial program operations of the Métis Provincial Council of British Columbia in relation to the funding under a regional bilateral agreement. It has been reported that funds advanced to MPCBC and in turn to the MPCBC's regional member organizations may not have been used for the intended programming purposes. Concerns raised include, but are not limited to, third-party reports or allegations of irregularities in the disbursement of funds, unaccounted funds, self-dealing, lack of accountability in the allocation of funds to member groups and possible conflicts of interest."

The review was conducted during June and July 1999 and involved. . . . It says here that the review was limited to operations in the Métis Provincial Council of B.C.'s Surrey office. The amount of money involved here from various sources, mostly federal, was $3.5 million.

Maybe the best way for me to do this is just to go through the findings and ascertain what the ministry's reaction or action has been in response. Under the heading "Review, Qualifications and Comments," the following is written: "We have included in the reviewed amount $81,879 paid in relation to project training provided by Macrolink Administration Ltd. for the provision of certain forestry training services and $73,951 paid to the United Heritage Métis Association for the provision of a Métis communication training program." We were unable to confirm that these projects were carried out in a fashion that satisfies HRDC program and financial requirements.

It then begins to break down some of the findings. It talks about a contract with Macrolink for services to be provided in 1998 through to 1999. The services to be provided included developing a proposal to access funding from MPCBC. That was not considered an eligible program expense. In fact, it goes through a whole list of things that were considered ineligible in terms of that application.

Some of the findings, though, are pretty troubling. There was an amount of $90,000 for the provision of certain forestry training for 12 students for a three-month period. Based on the documentation that these auditors were able to uncover, five students withdrew from the program within 15 days of the start of the program, and during the last two weeks of the program, only two or three students were in attendance. A majority of the student applications were not available. They were incomplete or were not signed, and therefore employment insurance eligibility checks were never completed.


Apparently one of the findings was that the Métis Provincial Council of B.C. reportedly entered into a contract for the provision of welders' helpers training to be provided by an individual. An advance of 90 percent of the cost of this project, or $12,114, was provided to the contractor prior to the commencement of the training. Based on the documentation that was made available, the auditors were unable to confirm that the training was ever actually provided. That was relating to an amount of $12,000.

On December 15, 1998, the Métis Provincial Council entered into an agreement with an individual in relation to a program referred to as Project Unity. Payments under that contract amounted to $20,920, but based on the information that was made available, the auditors were unable to determine the nature of the project and how it satisfied program eligibility.

There is reference made to a lease for rental of office space in Maple Ridge at $966 a month, effective May 1. Apparently that office space was vacant for a period of months. There is a litany in this document: two individuals had their tuition of $2,566 for computer training paid for by the Métis Provincial Council and were provided with $1,000 a month living allowance. The living allowance was paid for the period March to June 1999, even though these individuals only attended classes for two or three days per month.

Pretty serious findings, pretty serious allegations in fact are contained within this document. Firstly, if the federal government has not shared in totality its finding with respect to the agency that it has conducted this audit on, then I think that must be troubling for the minister. Assuming it has, the question that begs asking is: what steps has the provincial government taken insofar as dealing with an organization. . . ? The nicest thing I can say is that their credibility has been dealt a serious blow.

Hon. D. Lovick: Let me start with the last blunt point. The provincial action we have taken is that the Métis Provincial Council of British Columbia is receiving zero dollars from this ministry this year. The member has read a great deal into the record, and that's perfectly legitimate on his part. I would hasten to point out, however, that all of it that he refers to is, I think, about program funding administered by the federal government.

In this provincial government ministry, we do not administer or make use of program funding. Our funding is entirely based on contribution funding -- or what we refer to as

[ Page 15360 ]

contribution funding. For the record, I would like to make clear just what we do under that heading of contribution funding. We are very zealous, Mr. Chairman, about protecting the taxpayers' interest and, frankly, also protecting the first nation -- or, in this instance, the Métis.

The last thing that anybody wants to happen is for there to be any kind of suspicion about lack of accountability, inappropriate use of funds and so forth. I think that first nations would be one of the first to say so. Indeed, I would note in passing that the report the member quotes from was in fact the result, in significant measure, of complaints by Métis organizations in the province saying they thought something was wrong with the Métis Provincial Council. The people themselves were obviously very apprehensive and concerned and said that we must do something to correct that. I would make that point, but I don't think there is anybody -- except perhaps those who are the guilty parties, if I may use that phrase -- who would in any way try to defend the kinds of things that are there.

