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



TUESDAY, MAY 9, 2000

Afternoon Sitting

Volume 19, Number 12

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The House met at 2:07 p.m.

Hon. H. Lali: I request the chamber's indulgence while I make several introductions. Joining us today in the gallery are some very important taxi industry representatives from around British Columbia, here to witness today's introduction of a bill to amend the Motor Carrier Act.

The people very patiently waiting and joining us today from the taxi industry are Mohan Kang, president of the B.C. Taxi Association; Mohinder Mann, president of the Vancouver Taxi Association; Gordie Hundel, vice-president of the VTA; and John Palis, coordinator of the VTA; and, as well, Subag Singh, Ted Allen, Chanchal Heer, Sohan Mehat, Tim Land, Don Guillault, Amrih Mahal, Mike Reeves, Steve Bzara and 15 other representatives from the taxi industry.

Also joining us are key people from within the ministry who worked extremely hard to make sure that the standing report implementation would come forward. They are Chair Claude Heywood and Jan Broocke from the Motor Carrier Commission. Also from the Ministry of Transportation of Highways -- and, by the way, the person who perhaps deserves the most amount of credit -- there is Kirsten Pederson as well as my deputy minister Claire Dansereau, to whom I'm continually grateful for the ongoing good work.

Hon. Speaker, I would like to ask the members of this House to please make all of the representatives from the taxi industry and my guests welcome.

C. Hansen: We're joined in the gallery today by 92 students from Little Flower Academy in the riding of Vancouver-Quilchena. They're accompanied by three teachers: Matt Coady, Karen Corness and Maureen Lyons. I hope the House will make them very welcome today.

E. Walsh: Hon. Speaker, I am really pleased today to introduce to the House seven members of the political action committee for the Hospital Employees Union. These committee members represent members from all over this whole House here, so I know that everybody is really going to make them welcome today. I'd like to introduce Cicera Ferreira, Dave Johnson, Nancy Hamilton, Iris Reamsbottom, Julia Amendt, Don Allen and Kristina Vandervoort. I would ask the House to please give them a really warm welcome.


Hon. J. Pullinger: Today I am honoured to introduce someone who I believe is well known to both sides of the House -- certainly to this side of the House. Mr. Jim O'Dea has been chair of B.C. Housing since 1997 and, I think everybody would agree, has done a superb job of that.

As well as welcoming him to the House today, I want to acknowledge an accomplishment. Recently, at the Canadian Housing and Renewal Association's annual conference in Mississauga, Ontario, Mr. O'Dea was awarded the prestigious Graham Emslie award. He was presented that for "commitment to community-led housing solutions from Newfoundland to B.C. over a long and continuing career as an affordable housing activist." Hon. Speaker, that's quite an accomplishment; it's one that we should all be proud of. I would ask all members of the House to join me in not only welcoming Mr. O'Dea, but in thanking him and congratulating him for his wonderful work as well.

C. Clark: We are joined in the gallery today by two friends of mine. One is Joe Payne, who's a local Victoria political activist; the other is a young woman named Ann Marie Aase, who is a great friend and supporter of mine from Port Moody. I hope the House will make them both welcome.

G. Hogg: We are joined in the gallery today by four members of the B.C. and Yukon Provincial Council of the Catholic Women's League of Canada. They are here meeting with the opposition and the government, and presenting their issues. They are Jackie Leonarduzzi, Margaret Beardon, Jean Falck and Pat Battensby. Would the House please make them welcome.

Introduction of Bills


Hon. H. Lali presented a message from His Honour the Lieutenant-Governor: a bill intituled Motor Carrier Amendment Act, 2000.

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

Motion approved.

Hon. H. Lali: I am pleased to introduce the Motor Carrier Amendment Act, 2000. Bill 13 consists of nine sections. Of those sections, seven amend the Motor Carrier Act. The other two sections are transitional provisions that do not amend any statute.

This bill contains amendments to the Motor Carrier Act that seek to address issues arising from the Stan Lanyon report called "A Study of the Taxi Industry in British Columbia." The amendments are requested to remove the motor carrier licensing exemption for taxis and limousines operating strictly within the boundaries of one municipality, establish a new reconsideration process that modifies the structure of the Motor Carrier Commission, implement several administrative streamlining measures and also provide enabling authority to the commission to establish mandatory provincial or regional taxi associations at some time in the future. Further consultation with industry will be undertaken before any associations are established.

I will provide more information on these amendments during second reading of the bill. 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 13 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


G. Campbell: Hon. Speaker, in 1994 the cabinet was told by Treasury Board that there was an urgent need to replace the B.C. Ferry fleet. The current Minister of Finance and the

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minister responsible for B.C. Ferries sat on Treasury Board at that time. Now they say they were wrong in 1994. There is no need; there is no urgency.

Today, after a billion-dollar spending spree, we're told: "There's lots of life left in the boats." My question to the minister responsible for B.C. Ferries is: can she tell us why she told us one thing in 1994 and the opposite today?


Hon. J. MacPhail: Hon. Speaker, in 1994 the corporation of the day presented what are the standards of industry in terms of the life of the particular vessels being used by the B.C. Ferry Corp. Most of the vessels were put into service in the early sixties, and the industry standard of the day was that those particular vessels would have a life span of 35 to 40 years. In fact, those accepted standards were applied basically throughout the world.

In 1999, when there was a new CEO in place, the CEO decided to conduct their own survey of the usefulness left in the vessels -- what it would mean if we invested in refurbishment and extra maintenance, etc. -- and came to the conclusion that with increased maintenance and refurbishment and supplementing the fleet with a few smaller vessels, there's a better investment in that direction.

The Speaker: The Leader of the Official Opposition with a supplemental question.

G. Campbell: So let me get it straight. The NDP has built up a billion dollars of additional debt for the Ferry Corporation, and service is getting worse. Lineups are growing each and every day, and now this minister is asking us to take the word of the same Treasury Board that we should be investing 400 million additional dollars in the Ferry Corporation.

My question to the minister is simply this: why should any taxpayer have any confidence in this minister or this government getting us out of the mess that this minister and this government created in the first place?

Hon. J. MacPhail: Well, hon. Speaker, it is a bit irresponsible of the opposition to stand up and say that there's been a billion dollars of waste. It is fair comment for the opposition to support the auditor general's report on fast ferries; that's true. However, over the course of the last decade the corporation has done several things. They've built the Spirit-class ferries; they've upgraded and maintained new facilities; they've added terminals. I think Duke Point, etc., has been added in that time. There has also been an increased maintenance program that is part of the investment in the fleet. That's what's been going on.

In addition to the maintenance of the fleet, which now is paying off, we have also put the Ferry Corporation, for the very first time -- whether it be the previous Social Credit government or the W.A.C. Bennett government that brought in the Ferry Corporation in the first place. . . . For the very first time, it has its dedicated revenue source. Yes, it's true; this government did decide to absorb the $1 billion of debt now, which has been invested in the corporation, so that the B.C. Ferry Corporation can operate on a sound financial footing.

The Speaker: The Leader of the Official Opposition with a further supplemental.

G. Campbell: Hon. Speaker, the mismanagement of the Ferry Corporation by this minister and this government has become legendary in this province. This government has taken B.C. Ferries from $60 million to over a billion dollars in debt. If the minister spent one moment asking the customers of B.C. Ferries how they were doing, the customers would tell you that those dollars were misspent, were badly allocated.

There are over a hundred questions on the order paper about how on earth this minister, this Treasury Board and this government got us to the state that we are in with B.C. Ferries. There is no one in the province of British Columbia that will trust this minister or this government to get us out of this mess without an open public inquiry into their mismanagement of the ferries. Why doesn't the minister call for that inquiry and answer those questions, so we can start building a foundation of confidence in B.C. Ferries for people in coastal communities in British Columbia?

Hon. J. MacPhail: Hon. Speaker, we have already done all of the investigation into what needs to be done with the capital plan. The Leader of the Opposition is bankrupt of ideas in terms of the future of the Ferry Corporation; this side of the House is not.


We have done our investigation into the capital plan. There has been an inquiry done into the fast ferries. There has been public consultation on what constitutes better ferry service. That is ongoing; we meet with communities regularly. We meet with the tourism association, we meet with the municipal councils, and we meet with the passengers and the customers that use the ferry service regularly.

We are making the changes that are demanded by the ferry-dependent communities. We're making the changes that are demanded by the customers as well. We're doing it through broad public consultation. We're getting on with changing the B.C. Ferry Corporation to make sure that it works. We don't need to have a public inquiry like the official opposition always turns to for everything.


M. de Jong: Well, while we're looking at the government's track record, why don't we take a trip out to the track? I've got a question for the minister responsible for horse racing. Will she confirm that the NDP-created association running Hastings Park racecourse, chaired by its own NDP appointee, is essentially bankrupt and is in default on its scheduled payments and that the largest creditor is this government?

Hon. J. MacPhail: The horse-racing industry is in trouble in this province. Yes, that's absolutely true. We're working with both the standardbred industry and the thoroughbred industry to restore what was once a very thriving industry in this province. Seven thousand jobs are supported by the horse-racing industry. In the early 1990s the industry itself -- a coalition of participants of the industry, the owners, the trainers, the drivers -- came to the government and said that Hastings Park was not working under its current circumstances.

Yes, we did create a non-profit society, the Pacific Racing Association. In order to make the transition from the private sector to this non-profit society, the provincial government did

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loan the Pacific Racing Association a substantial amount of money. And yes, the Pacific Racing Association is having trouble making its payments on that loan. The member is absolutely correct. That's not a secret. What we're doing, though, is not going to let the industry go into ruin. We're working with the horse-racing industry, both the standardbred and the thoroughbred, to make it viable and to make it a thriving part of the agricultural sector.

The Speaker: The member for Matsqui has a supplemental question.

M. de Jong: Based on its performance, if this government were a horse, I'd put it out of its misery, and that's what British Columbians are going to do.

In 1992, Hastings Park was running. It was running effectively, and it was making a profit. And guess what. It was paying taxes. Now it's on the verge of bankruptcy. The prospects of the NDP's little association paying back any of those loans is remote, to say the least. How much are taxpayers on the hook in this latest experiment for the loans that the NDP made to the sport of kings?

Hon. J. MacPhail: The Pacific Racing Association is made up of representatives from the horse-racing industry. For that member to stand up and somehow suggest that the industry is out of control or facing a bleak future because of government action is simply wrong. We're working with the horse-racing industry to make the industry better.

The Pacific Racing Association owes about $5 million. Let me tell you what the Ontario government did in order to support the horse-racing industry. It's a solution, frankly, that this government has not embraced. The Ontario government was confronted with the same issues by the horse-racing industry. That industry said: "We need slots at our racetrack. We need VLTs and slots at our racetrack." That has assisted the industry in growth there. We have chosen not to impose that on the municipalities that have racetracks. What would their solution be? Would they embrace the Ontario solution? I'd like to hear.



L. Stephens: The Campbell Valley Women's Centre in Langley provides intensive addiction treatment for high-risk teenage women, but the centre faces closure at the end of June because the Ministry for Children and Families has withdrawn its funding. The ministry has decided to move to the new therapeutic foster care homes model, but those beds won't be available until October at the earliest. Will the minister tell us what treatment services young women in life-threatening situations can expect while they wait for a treatment bed?

Hon. G. Mann Brewin: I appreciate the question from the hon. member. The member knows, and the association knew, that there would be a finite time to their contract, and the contract has been offered and will be filled by another organization in another community. In the meantime, it's my understanding that services will be provided for these young women.

The Speaker: The member for Langley with a supplemental question.

L. Stephens: Moving from a residential treatment program like Campbell Valley to the therapeutic foster home model is more expensive, and it provides less service. In fact, the ministry's documents confirm that the seven foster care beds in Surrey that the minister is talking about are going to cost $275 a day, and the 13 beds at Campbell Valley cost $225 a day. Can the minister tell us how she can justify spending more money for fewer services on an unproven model of care?

Hon. G. Mann Brewin: I'd be happy to offer the member a detailed briefing on the details of the work that we're doing and where we're proposing to go.


G. Farrell-Collins: Yesterday it was revealed that B.C. Hydro and, through B.C. Hydro, the ratepayers of British Columbia were going to be forking over almost a quarter of a million dollars for legal fees in John Sheehan's wrongful dismissal suit. That has now proceeded; the court case is over. Will the Premier disclose to us today what the legal costs were for B.C. Hydro in fighting this suit?

Hon. D. Miller: Subject to an absolute verification, they were in the range, I think, of about $375,000.


P. Nettleton: The people of Prince George are paying the price for this government's squandering of half a billion dollars on fast ferries. Just last week the Northern Interior health board said that Prince George is short 25 specialists, ten family doctors and 75 nurses. Will the Health minister admit that his government has failed the people of Prince George by diverting much-needed money from health care into boondoggles like fast ferries?

Hon. M. Farnworth: The Ministry of Health will admit that we are working with the community of Prince George to address the issues around attracting and maintaining physicians in the community of Prince George. That's why we have concluded an agreement with rural doctors in northern British Columbia, northern areas of the province, and that is going to be ratified. It has to be done by the doctors and then by cabinet. Part of that strategy is to look at ways of retaining and ensuring that physicians want to go to communities such as Prince George, which is an important regional centre.

Second, one of the key areas that we need to move on in health care is addressing the issue around physicians in British Columbia -- not just here in British Columbia but across the country. The issues facing rural British Columbia and northern British Columbia are the same as every other province is facing. That is why it is important that we get Ottawa to the table in terms of looking at how we fund health care in this country -- to restore the partnership around health care in this country and to address issues through national strategies that can involve training of physicians who specialize in northern

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and rural health care issues. We need a short-term plan, which we're working on, and, more importantly, a long-term plan to ensure sustainable solutions.


The Speaker: The bell ends question period.

Tabling Documents

Hon. G. Bowbrick: I have the honour today to present the annual reports of the Information, Science and Technology Agency for the years ending 1998 and 1999.

Hon. P. Ramsey: I have several reports to present. First, I am presenting the reports of the business done in pursuance of the Pension (Teachers) Act and of the Pension (Municipal) Act for the fiscal year ended December 31, 1998. I also have the honour to present the public accounts for the fiscal year ended March 31, 1999.

Mr. Speaker, I would request leave of the House to move a motion without notice.

Leave granted.

Motion without Notice


Hon. P. Ramsey: I move that the public accounts for the fiscal year ended March 31, 1999, be referred to the Select Standing Committee on Public Accounts.

Motion approved.

Orders of the Day

Hon. D. Lovick: I call Committee of Supply in Committee A. For the information of members, we will continue our debate of the estimates of the Ministry of Municipal Affairs. In this House I call Bill 8, Miscellaneous Statutes Amendment Act, 2000.


The House in committee on Bill 8; T. Stevenson in the chair.

Sections 22 to 27 inclusive approved.

On section 28.

G. Plant: The amendment before us is to the Islands Trust Act. It adds a paragraph which is a reference to first nations into what is section 9 of the Islands Trust Act. The explanatory note says that the amendment is intended to authorize the trust committee to enter into agreements with first nations respecting the coordination of activities in a trust area for the purpose of the objects of the trust.


When I look at section 9 of the Islands Trust Act, that is the subject matter of section 9. It's called "Coordination agreements with other government bodies." It says that for the purpose of carrying out the object of the trust, the trust council may enter into agreements with, among others, the government of B.C., the government of Canada, municipalities, regional districts, school boards and so on. So I gather that the thrust of this is to add first nations to the list of bodies with whom a trust committee would have the ability to enter into a coordinating agreement.

My question around this provision relates to the interrelationship between trust councils or trust committees on the one hand and municipal governments on the other hand. As I understand it, at least now on Bowen Island there is. . . . I'm not sure if "overlap" is the right word, but Bowen Island is subject to the Islands Trust and is now also a municipal government. More of these may come in time. I think that Saltspring Island may be moving down this path; I'm not sure how far along they are.

The concern in relation to this amendment, which comes out of the municipality community, is whether the amendment will give the Islands Trust council and committees the power to enter into agreements with first nations that might end up imposing burdens on municipal governments that they won't have any input into. Perhaps the minister can offer some comfort on that front.

Hon. A. Petter: I'll try to provide the member with some comfort in regard to the concern he raises. As I understand it, these coordination agreements are largely process agreements that take place. Right now they allow for various parties to arrange their affairs in a way that allows for greater coordination and cooperation. And all this does -- it doesn't change the character of those agreements in any way, shape or form -- is that it allows the trust council, in respect of those agreements, to include first nations within the ambit of parties with whom they can reach such agreement. The member has already enumerated the other parties with whom they can make such agreements.

It doesn't change or displace the balance that exists right now between municipal governments and the Islands Trust. It simply allows one more party to be brought into the coordination agreement structure that currently exists.

G. Plant: And which would happen without leading to a situation where a municipal government found itself facing obligations arising out of these agreements in a circumstance where they've had no input into the agreement itself.

Hon. A. Petter: As I understand these agreements and am advised by staff, the only way in which an obligation could be imposed on a municipality under these agreements is if the municipality were a party to the agreement, voluntarily. Otherwise, the agreement will be between the trust council and whomever, in which case the obligations would be amongst those who were parties to the agreement. They would deal largely with questions of process and information-sharing.

G. Plant: Perhaps as a final question, then. . . . I understand what the minister means when he says that we're talking about process agreements. Could he give an illustration of the kinds of subjects that would be covered in such agreements?

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Hon. A. Petter: Yeah, I can give a few illustrations. They might involve things like working together on the identification of areas that the parties to the agreement believe require some environmental protection, or discussing land use issues or dealing with information-sharing or mapping concerns -- where the parties to the agreement agree that a greater level of cooperation, information-sharing or cooperative work on the objective would produce a beneficial result. Clearly such agreements can't impose obligations on parties who are not parties to those agreements.


G. Plant: This will, I think, be the last question. There has been some public discussion, if not controversy, around logging in the Gulf Islands in circumstances where first nations reserves are the subject matter of the logging. Some Indian bands, I think, have proposed logging in areas where others have expressed some concern about environmental and other interests. Is the amendment here intended to create a context within which the Islands Trust could approach first nations to construct relationships that might hopefully ameliorate these kinds of difficulties?

Hon. A. Petter: If the member is offering an illustration of what these agreements can do, then I would say absolutely. That's exactly what they are designed to do. The inclusion of first nations here is to facilitate that kind of cooperation and discussion taking place.

Sections 28 to 31 inclusive approved.

On section 32.

G. Plant: I want to spend a moment or two on section 32. Really, the points I am going to make -- the questions -- also relate to section 33. There may be one or two other members of the opposition who want to participate in the debate.

I'm wondering if we could begin by just getting the government to explain what it is that it seeks to achieve by this change to the Motor Vehicle Act.

Hon. A. Petter: I apologize, but we were just getting staff organized here.

If the member's concern is around the general purpose being sought by section 32, it is to provide clarification and resolve some concerns that have been raised about the enforceability of the section of the act to which it refers. This ensures that it's clear that if a blood alcohol reading is taken with respect to alcohol that was present in the person's body at the time they were driving the car, what is relevant is whether that reading -- within that three-hour time period -- exceeded the allowable limit. That removes the ambiguity about making inferences and going back about what it might have been the moment the person had left the bar, or whatever it may have been. It's to clarify that there's a three-hour window with respect to which the reading applies.

G. Plant: I think the context may be relevant. In section 32, I think, we're talking about the administrative driving prohibition, which is a process by which a driver can have their licence suspended for up to 90 days following roadside checks and all that other good stuff. I'm told by the members of the legal professional that I've talked to about this amendment that it's intended to eliminate something called the last-drink defence. I'm told it works like this: when a person is stopped by the side of the road, the breathalyser test is often not administered until up to an hour later. The test may indicate a blood alcohol content above .08. However, the person argues that he had his last drink shortly before being stopped.


It takes 20 to 30 minutes for the alcohol to transfer from the person's stomach to his bloodstream, I'm told. Therefore the person argues that at the time he was actually stopped, which was an hour before the test may have been administered, the last drink had not yet entered his bloodstream, and therefore, he was below .08. At least by way of moving the discussion along, could the minister indicate whether that explanation accords with his understanding of the context for the proposed amendment here?

Hon. A. Petter: Yes, I think that that explanation does, and that this would, as the member indicates, remove that defence. It is a fairly technical defence: that the amount of alcohol at the precise time was such -- because it had not been fully absorbed into the bloodstream -- that it might have produced a reading that was somewhat less than actually occurred when the reading was administered. This would remove that defence and the procedural difficulties around that issue.

G. Plant: Well, we start from the same point. Now, I guess, we get to the problem. In a way, while we might look at the so-called last-drink defence as one of those sort of unpleasant technicalities, many of which seem to pervade the law relating to impaired driving, there is also present in this law and in the case law around it a pretty admirable strain of judicial endeavour in terms of protecting the basic civil rights of citizens.

When we bring that approach to these amendments, I have some concerns, because when someone argues the last-drink defence and they succeed, they are in effect able to demonstrate that at the time they had the care and control of the automobile, they did not in fact have a blood alcohol reading of over .08, and therefore they were not operating the motor vehicle while they were impaired. We might complain about the way in which people get to make that argument, but of course its legitimacy -- that is, whether or not the contention is true -- is a matter to be determined on a case-by-case basis in trial courts.

If the contention succeeds, however, then we have a person accused of an offence -- or the person in this case subject to a notice of prohibition -- who, at the time that they were stopped, had the care and control of a motor vehicle in circumstances where they were not impaired. This amendment seems to give the government way too much latitude in terms of saying: "Well, it's no longer a question of whether you were driving while impaired; it's really as simple a question as whether or not you were impaired at any time within three hours after having care and control of a vehicle."

I guess it's possible that the minister's construction of the section is different from mine. As a starting point, I'll give him the opportunity to defend the language of his proposed amendment.

Hon. A. Petter: I think the way to approach it is this way. First of all, this is an administrative provision dealing with a

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licence suspension provision. The principle that I think the member is raising is: have we defined this in a way such that the people understand ahead of time, in an appropriate way, what their responsibilities are, and are we then fairly assessing upon them the consequences for not living up to those responsibilities?

If in fact it were defined ahead of time that the responsibility is to remain below .08 at any time within the three hours following drinking or at the time that your car was stopped, then it would be unfair to come back to the person later and say: "However, we are now going to visit consequences on you even though you might have, at the time we stopped you, been below that level." But of course what this section does is change, substantively, the expectation in a way that I think is altogether reasonable and responsible. It says to individuals in this province that in order to retain your licence -- in order to not be subject to suspension -- your responsibility is not to be below .08 at any time or fortuitously at the time that you were stopped, but to make sure that the level of alcohol in your system is such that it will not exceed .08 at any time within that three-hour period.


Provided that people understand that ahead of time and provided they understand that they have to guard against that consequence, there is no unfairness here whatsoever. The substantive rule, if we pass this section -- as I hope we do -- will be well understood. People who are in bars will understand that their obligations are to not run the risk of ingesting alcohol to a point that could raise a level of .08 within that three-hour time frame. By doing so, we will serve the public good, because we will eliminate this propensity to try to take one for the road in the hopes that you can rush home before the alcohol has been digested to the point that in fact it exceeds the limit. That is a race not only against one's self; that's a race against all the people on the road, because if you don't make it and if you are intoxicated, the consequences, of course, could be devastating.

So I do have a different view of this from the member. I think we're changing, ahead of time, the public expectation. Everyone will be aware. It's not a matter of changing the rules after the fact; it's a matter of defining the rules before the fact that all citizens will now be aware of and will have to live by.

G. Plant: But the basic principle behind all this -- the place we started from as a society when we started worrying about this -- is that you shouldn't drive while you're impaired. This changes that basic principle. This creates a different expectation, as I understand it, and my understanding is not. . . . I mean, I'm not the only one who reads it this way.

Essentially, if you blow over .08 at any time within three hours after you've been in a car, then you're going to pay a price. That's not only a substantive change in expectation; I think it's a substantial departure from good public policy. The minister talks about putting an end to a defence. The one thing I can say -- and surely he'll remember this from law school too. . . . The one thing that I know for a certainty is that whenever you put to death one technical defence in the law of impaired driving, you create two more. It is just human nature in this area. We are not going to be able to prevent that from happening, so the question I think we have to ask is: are we making good public policy?

I think there is a serious problem in making public policy which says that the rule now is that the state can take your driver's licence away from you for 90 days in any circumstance where, having been in care and control of a vehicle, within three hours thereafter you're found to be over .08 -- whether or not you were intoxicated at the time you had care and control of the vehicle.

Hon. A. Petter: Well, I think the member's points would be better taken -- they're great points; don't get me wrong -- if in fact there were a clear defining line between what is intoxication and what isn't. In fact, there's a gradation of impairment that takes place the moment one ingests alcohol and that alcohol comes into one's system.

Let me give the member some statistical correlation. If one has .02 percent alcohol, statistics suggest that the risk of an accident rises by 20 percent from the baseline of no alcohol. If one's level goes up to .04, it's up to 40 percent; .06, up 60 percent. Then the correlation in fact gets steeper: at .08 there is a 90 percent higher risk of incurring an accident.

So this isn't a case where suddenly you hit .08 and suddenly it becomes a higher risk. There's a gradation here. Some jurisdictions, of course, have defined impairment in different places along that gradation. For the purposes of a suspension, the question is: is it good public policy to allow people who blow over .08 within three hours -- and clearly have consumed a level of alcohol that would, at that point, put them at a 90 percent higher risk -- to escape liability on the hypothetical, with the burden falling on others to show that they in fact were not below that level at some point when they were driving or when they were stopped?

The argument here is: no, it is not good public policy to provide that defence, because in fact there is a steepening of risk with every drink that's consumed. It's better to come up with a standard that can be certain and administered without opening up all sorts of opportunities for escape holes and legal arguments when that isn't necessary. So in this case, defining it as a .08 standard within that three-hour window, knowing that there will be a higher risk and a level of intoxication that will increase the risk -- even if it so happens that they were at .06 or .07 the moment they left the bar or the moment they stopped taking their last drink -- is, it strikes me, good public policy, not bad public policy.


D. Symons: I'd like to describe a situation for the minister and just ask for his comments regarding it. This was passed on to me by somebody in the Automobile Association. The situation could be that somebody's had a bad day at the office, or let's say a bad day at the Legislature. They get home after that bad day and they take a stiff drink. Half an hour later they start to hear this wild party going on next door. People are having a barbeque out in the back yard, and he isn't in the mood for that. This bugs him some more and he takes another drink. The party gets really wild, so he goes across there and starts arguing with the guy who's having the party, gets into an altercation, and the fellow phones the police. The police come and they say: "We just saw him drive home an hour ago; he's obviously plastered."