I can't resist saying that this is probably also the continuing saga of HRDC and the lack of appropriate controls in terms of the funding that it administers -- as we have witnessed for some months now in Canada, alas.


Back to my point about our mechanism to ensure financial accountability in our contribution funding to first nations. First of all, we're guided by the Financial Administration Act, as I pointed out yesterday. Also, that and other provincial financial policies regulate all provincial expenditures, including those to first nations. In other words, we have a regime by which we attempt to protect taxpayers and to ensure that things are done properly, correctly, legally and responsibly, and any dealings we have with first nations are subject to the same rules.

That's simply to say, of course, that the Ministry of Aboriginal Affairs adheres to these policies in making contributions for specific projects. We're very careful of that. Accordingly, contribution agreements that we make are subject to a rigorous internal review process. They contain clearly defined deliverables, reporting requirements and budgets. Moreover, the ministry ensures that clear justifications and budgets are set out for all contributions to first nations. We monitor the project and receive and review written reports and financial statements, and we hold back final payments to ensure satisfactory completion of the project.

Our contribution funding and our policy were audited by the internal audit branch of the office of the comptroller general in October, 1999. The report was certainly positive. In particular, the report stated that financial controls are adequate and that the conditions, the deliverables and the reporting requirements are clearly defined. Notwithstanding the fact that I think we came out very well in that review, MAA is now in the process of revising its policies and procedures on contribution agreements to ensure that we improve our performance monitoring, evaluation and documentation. I want to get that on the record first, Mr. Chairman, if I may.

At the risk of taking too long in my answer, let me also say just a little bit about the matter of Métis financial accountability. First, I would make the point that there is indeed no link between the federal review of Human Resources Development Canada funds provided to the Métis Provincial Council of British Columbia and any funds provided by the provincial government. There is no linkage there -- which, needless to say, I'm pleased to report.

Funds provided by the province, by us. . . . Seventy-five thousand dollars were intended for negotiation-support funding. What that means is negotiators' fees, travel, research and overhead to ensure MPCBC's active participation in negotiations that were designed to ensure more efficient and effective program delivery to the Métis communities in B.C. We offered to assist, because they were obviously setting themselves up as the organization that would coordinate the delivery of those services. We agreed to assist in helping them ensure that was done well.

As I say, contributions to the MPCBC were subject to precisely the same rigorous standards and controls regarding spending, accountability reviews and so forth as all other contributions to first nations. They were subject to the same screen, as it were. The expenditures that we approve, we demand, have to concur with the approved annual workplan.

The MPCBC -- we know, obviously, from conversation -- is currently engaged in the process of reorganizing, as I think we all recognize. I say this more in pity than in judgment. They simply have not been able to sort out their fights within and get organized and to take charge of that organization and operate it the way I think the majority of Métis people in this province would certainly wish it to operate. Accordingly, they are reorganizing and trying to get it back together, and we are not pursuing any tripartite negotiations with them until such time as they can demonstrate to us that they have done that.

There's a quick response for the member. Certainly if he has more questions, I'd be more than happy to answer them.


M. de Jong: It sounds from the minister's response that in spite of having been alerted to the very troubling findings included in the federal audit, the ministry has taken whatever steps it felt appropriate to review the dispensation of its own $75,000, and it is satisfied that none of those funds were in any way misused or utilized and expended in a way that would be contrary to the ministry's policy and the purposes for which it was intended.

Hon. D. Lovick: The member is right. We have concluded that they did what they were asked to do.

M. de Jong: Was the ministry able to come to that conclusion in the matter of course, or did they, as a result of receiving the information contained in the audit report, undertake any extraordinary or additional reviews of their own?

[D. Streifel in the chair.]

Hon. D. Lovick: No extraordinary steps were taken. Rather, the organization followed the workplan that we had stipulated, and for us that was sufficient evidence that they were indeed doing what they were supposed to be doing, and there was nothing untoward in those activities.

M. de Jong: I don't generally read anonymous documents or letters into the record, and I'm not going to read the whole letter here, but this was the letter that came with the

[ Page 15361 ]

copy of the audit report that I got. I read it to emphasize a point that I think has already been partly made. It relates to the interests of aboriginal, Métis and non-aboriginal peoples in ensuring that these public dollars are expended wisely.