What's to stop this three-hour one from going into that situation, where they take an alcohol reading two hours after the event, but actually the police didn't see him drive the car; these people assumed he did. What sort of situation would he be in, in that case?

Hon. A. Petter: Well, that's a very interesting story. I know that misapprehension was created as a result of press

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reports and the like that came out shortly after this miscellaneous bill was tabled. But in fact, if you go back to the provision that it's amending, you'll find that the operating words are "having consumed alcohol in such a quantity". Therefore this standard is clearly applied only with respect to that alcohol that can be demonstrated to have been in the person's system at the time that the person was driving. And if there was a suggestion that alcohol was consumed subsequently and that is what resulted in the higher reading, then that would be a defence, as it has been previously and as it would be under this amendment.

K. Krueger: Just to press that point a little further, because that is the concern. This whole matter of administrative driving prohibition has added a whole new area of response to an issue that we over here, and certainly all of society in British Columbia, are concerned about. But you don't have to go and get convicted of blowing over .08. You don't have to be convicted of any Criminal Code offence. You can just lose your licence for 90 days, and that's a pretty big deal to a lot of drivers in British Columbia.

In spite of the minister's assurance a moment ago to my colleague for Richmond Centre, it seems to me that the wording of these amendments to the existing legislation leaves room for all sorts of errors to occur. For example, if a person goes to a pub or a restaurant for lunch, consumes alcohol with the meal, decides not to drive home but is stopped later as a passenger or visited by police in his workplace or his residence -- because there are allegations that he, apparently, had been out driving while he had been drinking -- I think that this wording captures him.

The minister keeps referring to blowing .08, but that's not what section 94.1(1) says. It says: "If a peace officer has reasonable and probable grounds to believe" -- it doesn't say anything about a breathalyser or blood test being administered -- "that a person operated a motor vehicle or had care or control of a motor vehicle having consumed alcohol in such a quantity" -- and the amendment kicks in after that -- "at any time within 3 hours after operating or having care or control of the motor vehicle. . . . " This whole process can lock in on him. He can lose his licence on the spot, get issued his interim licence, have a 24-hour suspension -- which comes with a permanent record. He can lose his licence for the full 90 days. Under this wording, I think, this could all happen without him actually having driven that vehicle that day while he had been drinking at all.


Hon. A. Petter: I can assure the member -- and more importantly, staff have certainly assured me -- that the kinds of scenarios that he talks about are not ones that are captured by this section. The peace officer has to have reasonable and probable grounds to believe, by reason of an analysis of the breath or blood of a person. . . . So there has to be some basis for that reasonable, probable grounds in an analysis of breath or blood. That is why I refer to the breathalyser example, because that is going to be the more prevalent example: ". . .that a person operated a motor vehicle" -- a passenger is not a person who operates a motor vehicle -- "or had care or control of a motor vehicle." A passenger is not a person who has care or control of a motor vehicle. So the concerns that the member refers to are simply not well-founded, in respect of the language of this section.

And now, having said that, I don't want any member to mistake this section. It was introduced and is being amended as a reflection of a strong public policy of this government and, I think, of British Columbians, to send a strong message that impaired driving is a serious matter, that we expect citizens to take precautions to guard against that, and that if they fail to do so, there'll be consequences -- and serious consequences. And what we're saying here is that those precautions have to be ones that guard against the possibility of blowing a particular reading within a three-hour period. And to that extent, it is changing -- the expectation we're placing on citizens. I freely admit that as well. And that too is a reflection of the fact that we are serious, and we expect that citizens who have the privilege to drive carry with that privilege an understanding that that privilege also carries with it responsibilities.

We're defining those responsibilities better here, I think, and asking citizens to abide by those responsibilities, or serious consequences will flow to them. If they don't live up to those responsibilities, serious consequences will also flow -- and not just to them, but to them and to others -- in terms of the accidents that result and the devastating consequences of drinking and driving.

K. Krueger: What about the scenario where the police visit the person in his home that they think was driving a vehicle while he had been consuming alcohol? He says: "I didn't do it. Any drinking I've done is since I've finished driving." But they do go ahead and give him a breathalyser; he agrees to it. Or he refuses and gets into that whole route. Or they give him a blood test. They've done the analysis. The argument is that he drank after he drove the vehicle. He has still certainly consumed alcohol within three hours after having driven a vehicle. How is he not captured by what this legislation sets out to do?

Hon. A. Petter: Nothing changes in respect of the example the member gives under this legislation. The breathalyser would have to be sought pursuant to the Criminal Code and the protections and provisions of the Criminal Code. The ability to then visit a suspension upon that individual would depend upon reasonable and probable grounds.

This legislation -- this amendment -- changes the test to some extent, making it clear that the test is a reading at any time in that three-hour period when the breathalyser is administered. The protections and civil liberties of individuals are not altered, except insofar as the test has been altered and citizens are now aware that there is that difference in the test. The hypotheticals the member raises are not affected, in my understanding, by these changes -- unless I misunderstand his point.

K. Krueger: I think they are. The whole response of administrative driving prohibition is a fairly recent development in our law, and now we're widening the net. If a police officer has reasonable and probable grounds to believe that person had care, custody and control of the vehicle or was driving and he finds him to have a significant level of alcohol consumption within three hours after, then the peace officer must, according to section 94.1(1)(b) of the Motor Vehicle Act. . . . It doesn't really give him latitude. He must launch this administrative driving prohibition process. If the person did actually consume the alcohol after he got home or subsequent to driving the vehicle, it seems to me the police officer nevertheless, because he finds him having consumed alcohol within three hours afterwards, is obliged to launch this whole process, which really impacts on a person's life.

[ Page 15440 ]

I accept that the minister doesn't intend that. That's clear from his previous answers. But I think that that could happen. There are cases of police officers operating on testosterone or whatever who tend to push the law further than legislators intend. It seems to me that we really are kicking open people's doors and widening the powers of the state to deal with people in ways that I don't know if the minister really intended.


Hon. A. Petter: Nothing changes. The peace officer now, before the amendment, must. . . . Reasonable and probable grounds are the basis now. The analysis of breath and blood is obtainable now. All this does is say that the test is one that pertains in that three-hour window. The public policy for that is: do we really want to encourage people, before they leave the neighbourhood bar, to take a few shooters for the road in the hopes that the alcohol will not be absorbed in their blood quickly enough to produce an .08 reading before they get home? Do we really want people to gamble with their lives and ours by incurring that social behaviour?

What this legislation is saying is no, we don't want them to gamble with our lives and theirs, incurring that kind of social behaviour. We don't want to create a whole system in which those kinds of arguments can be raised subsequently, when they're arguments that are frankly based in bad public policy as well as arguments that impede the ability for us to keep our roads safe and ensure that these kinds of very tough measures, tough suspensions -- no apology from this side of the House about that -- are visited upon those who drink and drive.

R. Coleman: I have a number of concerns about this section as well. I will tell the minister that I conducted well over a thousand breathalyser tests and was recognized as an expert witness on breathalyser and impaired driving in some of the courts in this country.

My concern is this. The case law that I dealt with back then -- and I don't think it has changed; if anything it's gotten worse, not better -- was that anything that's taken outside of a two-hour period as far as a breath sample was concerned had to be extrapolated backward by an expert relative to the exact time that somebody would be driving an automobile. I'm wondering how the minister addresses that issue relative to. . . . If somebody is picked up at three hours, gives a positive sample in excess -- in this case an actual fact, because the 20 milligram percent allowance within what we've found in our court system -- of 100-plus of a sample, how are you going to extrapolate that back? Where are you going to find the experts to do the extrapolation within your system to deal fairly with the client who you are saying was impaired at the time of operating the motor vehicle?

Because three hours is a minimum of 20 milligrams percent loss of alcohol in the blood on a 150-pound man, the extrapolation has to be calculated on the weight of the individual and the time that they are actually brought to the instrument for the test. Even under the Criminal Code of Canada, I don't believe that you can actually gain a conviction or use outside two hours as bringing a person to the instrument, and you're bringing him within three hours. At three hours, how are you going to decide the extrapolation of the actual blood alcohol at the time of the operation or the care and control of the motor vehicle?

Hon. A. Petter: I appreciate the member's intervention and his expertise in the area. I think his intervention, in fact, points directly to what this section is trying to achieve. First of all, as I understand it, the Criminal Code was changed so that the breathalyser could be administered within three hours. This is bringing that three-hour window into this legislation. It's true, under the Criminal Code, it being a criminal provision, that there is an extrapolation process where the breathalyser is taken. I think beyond two hours, at least, there is a requirement to extrapolate backwards. But in this case, what we're doing is to remove the need for that extrapolation. That is exactly what this does.

It says, "There is no requirement for extrapolation. The individual's responsibility in drinking before driving is to keep the level of alcohol in their system below that which would result in a .08 reading at any time in the three hours afterwards" -- based on the alcohol they've drunk prior to or during driving, not afterwards. So that requirement for extrapolation, that difficult process that the member refers to, is no longer required in this case. It simplifies the process from an administrative point of view. But from a public policy point of view, it takes away this propensity of people to think that they can shoot a few drinks, jump in their car, drive home and somehow avoid responsibility in the hopes that they'd get home before the alcohol is ingested into their system and into their blood at a level that would produce a criminal level of impairment.


We are saying, for the purposes of this administrative provision, that that responsibility should be one that falls upon those people who drink and drive to make sure that their alcohol level stays below .08 at any point in that three-hour window.

G. Plant: I am interrupting my colleague, and we'll let him continue in a minute. I sit here, and the minister continues to give assurances about the language of the thing. I think I've finally seen what it does. The problem right now is that there's this last-drink defence, which is the couple of shots the minister talks about before you get in the car for the quick drive home. This is intended to deal with that. The problem that it creates is that the last shots will actually now happen in the living room once you get home. If you have a shot or two in the bar, drive home and have four or five shots, then you are in big trouble, because someone is going to have this argument about having consumed alcohol in such a quantity.

Well, how much of it was consumed and when? I mean, I don't think the argument is going to go away. I think it is just going to create different kinds of arguments. If I had confidence that the minister's construction of the way this thing would work was correct, I would feel better about this provision. I regret to say I don't have that confidence in the wording that's being used.

Hon. A. Petter: Let me just give the member confidence that nothing has changed in respect of the concern he has. Right now, if someone is observed driving in a way that raises a concern with drinking and driving, goes home and has some further drinks, and the police under the Criminal Code have reason to then visit that person and demand a breathalyser, there is still the problem of distinguishing between the level of alcohol that was consumed prior to arriving home or not and then extrapolating back. All this does is deal with the

[ Page 15441 ]

extrapolating-back part. The distinction made between alcohol consumed previously or subsequently is there now. It can't be eliminated.

Of course, if there is not reasonable and probable grounds for the police officer to believe that the level of impairment was a result of alcohol that had been consumed -- "having consumed" is the wording in the section -- then the licence can't be suspended. So nothing has changed.

R. Coleman: In all due respect to the minister, a tremendous amount has changed. We will find that taking the extrapolation out of the process -- if you're going to follow the rule of what you're going to try and do here -- will lead to what will be termed false arrest. When an individual is read a demand to give a breath sample and is taken before a breathalyser, they are technically under arrest until they deal with that examination and test. That is based on a period of time outside of, with extrapolation, reasonable and probable grounds. You have reasonable and probable grounds to believe somebody is over a certain level of alcohol at the time they are operating or are in care and control of a motor vehicle. You've taken away some of their rights by taking them in a police vehicle to a detachment to do a breathalyser, and you are now taking a sample of their blood or their breath, which, in this case, gives you the blood alcohol content.

My concern is that without the extrapolation, in going outside this period of time, you're saying that the Criminal Code of Canada is good enough for breathalyser convictions, but it's not good enough for suspensions. So we're going to ignore the case law of Canada, ignore the system relative to breathalysers in this country. We're going to allow for another window where now the individual has to prove -- the onus of proof now goes to the individual, as I understand -- and to extrapolate backward that they weren't at that level at the time they operated a motor vehicle.

Maybe the minister can clarify that. But according to what the minister said a minute ago, you say the application is that the extrapolation period is eliminated in the three-hour period now because of the suspension. Are we eliminating this? If we are, are we issuing a demand for people to give a breath sample, which then falls under the Criminal Code when we issue the demand for the sample?


Hon. A. Petter: This section cannot and does not amend the Criminal Code. The circumstances under which breathalysers can be administered under the Criminal Code are not altered by this section. The rules and protections that apply to the administration of breathalysers or blood sample tests do not change. This in no way affects that.

This deals with the consequences of a breath sample legally obtained under the Criminal Code in respect of a suspension. What it says is that if the consequence is that the breath sample or blood sample demonstrates a level of impairment at the time that it's administered -- provided that it's within three hours, based on alcohol that was present in the person's system when they were driving -- then the licence is suspended.

There's no shifting of onus here; there's a changing of test. The person cannot go back and say that they were not. . . . They cannot go back and extrapolate back; there is no extrapolating back. The requirement is that they keep their level of impairment to a point that it does not exceed .08 at any point in the three-hour period following their having consumed the alcohol and having been driving. That does not change.

This section cannot change the Criminal Code. All the Criminal Code protections are still there. It does change the test with respect to the suspension under provincial legislation, flowing from the breathalyser that is administered under the Criminal Code. It does not reverse the onus. It changes the test.

R. Coleman: The minister just said a "legally obtained" breath sample. The only way to obtain a legal breath sample is by issuing a legal demand under sections of the Criminal Code. Now, you've taken an individual to an establishment. They've given you a sample. That legally obtained sample -- outside two hours -- with case law, has to be extrapolated. But under this, it doesn't. So you're taking the sample, which is being taken under reasonable and probable grounds under one code, which is the Criminal Code, and you're allowing for flexibility outside that code to give somebody a suspension. Then you made the further statement that if you're operating a motor vehicle and you've had alcohol, don't go over 80 milligrams percent in a three-hour period after you've driven the vehicle.

After all, we're now going to dictate to you how much alcohol you can consume in your own residence when you get home. You'd better stay under 80 milligrams percent in the three-hour period after you arrive home, because I can now come in and say: "I have reasonable and probable grounds. I'm taking a legal sample." Then you're going to give me a suspension for a period of time relative to that, and it's up to me to prove that I wasn't -- that somebody else is going to extrapolate back and show that it wasn't over 80 milligrams percent.

Maybe I'm hearing this wrong, but that's the interpretation I get when I read the act. Again, it's the interpretation I get out of the minister's comments. I think that if you go outside that two-hour period, you are going down a dangerous road relative to the extrapolation, because everybody knows -- the science tells us -- that different body masses extrapolate differently and that the metabolism works differently.

Hon. A. Petter: I think I can do this but one more time, hon. Chair.

The ability to administer a breath sample in the Criminal Code was extended to a three-hour window from a two-hour window; that's already there. The province has, within its authority, constitutional authority with respect to matters that relate to drinking and driving -- with respect to public safety and driving, for example. The federal government clearly has authority with respect to its authority for the criminal law.

There are two aspects to this matter: one provincial, one federal. Case law clearly establishes that the province can establish its own standards. Indeed, it's quite appropriate that a standard that leads to certain criminal consequences may be a higher standard than one that leads to certain administrative consequences.

What's happening in this case is that the province is saying, as a matter of public policy through this change, we

[ Page 15442 ]

believe that for the purpose of a licence suspension, the test should be based upon whether there was a reading in excess of .08 within that three-hour window, without extrapolation back. That's completely within the province's constitutional ambit of responsibility, and it's being pursued for an excellent public policy reason. It doesn't alter the Criminal Code, and it doesn't in any way undermine the Criminal Code.

Furthermore, it only applies to alcohol that was in the system when the person was driving -- alcohol that was consumed prior to when the person was driving, not alcohol that would have been consumed subsequently. To the extent that alcohol is consumed subsequently, that's a problem now; it's a problem here. The police have to resolve that they have reasonable, probable grounds to believe that the impairment and the level of intoxication reach the unacceptable level, based only on that alcohol that was consumed prior to the person leaving their car and getting home.


R. Coleman: I think what we're going to do here is agree to disagree, because I think that you're going down an extremely dangerous road. The people you're putting at risk as far as making these decisions are the law enforcement officers of the province, who are now going to be asked to step outside the box a bit more, relative to the extrapolation of that three hours, and make decisions.

I do know that even if the sample is allowed to be obtained in a three-hour period, the difficulty with extrapolation back to the time of the actual operation of a motor vehicle. . . . This isn't a case of whether somebody supports or doesn't support impaired driving. Frankly, after seeing the carnage of what alcohol and impaired driving can do on our highways, I think it's something that has to be dealt with in a stringent manner.

But at the same time, I really see us coming up with a vehicle. . . . I believe that in a year we'll be standing here and amending this, because I think we're going to find abuses in the impossible application of this type of three-hour limit outside, without extrapolation, and in application relative to these suspensions. That's what worries me more than anything, because I think it's badly crafted as far as its application for the law enforcement officer in the field.

G. Plant: I want to make one other point; it has a number of parts to it. I have another concern about this provision. It's less to do with the detail than with what the public might take from it. We were here in this chamber in 1997, and I recall the minister then introducing Bill 41, the Traffic Safety Statutes Amendment Act. There was lots of high-sounding language, probably on both sides of the House, on how we could deal with the problem of impaired driving in British Columbia.

One of the things that Bill 41 contained -- section 5 -- was a provision that dealt with remedial driver training as a condition of licence. It actually gave the superintendent of motor vehicles the power, in effect, to withhold a licence in circumstances where the superintendent was of the view that somebody needed some form of counselling or therapy for a substance abuse problem. I recall that the government incorporated this as a part of its much-ballyhooed traffic safety initiative in 1997. For a while I was kind of persuaded that maybe the government actually meant something about this initiative.

But it's not 1997 anymore; it's now the year 2000. Section 5 of Bill 41 of 1997, which was to become section 25.1 of the Motor Vehicle Act, hasn't been proclaimed yet. It's still not in force. The government doesn't have any problem coming in here and ratcheting up the rules around administrative driving prohibitions, giving itself a nice big club to hit people on the head with.

But the real societal problem is that there are people out there who shouldn't be behind the wheel of a car, because they have a problem with abusing substances and driving vehicles. There are tools available out there in society to deal with that problem. There's therapy; there's counselling. There's a course in Nanaimo that costs $6,000; apparently it has enormous success. I'm told that $6,000 is the going rate for defending an impaired driving charge. Instead of focusing and developing the tools to take us down that course of public policy, the government seems to think that the way to deal with impaired driving is just simply to rely on the penal provisions of the law.

It doesn't stop here. I discovered a few days ago that the Criminal Code of Canada has provisions. Section 255 of the Criminal Code of Canada says that instead of convicting a person of certain kinds of impaired driving offences, a court may in fact. . . . If the court is of the view that curative treatment in relation to the consumption of alcohol or drugs would be the right thing to do, the court can discharge the person and direct that the person go to treatment -- which seems to me to be exactly the right thing to do, particularly for repeat impaired-driving offenders.

Then what do I find? I find that the only way that subsection of the Criminal Code works is if it's brought into force in a particular province. Notwithstanding all the high-and-mighty language from the government in 1997 about its commitment to this issue, British Columbia is a province -- it may be actually one of only three or four provinces in all of Canada -- that has not proclaimed this provision of the Criminal Code in force.


Again, it's easy to come along, ratchet the consequences up and give government a bigger stick to hit people over the head with. But when it comes to the hard work of actually doing the kinds of things, providing the programs that need to be provided and giving administrative officials the curative and remedial tools they need to have to actually deal with the problem of impaired driving, that appears to be way too hard for this government. That appears to be way too much like hard work for this government. It's much easier to just come in and make the penal law a whole lot more difficult.

I want a good explanation from the minister, who stood up in this House three years ago -- four sessions ago -- and introduced these changes in the Motor Vehicle Act to allow remedial driver training as a condition of a licence. Why hasn't he done this? Why doesn't his government proclaim the provisions of the Criminal Code? Why doesn't his government implement the Substance Abuser Rehabilitation Act that I introduced as a private member's bill in 1997? Why does the government think that the only response to impaired driving is to give the police officers an even bigger club, when it seems to me that it isn't going to solve the problem?

Hon. A. Petter: That was passionate but not entirely accurate. Speaking personally for a second, I appreciate the member's reference to the legislative changes that were made. I haven't been minister responsible for this particular area for

[ Page 15443 ]

some time. I will answer in the context of this particular section and try to relate it back. Otherwise, I run the risk of straying outside my area, and I'm here to answer on the section.

The fact of the matter is that this is not something that can be addressed through a single strategy. It requires us to use all the tools that are at our disposal in order to deal with unsafe driving. Huge strides were made in the legislative amendments the member refers to, which have produced very positive effects in terms of encouraging safe driving. In respect of drinking and driving, of course, huge efforts have been made by government in respect of CounterAttack programs, etc. We also, though, should not ignore opportunities to change societal attitudes through the use of penal provisions and remedial provisions.

On the remedial side, I agree with the member that we have to move towards more remedial programs, and I know that work is underway. In fact, last October, as I understand it, an interim program dealing with the worst 600 drinking drivers in the province was implemented. These drivers must now pass a two-hour assessment with a specialized addiction counsellor in order to gain their license back. So, in fact, steps have been taken in the direction the member's talking about. Can more be done? Certainly. I'm sure that the minister responsible is working on that.

In reference to the Criminal Code provision that the member references, I understand that there have in fact been concerns expressed about the use of that particular provision to provide remedial programming, because of consequences that weren't intended. I don't know the detail, but I would be happy to look into it with the member and find out. That doesn't detract from the point that remedial responses are necessary and, as I've indicated, are being pursued -- in fact have been pursued with a new program as recently as last October.

But let's not make this a case of the best being the enemy of the good. We should be doing everything. Unfortunately, there is still a culture out there amongst people that it's okay to have one for the road when you're getting up to leave your bar -- the one-for-the-road culture. What this amendment says is that if you're going to have one for the road, make sure that that one doesn't place you in a position where you're going to be in excess of .08 at any time in the three hours following driving. That seems to me a reasonable expectation. If it can help to counter irresponsible one-for-the-road behaviour, then I think that's a good result.

The member who spoke previously, the member for Fort Langley-Aldergrove, said the government was going down a dangerous road. Well, what we're trying to do here, and I think successfully, is to prevent citizens from going down dangerous roads -- roads that will become dangerous for others, those who become the victims of accidents where people who are intoxicated are driving.

I appreciate the member's concern. If the member's saying there are other areas that we should attend to -- absolutely. But let's not use that challenge that we have in other areas and the work that remains to be done there as a excuse to not do the right thing here.


Section 32 approved on division.

Sections 33 to 44 approved.

On section 45.

R. Neufeld: I'm a bit confused by it when I go to the statute. Section 45 almost looks as though it should not just be a section added, but that section 63 should be changed in the present statutes. I want to go over that a little bit with the minister, because what it says presently is:

"Despite sections 58, 61 and 62, if a lessee fails to pay the rental or do work required under section 56, the lease expires 60 days after the date the rental was payable unless on or before the 60 days have elapsed, the lessee pays (a) the rental and does the work, and (b) in addition, as a penalty for each 30 day period or portion of a period that he or she is in default, a sum equal to 1.5% of the rental and value of the work."

Yet the new section that's added has another penalty to be paid, $500. It also has section 63.1(c) that says, "the lessee pays the rental and does the work. . . " -- which is already in the bill. So I'm not sure if there are some wording errors here, or if some of what's in the bill at the present time should not be removed and this be a totally new addition. Or is it in fact the intent of the government to levy two fines -- 1.5 percent of the rental and the value of the work, plus a fee of $500? To me it doesn't make sense, the way it's listed out at the present time.

Hon. A. Petter: I understand that this $500 fee is an additional fee-for-service for reinstatement and is substantially lower than the comparable fee in Alberta, which I believe is $5,000. It is therefore different than and above and beyond the other fees he refers to.

R. Neufeld: Well, we're not in Alberta; we're in B.C. I want to go back to my initial question; maybe your staff wasn't here. I don't have any problem with section 63 as it is in the act at the present time. I'm sure Mr. German has a copy of it. The date. . . .

In fact it should say, "Despite sections 58, 61 and 62, if a lessee fails to pay the rental or do work required under section 56, the lease expires 60 days after the date the rental was payable" -- period. Then the part "unless on or before the 60 days have elapsed, the lessee pays" should be removed totally to work with what you've got here. All you do is go to (a) and say "the rental and does the work," and you say that under (c) "the lessee pays the rental and does the work." So you say it twice. All I'm trying to do is to put some sense in some of the English in the way it's written, instead of doubling it up.

But I guess my second question has been answered. You are levelling two fines, then: the one that was in place prior to this, which was 1.5 percent, plus the $500 penalty. I'll just leave it at that.

Hon. A. Petter: Well, I'll take one shot at this. I notice that the minister has now arrived, and he may be able to give you a more detailed version. As I understand it, the 1.5 percent is an overdue penalty. This is a fee-for-service. The two are different; one does not substitute for the other.


R. Neufeld: If that's the case, that's fine; it's in addition. Can I ask one simple question and read it before you respond? In the act now, section 63(a) says: "the rental and does the work, and. . . ." The new one that's added, 63.1, has section (c): "the lessee pays the rental and does the work. . . ." You're saying two of the same things. All I'm saying is to remove one

[ Page 15444 ]

of them. That's all I'm asking. I'm not making a great big historical change to it. Just have it in there once -- unless you want to have it in there twice; that's fine with me.

Hon. D. Miller: I'll try this argument and see how the member responds: I'm advised that the drafter insisted that it be put in in this manner.

R. Neufeld: Hey, listen, if the drafter is stuck on having it in there that way, then I don't have any problem with double wording and saying the same thing two or three times. I'm not sure that the government's going to listen at the end of the day, anyhow. That's been our experience.

One last question on this section, then: what consultation was done with the industry, particularly CAPP, with this change?