This person -- and it is an unsigned letter -- says: "This Audit Canada document is brought to your attention on behalf of the many responsible Métis citizens in B.C. . . . The practice of wasting Métis funds on trumped-up excuses for travel and living off expense accounts must be stopped. This audit document shows misuse of funds within the organization, yet HRDC has taken no action to return these funds from the pockets they ended up in."

This is the letter from a very angry and frustrated Métis. "This is not self-government," this person concludes, "this is self-indulgence." That is a concern that I'm sure the minister hears and I hear and that members of the assembly hear over and over again.

I guess the minister has already partly answered this question -- well, actually he hasn't because I haven't asked it. He has alluded to the safeguards, the measures in place provincially to protect against the kind of abuse that is revealed in this federal audit document.

I guess the question that arises from that, however, is this. How do people like the author of this letter and first nations people, Métis, non-aboriginal peoples. . . . How did they hear about this? When the government decides that it has to withhold money. . . . The minister referred to that, so I presume it has happened in the past. In fact, I know it's happened in the past. How do the constituents -- aboriginal and non-aboriginal -- hear about that? Or do they have a right, in the minister's mind? I presume the ministry and the government apply these requirements with great care, and that the step of withholding money is one that is exercised very reluctantly and only after there is the establishment of serious problems within the administration that the money is being transferred to.


How do people hear about that? Do they have a right to hear about that as a matter of course -- that a government or a body that is exercising authority over their lives and authority over their money has been found by another government to be acting improperly? Do they have a right to hear that, when government makes that determination?

Hon. D. Lovick: I think the question is, dare I say, more philosophical -- and welcome just as much thereby.

I think they do have a right. I think the prudent response in terms of the government obviously would be to say that, but to be reluctant to trumpet, for fear that one would appear to be malicious -- going and singling out and being vindictive or something of that sort -- but nevertheless, obviously, to protect the public interest.

In broad terms there's an answer, but in terms of a more specific question -- how does one notify and all of that -- I have a suspicion that I may know the anonymous author of your letter. I say that just to answer the question: "How does one know?" At risk of prolonging this exercise longer than anybody would wish, let me just tell the member a story.

I was in Banff, Alberta for a meeting -- I'm trying to remember what the particular conference was. In any event, it was an important conference, and I was making a speech to the audience and talking about what we in B.C. were doing, and how proud we were of our efforts to settle treaties and so forth. There was one very irate guy standing at the back of the room who was saying: "Well, look, you may be doing all that stuff for first nations and status Indians, but by God, you aren't doing anything for our people, and I'm resentful of the fact that you would even suggest you were." He was really angry.

The conclusion to all of that is that I met with this man after, and we had a good chat. He proceeded to give me a version of Métis politics in B.C., in terms of, yeah, there were some people that you couldn't trust and were crooked, etc.

I tell that story to make this point: that it didn't surprise me when I heard, because I probably met with at least half a dozen other spokespersons and organizations within the Métis community in the province. The Métis community in British Columbia, the member might like to know, is much broader and bigger than most of us recognize. Métis for the most part are not exactly as visible as other first nations. There are 64 registered Métis societies currently recognized in B.C. The MPCBC head office is based in Surrey, but there are seven regional offices within the province. Where I come from on Vancouver Island, there's something called the Vancouver Island Métis Association, which I think at one point was affiliated with the Métis Provincial Council of B.C. But depending on what day of the week you may be talking to people, they're bitter enemies and protesting what MPCBC talks about.

I guess my point is this: I think there's a very sophisticated functioning network in terms of Métis organizations and people in this province. And if the province is unhappy. . . . We do, as a matter of course, have a holdback in terms of our contracts with all first nations groups with whom we deal. If we don't get adequate satisfaction of the performance objectives, everybody will know it instantly. And any dealings we have had with anybody within the Métis population in B.C., I know, will be known within 48 hours throughout the province by all the Métis organizations.

So that's anecdotal rather than quantifiable, but it's an absolutely true story. I think it makes the simple point that we do make it very clear to other organizations, of the kind the member's question referred to, that here is when we are happy and content and think things are proceeding adequately and think that the other people across the table from us are performing their part of the exercise in an acceptable and honourable and honest and forthright way.