Hon. D. Miller: This is really a small part of the broader oil and gas initiative, one of two that we've already announced. The changes that are contained in this legislation really have been vetted by CAPP, the Small Explorers and Producers Association of Canada, the Canadian Association of Petroleum Landmen and the Canadian Association of Petroleum Land Administration. So I think it's generally fair to say that within here -- in another section, the issue of the lease term -- there may be some who might not totally embrace this. But in general, it's been approved by the organizations I've just cited.

Section 45 approved.

On section 46.

R. Neufeld: Again, just a simple straightforward question on consultation with the industry. I know I want to ask section by section to find out whether there was a lot of consultation with industry on this section. If it's the same as the minister told me before, then that's fine with me.

Hon. D. Miller: Yes, it is Mr. Chairman. It's interesting, the wording of the bill. There's a fair amount of language attached to these various amendments. But in its essence, the bill is an attempt to streamline administration. It's an attempt to bring more fairness where there is uncertainty with respect to a situation that might arise where a lessee, for whatever reason, fails to pay the appropriate fee at the appropriate time. It brings more regulatory certainty in terms of the ability to recognize that errors sometimes happen and not have people lose their lease as a result of that. It provides really a very good incentive for work to be done on land that has been purchased for exploration.

Unlike Alberta, we do have a ten-year, where they have five. The provision for increasing the fee in the latter five years for new leases is one that ought to stimulate more activity in the region. It is generally, I think, supported by the industry.

Finally, recent correspondence and discussions I've held with members of the CAPP. . . . I was at the annual CAPP dinner in Calgary a number of weeks ago talking to Steve Savidant of Canadian Hunter and others -- Pierre Alvarez from CAPP. I think it's safe for me to characterize the relationship between the ministry and CAPP as being very, very positive. I've indicated to them that our stance as a government is to continue to be open where issues are identified that may be problematic, as we were last year, for example. We had not examined our heavy oil royalty for a considerable number of years. It was completely out of date; we've adjusted that. As a result of that, Wascana is spending $100 million in your constituency.


We're completely open in terms of our stance. If we identify problem areas that can be fixed by these kinds of amendments, then we want to proceed. I know that the member is in communication with CAPP and others on these questions and would, I hope, accept my characterization of the relationship.

R. Neufeld: I appreciate what the minister said. I guess it's typical that when I attend in Calgary, sometimes I get a bit of a different feeling about what has actually transpired in the rosy getting-along-with-government and everything. It is my suspicious nature that will make me stand up and ask the minister: have you fully consulted with industry? I don't say that industry is always going to agree with government. That in fact is true. But as long as there's been a good consultation process in some of these changes, industry has had their opportunity to lay their concerns on the table and government has actually looked at them seriously, then it's fair ball. I just want to make sure that took place. When I go to Calgary, I don't want to hear from any of those folks that, no, there was no consultation but that, yes, there was. So I will be checking that out.

Secondly, the member talked about Wascana and the heavy oil. Maybe he's not aware -- or maybe he is aware -- that 100 percent of that work originates and happens out of Alberta. Although the wells are drilled in British Columbia, everything is provided out of Alberta because of the border and where the heavy oil is. There's very little of that, in any of the service industries or any of the things that would happen in the constituency, that actually takes place in British Columbia. It all originates out of Alberta, and all the taxes and all that go back to Alberta. The minister and I have had many discussions about that, but I just wanted to make him aware of that.

Hon. D. Miller: Two brief points. One is that I know that the member feels quite confident that there will be a role reversal at some point. I can assure him that if that ever does come to pass, he will find that the reverse might be true, as well, with respect to what he may have to say, were he in my position.

Secondly, I think we're mindful of the issue of competitiveness, and I think all members would agree that the changes we've introduced over the last number of years have significantly improved the competitive position of British Columbia with respect to oil and gas activity. And the issues that we are working on will improve that even further.

I also think it's fair to say that, regardless of jurisdiction, whether it's B.C. and Alberta or any other two contiguous states or provinces, there will always be a degree of difference in those respective provinces or states. In those border areas -- and in British Columbia it happens to be in the northeast and in the Kootenays -- you will always have a degree of debate with respect to the businesses, in this case on the Alberta side of the border or vice versa. Unless, of course, we decide at some future point that we think there's merit in the idea of having a single province called B.C. and Alberta or whatever, you'll always find these frictions. But I am very,

[ Page 15445 ]

very positive about the industry in the northeast. I don't have an exact number, but I think last year the revenue-to-government side -- which shouldn't be the only indicator -- was clearly in the range of $150 million to $160 million over forecast. That's a pretty good indication.

The member is aware that we've announced a $103 million road package, primarily in his constituency, taking the revenue stream from oil and gas and improving roads to improve access, which ought to lead to further activity. We have done an extensive competitive study within the ministry. It's interesting that that competitive study -- very detailed and very technical -- is now being used by CAPP as a base for information. We are working constantly with CAPP to try to identify areas of competitiveness and, quite frankly, areas of myth -- in other words, where people think there's a degree of difference and in fact our analysis shows there's not a difference.


I must say as the minister I'm delighted with what I think is the success of the oil and gas initiative. I fully expect, on a net basis, that oil and gas revenue will exceed forestry revenue in this province. I think, with the discussions that I've held with the Northwest Territories, really, the kind of vision we have in British Columbia and Mr. Kakfwi has in the Northwest Territories are somewhat similar. I expect great things in the future as we look at a shifting north of the industry and the benefits that might flow into British Columbia. We're working very, very hard to try to maximize the return or the benefit to British Columbia by some of the strategies that we're employing. Again, I know the member meets regularly with the commission, and all of this information has been made available to him. We'll continue to try to work in a positive way to. . . . I'm taking too much time, and I apologize, Mr. Chairman.

Sections 46 to 53 inclusive approved.

On section 54.

G. Hogg: I note that in section 54(b), section 14, subsections (1.1)(a) and (b) are intending to increase the duties of superintendents by adding a requirement for them to investigate complaints about parental failure to provide educational programs to children registered as homeschool students, in independent schools and in provincial schools. I note also that that intent was in the legislation prior to '97, at which point, in the amendments to section 14 in '97, I think a similar intent was removed and now is being put back in. My question is whether or not this was an oversight and was left out in the amendments in '97. Or has there been a change in public policy or intent, with respect to this matter, to see it being reintroduced at this point in time?

Hon. A. Petter: I'm informed that what occurred in 1997 was a drafting error. This was not intended to be a change in policy one way or the other. The error inadvertently removed the power to permit persons to report their belief to a superintendent of schools that a child registered as a home-schooler in an independent school was not receiving an educational program. This simply corrects that oversight.

Sections 54 to 57 inclusive approved.

On section 58.

G. Hogg: Throughout the Teaching Profession Act modifications there are references to delegating responsibilities to subcommittees. My question is with respect to those delegations as they exist throughout sections 58 to section 66, I believe -- in that range. The council is elected, and then there is reference to delegations of responsibilities that the elected council has to subcommittees. My question is: are those subcommittee members. . . ? Can that responsibility be delegated to a subcommittee member who is not also a member of the council? Or is there a delegation of responsibilities to people who are non-elected and therefore outside the purview of the elected or appointed members of the council?


Hon. A. Petter: It's just to the elected members.

G. Hogg: My understanding, then, is that this simply allows for smaller groups to gather so that the whole council doesn't have to gather. There could be smaller delegations of responsibility -- committees who have specific tasks. They then report back to the full council. So there's no delegation through legislation to anybody who's not elected to the council.

Hon. A. Petter: Yes, that's correct. In fact the member may take some comfort in knowing that this was a recommendation that came from the British Columbia College of Teachers to clarify the current practice and to make sure that there was a clear legislative footing for the current practice.

G. Hogg: I don't take comfort from whence it comes. However, I understand the minister to be saying that this is just clarifying a practice that is currently in place.

Hon. A. Petter: Yes, that's correct.

Sections 58 to 73 inclusive approved.

Title approved.

Hon. A. Petter: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 8, Miscellaneous Statutes Amendment Act, 2000, reported complete without amendment read a third time and passed.

Hon. D. Lovick: Sorry for the delay, Mr. Speaker; I was finding my desk, because I was required to sit in another place for the last debate. I call committee on Bill 9, the Cooperative Association Amendment Act, 2000.


The House in committee on Bill 9; T. Stevenson in the chair.

Sections 1 to 8 inclusive approved.

[ Page 15446 ]

On section 9.


J. Reid: We do have a few questions on section 9. I'll let my colleague lead off with that.

R. Coleman: The first question relative to section 9(a) is: what is the legislation referring to when it refers to "the member has not paid rent"?

Hon. J. Kwan: The section that talks about failure to pay rent simply means when a member has failed to pay their rent for the unit which they are occupying.

R. Coleman: Just so we're clear, is that rent paid to the co-op with the co-op as a manager or as a landlord-to-tenant relationship? Further on, we also deal with occupancy charges and others. When you're dealing with a co-op, sometimes the definition of rent gets misinterpreted, because co-ops also have tenants where they actually operate as landlords, where some of their tenants are actually paying rent to the co-op when units are in transition.

I'm just wondering if we're dealing with rent as defined in the Residential Tenancy Act or rent as defined under a separate act. I just want to have that clarification.

Hon. J. Kwan: The cooperative structure is such that a member living in a cooperative is not deemed to be a tenant per se, because they are actually a member who holds shares within the cooperative. The rent which they pay will be a membership share or fee that is applied to the unit; therefore the relationship is likened to a tenant-landlord structure. However, because the cooperative structure is such that the members themselves are part-owners of the cooperative, it's not like a tenancy situation.

R. Coleman: Thanks to the minister for clarifying that. My only concern is that it was in the reference to rent, rather than what I think should have been left as occupancy charges -- as a member paying their occupancy charges to the co-op. Once you get into the rental definition, you're actually using a term, I think, that doesn't necessarily apply to co-ops. I think that what they're paying is their occupancy charges, not rent, because they are members of a co-op, and co-ops are a form of ownership with the membership. I was just concerned with that being included in there, rather than just dealing with occupancy charges, leading to confusion down the road.

Section 9 approved.

On section 10.

J. Reid: The assistance for co-op housing members who have had their membership terminated has been explained to me as a concern in this section of the act. Some of the people that I spoke to with regards to these amendments suggested that the ministry was wanting to address the problem of people who couldn't afford their filing fees. I don't see anything in this amendment that actually addresses that, so the question is: is there any intention in this act to address that concern?

Hon. J. Kwan: Yes, actually, it is in its prescribed form. It will be described under the regulation.

Sections 10 to 23 inclusive approved.

On section 24.

J. Reid: This particular section of the act was already amended, and we're looking at another amendment. I would ask the minister to provide a clarification as to the role of auditors and co-ops.


Hon. J. Kwan: This change is essentially intended to mitigate some of the concerns that were raised by the Institute of Chartered Accountants of B.C. and the Certified General Accountants Association of British Columbia, both of which were consulted on it. Essentially, the change is to restrict the ability of the federation to provide auditor service to member associations that are not non-profit associations.

J. Reid: The concept of an auditor in statutes such as B.C.'s Company Act, B.C.'s Securities Act and B.C.'s Society Act is that auditors are independent. The co-op bill and now this amendment address the role of a federation to act as an auditor of its own member associations. We've got a differentiation made between the for-profit co-ops and the not-for-profit co-ops. If there's a concern with regards to one or the other, would the minister define what the concern is with one of the co-ops as opposed to the other and, if there is a concern with the one, why it doesn't relate to the other group as well?

Hon. J. Kwan: In the instance where not-for-profit cooperatives oftentimes actually would have government support or funding that would provide for an accountability at a greater level than a for-profit cooperative. . . . In that instance, the requirement to say that the federation should not audit their own members in that regard addresses the larger accountability question. For the for-profit organizations, then, the accountability is not to government but to their own membership. The application of this act would, I think, address the issue of accountability that way.

J. Reid: So there is a problem with accountability. There is a concern that has been recognized that with an auditor not being independent, there is an accountability question. The ministry, through this act, is suggesting that the non-for-profit co-ops have a greater level of concern -- a greater level of accountability -- because of government support. My question would be: for these other for-profit co-ops, would there be any situations where they would be receiving government moneys?

Hon. J. Kwan: Within this ministry's programs, where the for-profit cooperatives would not be receiving government dollars to operate their business or their venture, they are, however, entitled to apply for a contribution from government to assist them in setting up the structure of the cooperative.

J. Reid: I would like to reiterate the point that the ministry has acknowledged through this amendment in this particular bill: that there is a concern with the independence of auditors and with the federated co-ops. And I don't believe that this amendment in this bill fully covers that concern of independence of auditors and maintaining that independence of auditors. Certainly with the distinction that's been made

[ Page 15447 ]

here, I believe that the government is recognizing that there is a problem there, and it's unfortunate that it hasn't been fully covered off in this.

I guess the question is, then: when for-profit co-ops are recipients of government money, at what point is there any concern on the part of government as far as the auditing function, and is there a certain level of funding that they can receive? Or is it still considered that there isn't a concern at that point?


Hon. J. Kwan: Within the federation, the auditors will still have to be qualified auditors, just like anybody else. So to that end, it's not that there won't be an auditing function but rather that they can utilize the federation for that auditing service.

I think the member needs to keep in mind, hon. Chair, that for the enterprises that are set up under the cooperative model, even if it's for profit, they tend to be small in their nature. They tend to be businesses that are really small in scale as well, and they're clearly looking for opportunities to decrease the costs to their operation. So with that, the federation, by offering its members an auditing service at a lower cost to them, does not mean to say that they would not receive qualified auditing service. They will still get it, because the auditors within the federation will still have to meet all the qualifications that are applicable elsewhere.

Sections 24 to 46 inclusive approved.

Title approved.

Hon. J. Kwan: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; the Speaker in the chair.

Bill 9, Cooperative Association Amendment Act, 2000, reported complete without amendment, read a third time and passed.

Hon. D. Lovick: Mr. Speaker, I now call committee on Bill 3.


The House in committee on Bill 3; T. Stevenson in the chair.


Hon. P. Ramsey: I'd like to ask leave of the committee to revisit section 44.

Leave granted.

On section 44.

Hon. P. Ramsey: I'd like to move the amendment to section 44 standing in my name on the order paper.

[SECTION 44, by deleting the proposed section 49 (2) and substituting the following:

(2) If a peace officer has reasonable grounds to believe that section 14 (3) or 15 is not being complied with, and if it is impracticable to obtain a warrant, the peace officer may, without a warrant,

(a) stop a motor vehicle for the purpose of conducting an inspection under paragraph (b) of this section, and

(b) inspect and take samples of the contents of a tank or container, including the fuel supply tank of a motor vehicle.]

Amendment approved.

Section 44 as amended approved.

On section 64.

G. Farrell-Collins: Sections 64, 65 and 66 all deal with similar matters, that is, the requirement of individuals or corporations based outside of British Columbia who sell goods or services to residents of British Columbia in British Columbia and cause those goods to be delivered to the consumer here in British Columbia. . . . They will now be required not to just collect PST -- provincial sales tax -- but also to register as an entity selling goods to consumers who reside within British Columbia and delivering those goods within British Columbia. Does the minister have any idea how he intends to enforce those provisions?

Hon. P. Ramsey: I think I'll make a couple of points here. The first point I'd make is with respect to interprovincial sales. The majority of Canadian businesses voluntarily comply, so there is not an issue of compliance for the majority. Some businesses are currently registered and remitting tax -- out-of-province, you know -- for sales into British Columbia.

The second point I'd make is this: we are not alone in the country in trying to grapple with this difficulty. One avenue for looking at compliance with this is interprovincial cooperation, because other provinces have the same set of issues.

The final point I'd make is that if it does become necessary to collect and necessary to undertake collection action, the province can pursue the formal court processes. Those are as appropriate for out-of-province vendors and debtors as for those within the jurisdiction.

G. Farrell-Collins: It would appear to me -- and I agree with the minister -- that there are other provinces that face a similar problem. Alberta wouldn't be one of them, because they don't have a provincial sales tax, but certainly the other provinces do. As well, a number of states in the United States have state tax that they are required to, or would like to be able to, collect and are finding it difficult -- as well as other jurisdictions around the globe. This is becoming an ever-growing problem as Internet commerce and sales become more prominent and become a larger and larger portion of the market.


I can understand that the government may have some recourse to companies that are registered and incorporated in other provinces. There are ways to collect those taxes that are due. I guess the question I'm really looking for an answer to is

[ Page 15448 ]

when we get into the other -- particularly the Internet -- commerce, which I think is the area that the government is really trying to deal with here. . . . I know that other jurisdictions are having similar problems, and I know that there's a very heated debate raging right now in the United States about that -- whether the states are going to be able to collect and whether they're going to regulate the Internet or not.

I guess the question I have for the minister is: for those companies. . . ? I assume the large ones -- Amazon.com and the larger ones like that -- would probably be more willing or more able or more likely to participate in the process the government has here. But for the myriad of other companies, I would expect that the government is going to find it nearly impossible to collect on those taxes, despite the provisions in this amendment.

Hon. P. Ramsey: You're right. This is an interesting field as commerce changes and as acquisition of goods and services through e-commerce becomes not an object of curiosity and a special event but a normal way of doing business. I'd point out the following. It's for international sales using e-commerce. We already have some ability, because Canada Customs deals with that as they're imported into the country. That provides one mechanism. They collect for us, as they do for all provinces, when the goods are actually imported. They collect them at the port of entry as they come in.

I want to make it clear that there is an area that is clearly not captured. What these provisions seek to do is address sellers, if they're making retail sales in the province. That means they are advertising in the province -- advertising their products on web sites, say, in the provincial media. It is quite apparent that they are retailers in the province and that they are active in soliciting business within British Columbia.

Simply having a web site that can be accessed from British Columbia is not something that would be captured under these provisions. I do think that the larger issues here are going to have to be resolved at a federal level. I do not think that a province by itself can resolve it. Even internationally, I suspect, as e-commerce evolves there are going to have to be a range of international agreements to deal with some of the issues that you have raised.

It may seem like this has been around a long time. It clearly hasn't. We are at the beginnings of electronic commerce. As it evolves, I suspect that government policy in this province, in other provinces in this country and other countries will also evolve.

[J. Cashore in the chair.]

G. Farrell-Collins: I just want to get some clarification. First of all, am I correct in my assumption that this applies to goods only and not to services? Second of all, the minister said -- and I'm not sure I heard him correctly -- that if someone is advertising in British Columbia on other than a web site, buying television ads, buying print ads, buying radio advertisements, magazines, et cetera, that will be deemed by the Ministry of Finance as seeking to do business in British Columbia. Therefore that would require them to register under this act. But merely advertising on a web site that one could pick up and access while living in British Columbia would not constitute, in the government's mind, an attempt to solicit business and sell goods to people resident in British Columbia. Is that correct?


Hon. P. Ramsey: In the interests of moving things along, rather than simply repeating what you said, I'll say: "Yes." I think you've captured it very well.

G. Farrell-Collins: What about a case where a company is providing. . . ? When one buys software, for example, there may be ongoing support services that are provided over the telephone or over the Internet to support that software. Sometimes that's included as part of the costs. Sometimes it's not included as part of the cost. How would the government deal with that scenario?

Hon. P. Ramsey: Software that's sold from an out-of-province vendor into British Columbia would be subject to provincial tax. Similarly, if servicing was offered from out of province to B.C. purchasers of that software, it would qualify essentially as repair of a good, and it, too, would be subject to tax. Obviously in the case of software that's simply downloaded from the Net, it's very difficult to ascertain this.

G. Farrell-Collins: Maybe I'm not up to speed on this. Is the minister telling me that in general in British Columbia, support services for software are considered a repair, not a general service, and are subject to the PST?

Hon. P. Ramsey: Yes; they're considered repair and maintenance services to a good.

G. Farrell-Collins: The minister said earlier that currently the federal government, through the agreements that we have with what used to be called Revenue Canada -- I can't ever remember what its new name is. . . . At the present time they collect PST for us at the border, at the port of entry. If that's the case, it would seem to me then -- correct me if I'm wrong -- that that tax is being collected directly by Revenue Canada from the consumer. Therefore why would companies outside of Canada be required to register under these sections in order to collect and pay that tax? Would it not be a double taxation?

Hon. P. Ramsey: These provisions are still intraprovincial. There's no intent here to ask international vendors to register under these provisions.

G. Farrell-Collins: That's different from what I thought; I must have been wrong. I thought we were discussing international sales earlier too. But that's fine.

I'm then assuming that section 64 of the bill in front of us amends sections 92 and 93, and that those sections apply to people or companies located outside of British Columbia but within Canada. Is that correct?


Hon. P. Ramsey: Section 64 is intended to deal with registration requirements for sellers located within Canada but outside of British Columbia.

G. Farrell-Collins: How much cooperation do we have from the government of Alberta in collecting these kinds of sales taxes from companies that are located in Alberta? I understand there would be some incentive from provinces which also apply a sales tax to be part of that cooperation. I'm

[ Page 15449 ]

wondering how closely we work together with the government of Alberta in them helping us to collect our provincial sales tax.

Hon. P. Ramsey: You're quite right in saying that where both provinces have a sales tax regime, the incentives to scratch each other's back is higher than in the case of Alberta. But we seek to work with Alberta on a wide range of interprovincial issues. We are part of a country, not autonomous states, so there is cooperation between folks in my department and the equivalent in Alberta.

In terms of just straight financial incentives, are the incentives there to the extent that they would be would be between, say, British Columbia and Ontario, where there are a large number of catalogue outlets? No. The incentive is far greater with Ontario.

G. Farrell-Collins: I would think that British Columbia would carry a lot more weight in those negotiations not just with Alberta but with other jurisdictions, if we had not been the one province out of bounds on the interprovincial trade issue. I would expect that trying now to go back to the other provinces and get them to help us collect our provincial sales tax must be somewhat difficult. Perhaps it's not, but I would think that they would be far less willing to cooperate when British Columbia has been so intransigent on what is, I think, widely seen as a policy move that will be beneficial to Canadians regardless of which province they're in. I wish the government good luck on this. I think you may find it's more difficult than one thinks.

One of the provisions of this that I think can be a problem, too, is that now anybody, if it's a catalogue sales outlet or anyone who is selling -- in this case, an Internet e-commerce business located in Canada but outside of British Columbia or, for that matter, in any jurisdiction -- is going to find that they now have to register in ten provinces -- go through the paperwork of registering, collecting and submitting sales tax in ten provinces. I'm not sure how well they're going to respond to that.

I'm not sure what the solution is, but I don't think the government is going to find an awful lot of willingness on behalf of these businesses to participate in that process. I'm not sure that the government is going to have a lot of success trying to collect. We'll wait and see how it goes, but I expect the government is going to need a fair bit of luck in implementing these sections of the act.


Hon. P. Ramsey: Through the Chair to the member, you're right. This is, as I said in some of my remarks, an evolving area of business.

I do think that the answer is not ten different provincial approaches to it but federal coordination of it. Say if a business doing e-commerce has one source of registration and one way of collecting social service taxes, whether it's GST -- which is already being collected by the federal government for e-business doing their thing in Canada -- and trying to work on PST as well. . . . I think the solutions are through federal-provincial cooperation.

Sections 64 to 71 inclusive approved.

On section 72.

Hon. P. Ramsey: I move the amendment to section 72 standing in my name on the order paper.

[SECTION 72, by deleting the proposed section 123 (3) (d.1) and substituting the following:

(d.1) refuses to produce records or books of account or hinders or molests or interferes with an inspection, audit or examination or prevents or attempts to prevent a person from carrying out an inspection, audit or examination under this Act;.]

Amendment approved.

Section 72 as amended approved.

Sections 73 to 84 inclusive approved.

On section 85.

Hon. P. Ramsey: I move the amendment to section 85 standing in my name on the order paper.

[SECTION 85, by deleting the proposed section 39 (4) (d.1) and substituting the following:

(d.1) refuses to produce records or books of account or hinders or molests or interferes with an inspection, audit or examination or prevents or attempts to prevent a person from carrying out an inspection, audit or examination under this Act;.]

Amendment approved.

Section 85 as amended approved.

On section 86.

G. Farrell-Collins: Section 86 does a couple of things. My understanding -- correct me if I'm wrong -- is that it changes the way the amount of tobacco that a person is licensed to or able to have at one time without a permit is calculated. It's no longer done in numbers of cigarettes but rather is done in quantity measured in grams. Is that correct?

Hon. P. Ramsey: Yes, that's correct.

G. Farrell-Collins: I think it also, under section 86, which is an amendment to section 40 of the Tobacco Tax Act. . . . If we go to section 40(b)(4) here, the last paragraph of 86 in this bill, it says once again in that interesting language: ". . .is, in the absence of evidence to the contrary, prima facie evidence that the person unlawfully possesses or keeps tobacco, or possesses or keeps tobacco for an unlawful purpose." Is that new language that's being added to the bill?

Hon. P. Ramsey: The wording there parallels section 39 of the act; that's the information I have. I don't think we have an amendment, as we did in the other sections that we changed.

G. Farrell-Collins: Again, my concern with this kind of legislation is that it establishes or alleges a set of facts and then finds the person, in essence, guilty of an offence. Then it's up to that person to prove that they're not. I know the wording isn't exactly the same as it has been in some of the other sections which we've amended. But again the reverse onus is, "We've caught you with this; now you have to. . . . You've

[ Page 15450 ]

committed an offence, unless you can convince us otherwise" -- as opposed to having the onus on the Crown to make the case.


As I said earlier -- I won't go into it in great length -- in other sections of this bill I have a concern about that kind of reverse onus that's put on individuals. My opinion is that it's the Crown that has to prove its case; it's the ministry that has to prove its case, not the individual. There may be instances where someone has a certain amount of tobacco for themselves and tobacco for a family member, and they're transporting it back to a remote location, which. . . . Maybe somebody is going to be living in a remote area for the duration of the winter, and they want to have that tobacco with them for the winter. They could end up in trouble because of that. I think that's perhaps not the intent of the act, but putting the reverse onus on individuals to prove their innocence is of concern to me.

Hon. P. Ramsey: I don't think there's a real difference between us about the concern. Reverse onus should be used in specific cases, and it should be used cautiously. Here it's used because. . . . In the real world, it's necessary to allow police to seize relatively large quantities of tobacco where the person who has them can't provide reasonable evidence that they hold them for a lawful purpose. Everything you've talked about in terms of, "I'm headed out to the bush for 14 days," and "I've been told to come into town to buy cigarettes for my buddies, and I'm headed back," or whatever, is evidence to the contrary.