M. de Jong: I don't necessarily doubt the accuracy of the description of how the pipeline works in the case that we're discussing. But maybe let me just ask this question. I don't know the last time the ministry had to take the extraordinary step of withholding funding from a band or first nations organization on the specific basis that it had concerns about accounting practices relating to those moneys. I don't know when that happened last, and I can ask the question. I don't know if the minister would give me a reply. But if he's not able or willing to tell me, for any number of reasons, then I have to also conclude that there are probably first nations people who are part of that group who also didn't know.

So it helps to have a specific example. In the last instance when the ministry had to withhold funding under those cir-

[ Page 15362 ]

cumstances, did notice go to the membership? Was the membership made aware that their governing body was being questioned in that way?

The Chair: Minister?

Hon. D. Lovick: Ah, okay. The member is answering my confusion, Mr. Chairman, regarding the question.

The question concerns all first nations organizations and all our dealings. The deputy advises me -- and he's been in this role as a senior negotiator and, ultimately, deputy for some time now -- that he can't recall any instance when, for things like accounting practices, we have decided that we would withhold funding. The only instances that come to mind, apparently, are things in which the workplan has not been completed quite to our satisfaction. Therefore, as a way of saying we want it completed to our satisfaction, we will say: "Until X and Y and Z are done, this amount will be withheld." But other than that, all of our dealings, I think, have satisfied our requirements in terms of accounting and forthrightness and so forth.

M. de Jong: All right, it sounds like the minister is telling me that his ministry, in the last couple of years, has not run across a situation where suspicions of lack of accountability and lack of proper spending business practices has given rise to the withholding of funds or any other kind of retribution, if that's the correct word. Imposition of sanction, I guess, might be the proper terminology.

But we do hear these complaints. How does the kind of gentleman that the minister may be better acquainted with than I am, or others who come to the minister and come to me -- and some of them are first nations people, and some of them are non-aboriginal people -- with these stories of abuse and of wasteful spending. . . ? I know that a lot of that can involve federal dollars and that they assume a responsibility here, but sometimes it involves provincial programming dollars. How do they capture. . . ? Where should they be going to obtain some level of investigation or review of the concerns they are expressing?

What you usually get is the complaint and then the frustration that, "I've told any number of people, and nothing seems to get done," and "I can't talk to my band council," or "I can't talk to the governing body" -- because they, of course, are the source of the problem, in that person's view, in the first place.


Hon. D. Lovick: I guess I'm struggling a little bit with how I might answer the question, simply because of the lack of specificity. I don't say that to find fault; that's not my intention. The difficulty I guess I'm grappling with is that I'm not sure what the phenomenon is we're discussing. If it has to do with those rather sad allegations and various reports that have been issued in recent times about first nations governance and band councils and allegations of improper spending and accountability -- in other words, the same kind of thing we see in the HRDC report regarding Métis Provincial Council. . . . So we're all aware there are other kinds of reports about first nations governance issues than that. I'm aware of those.

For the most part, of course, those are federal jurisdiction, and therefore we simply don't have the clout or ability to investigate. If it's about off-reserve allegations that say programs that the provincial government may be involved in -- let's say something like a program done with forestry, whereby you have an aboriginal youth training crew or something going out and doing some juvenile spacing, or something like that. . . . If concerns about that kind of program are offered, then the individual who says that something outrageous is going on there and it shouldn't be, can of course write to this ministry or whatever ministry is involved -- say Forestry, or something like that. Also, of course, because it's no longer talking about the reserve -- purely federal jurisdiction -- then something like a provincial ombudsman's office can, in fact, have an influence and jurisdiction to investigate.

My position, I guess, is this: those areas for which we are responsible and in which we are distributing funds are ones where I think we are doing an exemplary job of protecting the recipents as well as those responsible for providing the funds. I think the accountability measures I laid out in the beginning, in terms of what it is we do and what the basic rules are by which we govern ourselves in terms of all our contribution agreements. . . . I think those hold; I think those obtain.

If the member has some more specific and particular instances that he could give me, I would certainly be more than happy to address them, but in general, I think I've answered the question.

M. de Jong: Maybe the last kick at this is to. . . . Having heard the minister's response to the question about examples of past withholdings, is he able and prepared to provide a listing of investigations? I'm not sure that's a fair question. I'm not sure it's fair to the people who might be implicated, even if the minister answered it. What I guess I'm hearing is that investigating allegations of improper spending, improper accounting practices and improper governance practices is not something that the ministry has undertaken over the course of the past year. It hasn't done it, because it hasn't received allegations or complaints that, in its view, justified those kinds of investigations. If that's the case, then I'm not here to make an issue out of something that hasn't been an issue for the ministry.