The intent of this act is to allow police to deal not with that sort of situation, frankly, but with a U-haul trailer full -- that's really the target here -- and to enable police to deal with what clearly is unlawful activity.

Sections 86 and 87 approved.

On section 88.

Hon. P. Ramsey: I move the amendment to section 88 standing in my name on the order paper.

[SECTION 88, by deleting the proposed section 47 and substituting the following:

Right to search for tobacco

47 If it is impracticable to obtain a warrant, and a peace officer has reasonable grounds to believe that

(a) tobacco is unlawfully possessed or kept, or possessed or kept for an unlawful purpose, or

(b) there are records or any other thing that will provide evidence related to tobacco that is unlawfully possessed or kept, or possessed or kept for an unlawful purpose,

the peace officer may, without a warrant,

(c) enter and search in any place or premises, other than a residence, for tobacco, records or any other thing referred to in paragraph (b), and

(d) stop a vehicle, vessel or aircraft, and search for tobacco, records or any other thing referred to in paragraph (b).]

Amendment approved.

Section 88 as amended approved.

On section 89.

G. Farrell-Collins: Section 89 is an amendment to section 49(1) of the Tobacco Tax Act, and if one goes down to subparagraph 1, the second-to-last line, this is similar but not identical to some of the other provisions we saw earlier in the bill. In this case it requires the. . . . I'll just read the whole section: "If a peace officer stops and searches a vehicle, vessel or aircraft, or enters and searches a premises or any other place under section 47 or 48, the person in charge of the vehicle, vessel or aircraft or the owner or occupant of the premises or other place must give the peace officer all reasonable assistance in connection with the stoppage, entry or search."

Again, while not identical, it sounds very similar to some of the requirements to cooperate that existed in a number of other sections of this bill prior to amendment by the government. I would be anxious to hear the minister's rationale for requiring that, especially when subsection (1.1) really describes what the person can't do. And again, the wording, although not identical, is similar. The person must not "hinder, molest or interfere with a peace officer" or "attempt to prevent a peace officer from doing anything that the peace officer is authorized to do under this Act."

It seems to me that sub 1.1 proscribes what you can't do, and I don't know why subsection 1 requires the person to give this very nebulous "all reasonable assistance to. . . ." I have a concern with that. You don't need one if you've got the other. I think it's unclear and could put individuals in an uncomfortable position.


Hon. P. Ramsey: I've just been comparing the Tobacco Tax Act to the wording in Bill 3 here. At least my scan of it and staff's scan of it show that there is no amendment to the act being proposed under subsection (1) of section 89 of this bill. The wording is identical to what exists in the legislation now. No changes are being proposed.

Nor is there any change to item (a) under (1.1). That is the identical language. So the only real change here was in (b) and was an attempt to deal with . . . . The way section (b) read was really requiring people to incriminate themselves by providing "all information relative to the stoppage, entry or search that the peace officer may reasonably require." That was self-incrimination, and so that has been amended. That's the only intent of this section.

G. Farrell-Collins: Well, perhaps it should be amended further. Perhaps the error has been there for longer than we know. It may or may not have been a problem in the past. I don't know how long the previous amendment has been in existence or the previous provision has been in the act.

It would seem to me that one could make this a very simple section by essentially omitting everything after the words "section 47 or 48" and just following it through. So it would read: "If a peace officer stops and searches a vehicle, vessel or aircraft, or enters and searches a premises or any other place under section 47 or 48 a person must not" -- (a) and (b).

The reason for that is that it clarifies for the government's purposes. . . . Subsection (1) isn't really drafted all that well anyway, because it only requires "the person in charge of the vehicle, vessel or aircraft or the owner or occupant of the premises" to give. . . . It doesn't require someone else who

[ Page 15451 ]

happens to be there or happens to be a passenger. It doesn't apply to anyone on board the aircraft who isn't in charge. I assume that would be the pilot in command. Anybody other than the pilot in command would not be considered to be in charge; therefore they're free to not provide all reasonable assistance.

I think what the government is really trying to do is contained in the meat of the section, which is subsection (1.1)(a) and (b). If we were to just end it after 48 and roll in the other and put it all together as just one section with an (a) and (b), it would be far clearer, more proscriptive and give the government more control and clarity as opposed to sort of two-status. . . . Currently, as this is written, there are sort of two categories of people there. There's the person in charge, who has some duties, and then there are all the other people that have other duties. I'm not sure that's what the government's intent was in the first place.

Hon. P. Ramsey: I'm not sure I want to enter into a protracted debate on subsection 89(1), since this is the existing legislation. We could well consult on it. Legislative counsel have advised us that there are really two different criteria here. Of the person in charge of the vehicle, vessel or aircraft, the act requires that reasonable assistance be provided to the police officer. Subsection 89(1.1) does the reverse and says that any person around, whether they're operating or not, mustn't "hinder, molest or interfere." It doesn't say anything about reasonable assistance. So they are really two different tests. I recognize that we could debate whether it's ideal. Legislative drafters have said that there are two, and the distinction between them is important.


G. Farrell-Collins: I also won't belabour it, and I'll take the minister's advice on it -- that there's a need for that. I'm not sure what it is, but one can speculate. If it's required to have two classes and two requirements or duties for them under the act, then I'm willing to accept that, although I do think it would be clearer if it were changed. But if there's a need for it -- in the absence of a real explanation as to why, other than he has been told so -- I'll accept the minister's word on this one.

Section 89 approved.

Sections 90 to 96 inclusive approved.

On section 97.

D. Symons: On section 97 -- the British Columbia Ferry Corporation Debt Extinguishment Act -- I note that it's dated and that they're going to take over the debt of the corporation up until the date of March 31 of this year. I am wondering if that is the complete debt of the corporation. A lot of this debt was concerned with the construction of the fast ferries and other things. I am curious whether that will include all the construction costs of the fast ferries that might occur after that date. Or is it simply that that's the cutoff date? At that date, what debt is left with B.C. Ferries?

Hon. P. Ramsey: The $1.08 billion is net of unamortized premiums, discounts and related sinking funds. The total amount of gross debt being forgiven is $1.13 billion. That is substantively all. There are some debts that remain with B.C. Ferries -- some unamortized debt. I think the easiest way, rather than going back and forth here -- unless the member wishes to -- is simply to have staff brief him on what debt remains with B.C. Ferries.

D. Symons: Yes, I'd appreciate that at another time rather than here, as you say, because I have some interest in that. Still on that thought, however, there are three fast cats up for sale right now. According to the minister responsible for Ferries, somehow there may be $120 million -- $40 million times three. Will that come back to the treasury, or will that go back to B.C. Ferries and give them a heads-up, then?

Hon. P. Ramsey: Moneys from the sale of the fast cats will be retained by B.C. Ferry Corporation.

D. Symons: So basically, if there are outstanding obligations due to the ferry construction and so forth, this will tend to mitigate those expenses for B.C. Ferries, then. One concern I have with this particular -- what I'll refer to as a government bail-out, because it's simply taking the debt obligation away from B.C. Ferries and putting it on the people of British Columbia by bringing it back into the government. . . . [Applause.]

Obviously I have an agreement here. One concern I have, though, is that I hadn't known -- and maybe the minister can confirm this -- that there is some sort of management plan put in place so that B.C. Ferries will not move itself again into the situation that we're now looking at on this particular section of this bill.

They are now looking at going into some more capital programs and other programs of the ferries -- I think somewhere around the neighbourhood of $400 million. That would seem to be moving the Ferry Corporation back into the situation that today we're bailing them out of.

I'm wondering if you have insisted -- before you go into this program of bailing them out of the previous debt they have -- upon some program, debt management plan or business management plan being in place so that we will not get to the stage where B.C. Ferries will have increasing and increasing debt, and they'll be more and more unable to take care of the debt-servicing charges.


Hon. P. Ramsey: First, let's deal with the issue that the member raised. B.C. Ferries has been told very clearly that it must not assume a debt, even for very needed facilities such as the ones that the Ferry Corporation announced recently, which it cannot service through its own revenues. We will be in Treasury Board monitoring this very carefully.

As the Ferry Corporation said when it released its capital plans, the first year of that has been approved by Treasury Board. That's the extent of the approval, and we'll be looking very hard at subsequent years.

D. Symons: I guess we've had those assurances over the last five years as the Ferry Corporation went more and more into debt. We found out through the auditor general that there didn't seem to be any monitoring of the debt. They simply kept on adding money into the cost of the fast ferry program primarily but also other projects that the corporation went into.

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I may be heartened a little bit when you say you're going to do it year by year, because you've now given the first-year funding -- that they will be able to handle that. You're going to look at this year by year, and you'll be assessing, I suspect, much more thoroughly than had been done previously to see that they are able to handle the debt. Is that the understanding I was given?

Hon. P. Ramsey: Yes, they are.

M. Coell: I wonder if the minister could break down for me the debt obligations not to exceed $1.08 billion. How much of that money is for operating costs over the past -- I would think -- decade, anyway? How much was expended on capital costs such as the fast ferries?

Hon. P. Ramsey: I regret to tell you that I don't have that information with me in the chamber. I did at one time have it in my head when we announced the debt recision of fast ferries back in February, but memory has failed. There are staff watching now. I'll seek to have them bring it into the chamber as quickly as possible.

M. Coell: The point I wish to make -- and I appreciate getting those numbers -- is that a good portion of that, now debt retirement, is operating costs that have accumulated over the years. The point that I want to make to the minister is that we're now having to borrow money to cover operating costs that we've spent just to run the system. I suspect that you're probably borrowing it over a ten-year period and paying interest on operating costs of probably 6 to 7 percent over a ten-year period, which probably will come close to adding another 50 percent to the cost of this. So in retiring a debt for operating costs, you're actually paying twice for the operating costs of something we've already done. I don't think that sits well with most of the taxpayers. I'll be interested in hearing the breakdown of operating costs, so I can estimate the interest cost and the total -- the real -- cost of writing this debt down. It's a lot more than the $1 billion.


Hon. P. Ramsey: Yes, this debt is a blend of operating and capital costs. Yes, we are assuming all of that debt. We'll get you the breakdown of whether the debt was incurred to build the Spirit-class ferries or the fast cats or to make dock and facility improvements or whether it was the accumulated operating deficits of B.C. Ferry Corporation -- all of those go into this. What I will say is that through the action of the government, we are ensuring that that does not happen again.

One of the great concerns expressed by residents in the member's riding -- and in many other areas on Vancouver Island and other areas served by B.C. Ferries -- is that unlike the highway systems, they didn't have a dedicated stream of revenue. Well, we've changed that. We've made sure that B.C. Ferries has access to a dedicated stream of revenue by a fuel tax, which we firmly believe will enable B.C. Ferries to do the necessary work of maintaining the good service for the people of coastal British Columbia and to do needed capital improvements and renovations to the fleet and to facilities.

K. Krueger: Kamloops-North Thompson, that's where I'm from. Kamloops is where the Minister of Municipal Affairs is from. People in Kamloops and the North Thompson Valley don't take the ferries very often. They do take the Coquihalla Highway very often, and they pay a toll every time they go up and down it -- $38 million a year, enough money to totally pay for phase 1 of the Coquihalla Highway. That's all its construction costs since that toll was implemented. And it goes on and on. This government's not showing any sign of ever intending to end that.

There's no toll on the mid-Island highway. It's badly built; there are traffic lights all up and down it, even though it cost 50 percent more than the Coquihalla. But we're still paying the toll in Kamloops -- $38 million a year, and it just clicks round and round.

I've got to tell you, on behalf of my constituents and the constituents throughout the interior, we don't like this at all -- that this government can ride roughshod over all the rules of doing business, not bother with business plans. I see the member for Yale-Lillooet, and the Minister of Transportation and Highways is speaking in the member's ear. I hope he's telling him the same thing: that the people in Merritt, the people throughout Yale-Lillooet, don't appreciate having to pay a toll on the Coquihalla Highway and having that money sucked out of our local economy and squandered down here on B.C. Ferries for fast cat ferries that don't work -- half a billion dollars for that.

But $1.13 billion being pumped into this corporation with carte blanche to go ahead and borrow more money. . . . Here's Mr. Lingwood, quoted in the Province on April 19, saying that the corporation needs to embark on a 15-year construction program: "Lingwood said the corporation, after clearing its books through the transfer of debt, expects to assume new debt. . . ."

Well, there we go. If there are no consequences to running a corporation this way, then why wouldn't people continue to run it the same way?

The government is giving the Ferry Corporation, as the article says -- and the minister was just talking about it -- another $72 million-a-year annual subsidy. You're going to tax people throughout this province on their gasoline to continue to pour money into the black hole that B.C. Ferries has been over the years. This is absolutely preposterous. That half a billion dollars that was wasted on fast cats and the other $600-and-some million that's included in this little provision of Bill 3 is money that's needed in my constituency. All our lives, people throughout the interior and in the minister's own constituency have seen our resource revenues and our tax money sucked down these black holes in Victoria and Vancouver. The money doesn't come back, and the programs don't come back.

We have 363 people on a wait-list to get into intermediate care and extended care in Kamloops -- 363 people. This government has not built a single bed in continuing care facilities in their whole decade in office, not one. We've got aging facilities; we've got worn-out equipment; we've got staff hurting themselves lifting patients, because they don't have lifts. There's no money for anything. The health region is out of money. We have a multilevel health care facility on the drawing board in Clearwater that this government promised eight months before the last election, and it hasn't had the money to put a spade in the ground. We've had all this foofaraw about a psychiatric facility attached to Royal Inland Hospital -- no spade in the ground there, either.