Hon. D. Lovick: That is indeed the case.

M. de Jong: Let's hope, then, that that remains the case.

Let's do a bit of a treaty update. We've done some of this already in an ad hoc way, and I'll try not to repeat. I think I said at the outset that I wanted to just pick a region of the province through these estimates, and I think I said that we'd look at the south. Just so the minister knows, what I've got is the update document for April 2000 that his staff kindly provided to me, and I've got the document that we used last year -- April 30, 1999. I'll just try to keep these questions short and to the point.

The first band listed is the Katzie first nation. We had a discussion about Katzie last year in a different context, it being a relatively small band. But it's not quite as small this year as it was last year. The first question I just want to ask. . . . Last year there were 370 members of the Katzie first nation; this year there are about 44 more. Who gives those figures to the ministry? Do they come from a federal agency? In a couple of cases, the growth is quite astounding, so I'm just curious about who has responsibility for providing that figure.

[ Page 15363 ]

Hon. D. Lovick: I'm sorry; I'm listening.

The Indian registry, which is part of the Department of Indian Affairs and Northern Development. . . . The two figures that account for difference are, typically, birth rate and, second, applications for status.

M. de Jong: Well, birth rate would be the obvious one. There are a couple where the growth -- or the decrease, in the case of the Stó:lõ -- is quite dramatic. Does the ministry try to verify, if it sees an increase or decrease out of proportion to what one might normally expect with birth rates? Does it examine what might account for that?

Hon. D. Lovick: I think the discrepancy is explained by the fact that the figures we're presenting this year have been verified by DIAND -- Department of Indian Affairs and Northern Development -- whereas the ones that were submitted last year were not verified.

M. de Jong: Okay, so these figures have the stamp of approval from the Department of Indian and Northern Affairs, which is different than last year. The Minister is saying that that's the case.

With Katzie, am I missing something when I compare the status description in the April 30, 1999, document with what appears in the April 2000 document in suggesting that -- on the face of it, at least -- there hasn't been any progress at the negotiating table, and there haven't actually been any meetings?

Hon. D. Lovick: The member's correct. Nothing is really happening at that table.

M. de Jong: Well, a lot is happening with respect to the Musqueam first nation in several quarters. But comparing the description as it relates to the treaty-negotiating update, the conclusion one comes to is that it also has reached something of a stalemate for the moment.


Hon. D. Lovick: The member is correct. The explanation, I gather, is that the sticking point is compensation. The Musqueam are saying that they will not proceed with a framework agreement until we resolve that issue. Both Canada and British Columbia have a position that we have articulated consistently and for some time now: compensation is not part of the treaty discussion.

M. de Jong: And prospects for progress on that issue with the Musqueam. . . ?

Hon. D. Lovick: The politic answer is that the prospects remain the same as they were last year.

M. de Jong: The Squamish nation and the status description there contain a slight change. Mention is made that the Squamish nation has indicated that it's ready to sign the framework agreement. Beyond that, however, I note that there were apparently no meetings in the past 12 months and again -- on the surface at least, beyond that indication of a willingness to sign -- no progress, although that might indeed represent significant progress.

Hon. D. Lovick: Two points. One is that we are engaged in other negotiations beyond the main table negotiation about the standard treaty issues. The second is that it would be hard to overstate the impact and importance of the passing of Joe Mathias. Effectively, that will stop everything in the Squamish nation at the moment.

M. de Jong: Certainly the impact of Chief Mathias's passing is one that shouldn't be underestimated, and I'm glad the minister mentioned it. The reference to the preparedness to sign the framework agreement, however. . . . What are the prospects for that being acted upon in the near future, or when is it the minister's expectation that that step will be taken?

Hon. D. Lovick: There are a couple of issues that would serve to explain this. One of them. . . . I have to be a bit careful about being specific, but what I can tell the member is this: Squamish has been negotiating a very big, major cut-off claim with the federal government now for some time. That has certainly absorbed all the energy of the leadership and all the ability they have to carry out negotiations. That's probably the best explanation as to why we're not having any other meetings.

M. de Jong: Is it the minister's expectation, though, that the framework agreement would be signed during the course of the year?

Hon. D. Lovick: That is our hope -- predicated, though, on the premise that the specific claim will probably have to be adjudicated first before we can actually make that happen.

M. de Jong: Tsawwassen first nation -- the first thing I noticed was the decrease in population of, I think, 25 members, which is significant when you've got a 200-member band. Does the minister know if that is related to the arrival on the scene of the Wilson group?

Hon. D. Lovick: The answer is no.


M. de Jong: Then presumably just a more accurate accounting by DIAND.

Hon. D. Lovick: That's correct.

M. de Jong: The status report indicates that a meeting took place on April 28, which perhaps would elevate this from the inactive to active-and-hopeful category. What happened on April 28?

Hon. D. Lovick: The member will note that it says: "CN will meet April 28." That's code for chief negotiators -- theirs and ours and the feds'. What that is also code for is that it's not so much about the substantive issues. When the chief negotiators sit down, it's usually to work out the process and the protocol agreement as to where we will go from here -- how we will proceed. So they're a good indicator of progress being made but not normally about the substantive matters.

M. de Jong: I can't remember whether, when we had the discussion about the bands that the minister felt might actually achieve agreement-in-principle during the course of the year, he included the Tsawwassen. I'm going to ask on this

[ Page 15364 ]

one whether he could refer to that -- because I think there is some interest locally -- and whether he believes that might actually occur.

Hon. D. Lovick: The Tsawwassen first nation is in the group of I think about ten that we talked about as possibly some of them achieving an offer within the next relatively short while -- by the fall perhaps -- and conceivably an AIP within the next year. Notice that I'm saying "within that group of ten."

M. de Jong: Can we go to the Stó:lõ? The minister had an exchange with the member for Chilliwack about one of the bands. I'm not planning to rehash all of that. I do, however, note a dramatic reduction in the population. In April '99 we were dealing on the basis of there being 5,000 members of the Stó:lõ nation. That's gone down by over 1,500 in the intervening 12 months. What accounts for that? Surely it's not just more accurate counting.

Hon. D. Lovick: The two competing figures are the Stó:lõ statement of intent versus the DIAND figure, and what we have here is the DIAND figure.

M. de Jong: Is the province in negotiating -- to the extent that negotiations are taking place -- on the basis of the DIAND-reduced figure?

Hon. D. Lovick: That's correct. Indeed, that is the pattern for all negotiations. The DIAND figure is the one we use.

M. de Jong: Is that the subject of dispute now? Presumably that has some fairly significant financial implications insofar as settlement negotiations are concerned.

Hon. D. Lovick: No, that doesn't affect the negotiations, because we don't function on a strict per-capita basis -- though it guides us.

M. de Jong: I understand that. But presumably the folks negotiating on behalf of the Stó:lõ will be making their case as it relates to their population and their need for land base and compensation -- no secret that it is a significant issue. I'm not asking for this to be resolved. I'm just asking whether it is a bone of contention at the table right now or whether the Stó:lõ accept the figure that appears here. If it's a question of a hundred on either side of the figure, fair enough. But if there's a larger dispute at work here, it would be helpful to know that now.


Hon. D. Lovick: There is no requirement in our negotiation process and protocol to agree on the figure.

M. de Jong: I'm sorry?

Hon. D. Lovick: Would the member like me to repeat that? I'm just saying that in our negotiation process and rules of engagement, there is no requirement to agree on a figure.

M. de Jong: Okay, just a couple of things. I don't want to dwell on the Cheam situation, except that it is unclear in my mind at this point whether -- to put it bluntly -- they're in or whether they're out, insofar as the Stó:lõ themselves are concerned. I'm not sure I know what the situation is there.

Hon. D. Lovick: The member isn't alone in wondering whether they're in or out; I think it changes. All of us who've looked at it and struggled with that. . . .

Let me give you the most updated information I have. The parties are now attempting to clarify the Cheam's role in the treaty process. Officials of the B.C. Treaty Commission are trying to ascertain the Cheam's status, and they're dealing directly with both the Cheam and the Stó:lõ on this issue. The basic problem was that the Cheam signed on to the statement of intent but, I think, have been conspicuous by their absence for a while. . . .

A Voice: And they've also claimed that they're not part of the treaty process.

Hon. D. Lovick: Yes, and they've also declared that they aren't part of the treaty process. So everybody, I think, has been struggling to find out just whether they're in or they're out.

M. de Jong: Does that require the execute of some sort of documentation by the Stó:lõ, both internally and with the other partners at the table, to signify that they are now -- contrary to what appears in the letter of intent -- negotiating on behalf of bands exclusive of the Cheam? Is there a formal process that has to be followed?

Hon. D. Lovick: Yes, there is a formal requirement to submit an amended statement of intent. That's part of the BCTC process, and the parties are certainly aware of that.

M. de Jong: Will that happen prior to. . . ? Is resolution of that issue a prerequisite to continuing with the substantive negotiations in stage 4?

Hon. D. Lovick: Yes, that's true. I'm sorry, I wasn't sure I understood the question. If the question is whether we can resume main table negotiations with the Stó:lõ before resolving the status of the Cheam, the answer is no, we cannot resume those. We must do that, for reasons that I think we've explained earlier.

M. de Jong: Okay, that's helpful. So the references made here that B.C. postponed main table sessions for April 5. . . . I take it that related to the situation with the Cheam -- the road situation, the threat of blockade. So the first order of business with Stó:lõ now, before anyone gets back down to business, is a document or an amended statement of intent from the Stó:lõ that clarifies the status of the Cheam within that organization.


Hon. D. Lovick: That's correct -- or if the Cheam steps down and halts its direct action activity. That's simply because they haven't yet formally withdrawn from the treaty process. So, if they were to give us that signal -- that they want to be part of it -- by simply ceasing that action, then they could indeed be part of the table, and we would recommence.

M. de Jong: I thought there were two -- that they weren't necessarily tied. I thought that prior to the most recent action

[ Page 15365 ]

the Cheam had taken, they had already signalled their unwillingness to be part of the Treaty Commission process. Therefore having done that, the subsequent action and their curtailment of that subsequent action wouldn't necessarily be taken as a signal that they wanted back in.

Hon. D. Lovick: This gets a little confusing, but the Cheam have said publicly to us that they do not want to be part of the treaty process. However, they have not made the formal declaration, if you like, of their withdrawal from the process. I know that sounds like a fine point, but I submit it's an important one.

M. de Jong: No, quite the contrary. I think it's the kind of thing that the ministry might be confronted with in the future where there are groups. . . . It's the question: can a single component to a larger body hold that larger body ransom? If the Stó:lõ shouldn't be made to suffer because a member of their group can't make up its mind or is being coy about what its mind might be -- that's the interest. If the Cheam have said to the province, "We don't want to be part of the process," but on the other hand refuse to provide formal notification of that to the Stó:lõ, that leaves the Stó:lõ in a bit of a tough position. How can a component part of that body be forced to fish or cut bait, for lack of a better word?

Hon. D. Lovick: It seems an appropriate metaphor, given Ferry Island and all of that.

The answer is that the Stó:lõ at some point -- the rest of the confederacy, if you will -- can choose to say: "We're excluding them from the treaty process."

M. de Jong: All right. That's helpful. So there would be no reason for the Stó:lõ to say at some point in the future: "Our hands were tied." They control their destiny to that extent, by having the ability to exclude a member of their group.

Hon. D. Lovick: That is true, with only the caveat that it could depend, I suppose, on their own decision-making processes. They may have some internal protocol governing the Stó:lõ nation.

M. de Jong: Beyond that, the status report suggests little in the way of formal progress, although a meeting took place on April 7 to reschedule the main table. I don't know whether that happened or not, in light of the situation earlier in April.

Hon. D. Lovick: Just to bring the member up to date, the main table has now been rescheduled for May 26. The purpose of the main table discussion is to present an exchange of visions as a constructive beginning of the agreement-in-principle stage.

M. de Jong: But as things stand today, with the postponement or suspension of talks, would that meeting occur with the Cheam on site? Would that meeting occur or have to be rescheduled pending resolution of that issue?

Hon. D. Lovick: There will have to be resolution not necessarily of just the blockade but rather the larger question in terms of the formal notification on whether they're in or they're out.

M. de Jong: Okay. I just want to make sure I get this right. If that meeting were scheduled for tomorrow, it wouldn't happen?

Hon. D. Lovick: That's correct.

M. de Jong: Yale first nation had some federal litigation going that represented an impediment. Has that been resolved?


Hon. D. Lovick: I'm sorry; I don't have that specific answer. I'll certainly get it for the member.

The Chair: Shall vote 10 pass?

Vote 10 approved.

Hon. D. Lovick: I move the committee rise, report resolution and ask leave to sit again.

Motion approved.

The committee rose at 5:46 p.m.

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