We've got a sign on a school site up in Aberdeen in Kamloops that says that construction will begin on that school

[ Page 15453 ]

site in, I think it's September of 1997. There still hasn't been a spade in the ground there, because there's no money for anything except for this government to squander on its foolish political decisions like the fast cat ferries and its preposterous waste of my constituents' taxpaying money and their resource revenues.


Our university has been underfunded for years. We have this government bragging deceptively about its tuition freeze when it's been starving the university. We've got outdated buildings that have to be replaced. We could be putting a whole lot more nurses through our nursing program if there was the money for that. This is real money.

The Finance minister sits over there grinning and grimacing and acting like I'm telling jokes here. I'm not. His constituents are angry about this.


K. Krueger: Okay; the Highways minister says that I am a joke. He thinks this is a joke -- that I would stand here on behalf of his constituents, who he doesn't have the jam to speak on behalf of, and tell this government that it is wrong to take $1.1 billion out of the hides of taxpayers throughout the province to pay for the boondoggles that constitute B.C. Ferries management decisions.

We've got CUPE workers throughout our school district who have been cut back in hours -- jobs that have been cut back. The school district's suffering; it doesn't have money. The kids have been moving out of the province with their families as this stupid government has destroyed our economy. So the school district population is shrinking, and the government's cutting back the funding, per capita, because the kids are gone. They've still got the capital expenses, they've still got the operating expenses, they've still got to service their whole infrastructure, but there's no money. Why is there no money? Because these people waste it on B.C. Ferries and on deplorably stupid construction projects like the fast cat ferries. Every time I see one of those things, I want to throw up.

We have fishing resorts throughout my constituency that are being put out of business. When this minister was Environment minister, he came up and spoke to the fishing resort operators association. They said: "You're bleeding us white; we're going out of business, because you keep jacking up our assessments, jacking up our taxes, jacking up our lease rates. You don't recognize the contributions we make to the economy, and we're really upset with you." And what did the minister do? He rebuked them, because he felt they spoke rudely to him. He was an important cabinet minister touring, and he'd never be back -- which he never was.

Now he takes a rubber hose to those same people who are struggling to stay in business with this government's hands in all their pockets. What does the government do? It turns around and wastes that money -- $1.13 billion -- and a minister from Prince George stands up there with a straight face and makes out that this is a good idea.

We've got dangerous situations on our highways. The Highways minister couldn't come up with any money to fix Preacher Hill curves, otherwise known as pig corners on Highway 5. Oh, he might be able to afford a little surveying this year. Where was he when this $1.1 billion was squandered? Where was he when this government decided that it's going to suck money out of my constituents, and the Finance minister's and the Highways minister's, for every litre of gas they buy so the Ferry Corporation can continue to flush that money down the toilet of its mismanagement and its stupid spending programs.

You fellas over there in cabinet might think this is really funny. You might sit there and chortle. . . .

The Chair: Through the Chair, hon. member.

K. Krueger: Thank you, Chair. Through you to the Transportation minister, if his constituents could see him grinning and flopping his little limp wrist over there and acting stupid, they'd never vote for him again.


The Chair: Order. Would the. . . ?

Hon. D. Miller: Point of order.

K. Krueger: The former Premier. . . .


K. Krueger: Yeah, sit down.

The Chair: I recognize the Minister of Energy and Mines on a point of order.

Point of Order

Hon. D. Miller: Mr. Chairman, I detected within the member's last comments, comments that I take offence at, that I would think every member of the House would take offence at. I'm not going to repeat them, hon. Chair. I think everyone here heard what I think is an offensive remark. The member should deal with the issues at hand in the bill instead of ranting and demonstrating that if there is ever a change in government, his colleagues will ensure he's never on the cabinet benches.

The Chair: The Opposition House Leader on the point of order.

G. Farrell-Collins: The member for Kamloops-North Thompson was commenting on the fact that the member -- the Minister of Transportation and Highways, the member for Yale-Lillooet -- was waving him off and telling him to sit down. I think if there's any member that's out of control, as usual, it's the Minister of Employment and Investment -- or Energy, Mines and Northern Development, in this case.


His point of order is a spurious one. He may not like the comments made, he may not like the comments by members of the opposition. That's probably because he's the one who is responsible for a good $463 million of the money that's been

[ Page 15454 ]

blown on this deal. He just finds it very uncomfortable to actually take account of and be accountable for his own misbehaviour and his own incompetence.

The Chair: I would call on all hon. members to use appropriate language during our comments in the House.

K. Krueger: It's probably fitting that the former Premier, former Deputy Premier and present Minister of Energy and Mines would get up and spout off a little, because he's certainly got ownership in all of this.

An Hon. Member: He ran the program.

K. Krueger: He ran the program. He was involved in Treasury Board. He's involved in all the decisions. He voted. . . .

An Hon. Member: He was the minister responsible.

K. Krueger: Minister responsible for B.C. Ferries. He racked up the debt. And it's just fine with him if his constituents and mine and every constituent in the entire interior of the province has to pay through the nose for the rest of their working lives.

This government decided it's just going to kick back and say: "Okay, B.C. Ferries, so you squandered $1.13 billion. That's okay. We'll just absorb it. We'll take it into the debt that we've more than doubled in the decade that this poor province has had the misfortune to have an NDP party at the helm. We'll just take it on and make it part of the $36.5 billion debt that we're admitting to now. We'll just continue to pay interest on it, which we presently have to budget $3 billion a year for that ought to be going to health care, education, early childhood development and the many needs of the people of this province. That's okay. And by the way, B.C. Ferries, if you want to borrow more money, you're free and clear to do that now. Just make sure you can service it. But -- wink-wink, nudge-nudge -- if you want to run up another $1.1 billion, we'll probably just do this again, if it's up to us."

Well, it's not going to be up to you folks. You're going to be gone. Through the Chair -- Chair, too, for that matter -- you're not going to be in the position to make these decisions or these stupid moves any longer, because you're all going to be out of here. People will not stand for this.

The roads throughout our province are crumbling. The Highways minister, happily, isn't grinning or making silly motions any longer, because these are his responsibilities. Those roads are crumbling. They haven't been maintained. Rehabilitation hasn't been done, and the damage is escalating rapidly now. There are dangerous situations on our highways all through this province that aren't being fixed.

Our highways are not being upgraded, and we're losing transportation business to the United States. When Canadian traffic comes across the Prairies, it would rather make a left and go down south and head the rest of the way out to the coast through the States, because our highways are in such disarray. This minister had to admit in his estimates as Highways minister that until the federal government comes up with some money, nothing's going to happen in B.C., because we don't have any money.


The Chair: Order, hon. members. All comments through the Chair, please.

K. Krueger: I appreciate it when you settle that Highways minister down when he's getting sensitive about his part in this boondoggle that he's perpetrated on the province of B.C.

The fact is that we're in a mess in B.C. We've got deficits every which way. It's not just a financial deficit. It's a deficit of people moving out; it's a deficit of intellect, especially on that side of the House, because the brain drain is a very clear reality. People are leaving. We've got problems every which way. Our roads are in disarray; our infrastructure hasn't been maintained, let alone added to. We weren't ready for the new millennium, and we aren't now. We're a laughingstock.

I spoke to ministers from Alberta recently, and they said: "You know, we've benefited big time from people moving out of B.C. and your economic activity coming to Alberta, but we're not happy about it. When your neighbour does poorly, you don't do as well as you should either." Everybody in Canada is longing for British Columbia to have a good government again and get back in a situation where it's providing the kind of leadership to Canada that British Columbia always did provide. We were a flagship province in this country, and now we're a wreck.

I wish that ministers across the other side -- the Finance minister, the Highways minister and the rest of them -- would have the decency to at least not act silly, as the Highways minister is again right now, and not smirk and laugh as they stand here preparing to ram yet another objectionable provision of another stupid bill through this House, so that they can just glibly say to their buddies: "Yeah, we squandered $1.1 billion. Yeah, we wasted half a billion bucks on the fast cat program, but we don't care. We're just going to carry on. We're doing a SkyTrain extension now, and we're doing things a lot the same way. There's more to come." We're just supposed to sit here and take it. And all of those people on the other side will no doubt vote for this.


I'm here to tell you, on behalf of the member for Yale-Lillooet's constituents, on behalf of the member for Prince George North's constituents -- that is, the Finance minister. . . . On behalf of people throughout the interior of British Columbia, we don't accept at all that you conduct yourselves so disgracefully, irresponsibly. You run up these huge debts, and then you just say: "Well, Mr. Taxpayer, you can pay it." And you don't even bother to apologize.

I'm here to register my thorough disapproval of this provision of this bill. I will be voting against it. I am absolutely convinced that there is not a constituent in either the Finance minister's riding or the Transportation minister's riding that would want them to vote for this provision. I challenge them for once to show some accountability to their constituents and not do this.

Hon. P. Ramsey: That was a wide-ranging dissertation, much of which had nothing at all to do with section 97 of Bill 3. It is always interesting to listen to the member for Kamloops-North Thompson.

I must say that I found it remarkable as he expressed his vociferous objection to providing a dedicated stream of revenue from gas taxes to B.C. Ferries. Frankly, I thought. . . . This

[ Page 15455 ]

is an initiative that I think has received broad support from both sides of the House, recognizing that B.C. Ferries is seen by those who live in coastal communities as part of a highway system. Just as we used gas taxes to pay for highway renovations in that member's riding to the tune of $65 million over the last four years -- or in my riding or in the Minister of Transportation and Highways' riding -- in exactly the same way, we're dedicating a stream of revenue to B.C. Ferries to maintain the operations of that vital part of the highway system and to finance necessary capital improvements to that. I find it remarkable that he would stand up here and oppose this. I think it is excellent public policy to provide this stream of revenue to B.C. Ferries, and in spite of his wide-ranging attack, much of which verges on unparliamentary language, I hope he'd at least stand up and recognize that it makes good public sense.

I. Chong: I too would like to make some comments on section 97. First of all, I was listening earlier to some of the questions posed on this side of the House to the minister. I find it outrageous, actually, that the Minister of Finance should come into this chamber asking members on this side of the House to extinguish a $1.1 billion debt without providing full and open disclosure as to the makeup of that debt. When the member for Saanich North and the Islands asked for details and the minister says, "Well, we'll get that to you as soon as we possibly can," doesn't the minister realize that that's not acceptable? It's $1.1 billion, and he hasn't got a breakdown as to how much is capital, how much is operating and to just what extent those operating costs are going to cost us in the future. Surely a Minister of Finance would have all that information and should provide it to us. If this is supposed to be open and accountable, I think he's going to get a failing F grade.

As I read through this bill, this section, even the wording is offensive. The description of what we're being asked to do here, to extinguish this debt -- debt that is owed to the government by B.C. Ferry Corporation. . . . Well, it's not owed to the government; it's really owed to the taxpayers. We're the ones who are going to have to pay for this. This represents loans that were made by the government to the corporation from taxpayers' dollars. And while this government was doling out all this money, it never thought to ask all the members -- and all the constituents we represent -- what they thought of this.

Well, I can tell you what $1.1 billion represents to the constituents that I represent in Oak Bay-Gordon Head. Of the $1.1 billion, $12,925,000 would have been the share that Oak Bay-Gordon Head constituents would have to deal with. I can't go back to those constituents and say: "Well, do you think this is the right thing to do? Do you think that you should absorb $12,925,000 because this government, over nine years of mismanagement, has decided that this is the way we're going to approach this? And by the way, that's not going to be the end of it, because there's no provision in this amendment to the Ferry Corporation Act or this debt extinguishment that this will never happen again -- primarily because we have not had a full and open public debate on why we got to the mess that we got to. Also, there's no prevention or any measures imposed to ensure that there will be better management of the moneys."


When the minister mentioned a moment ago the gas revenues going to B.C. Ferries, I think he should have acknowledged that it would not be so objectionable if in fact all taxpayers throughout this province recognized that there would better management and that the moneys would be spent properly. But when there is blatant mismanagement that everyone can see, and then this Minister of Finance gets up and tells us that this is good public policy and tries to defend it, I think he's missing the boat here -- pardon the pun. He doesn't realize why everyone -- and I'm sure constituents in his area -- is so upset with him.

So I, along with my colleagues, find the extinguishment of the B.C. Ferry Corporation debt not supportable because of the actions of this government, because of the actions that they have allowed to take place and because they have turned a blind eye for the last nine years -- especially over the last four years -- as to what has been going on. From a $60 million debt in B.C. Ferries Corporation, a manageable debt at $60 million nine years ago, to a $1.1 billion debt now is just not acceptable, particularly when we don't see any plan -- a four-letter word that seems to be missing from the vocabulary on that side of the House -- on how we're going to avoid this in the future.

When we see that operating costs are part of the $1.1 billion, we need to know the accumulation of those operating costs. We know what the B.C. fast ferries project has cost -- the $463 million. But the cumulative losses that have been racked up since 1991, since this administration has been in charge, need to be publicly disclosed now. If it shows there has been mismanagement in that area and there is no opportunity to change that, we'll be back here again. This government will be asking for another opportunity to extinguish debt, especially if they've increased that operating loss over the last one or two years. That has not been disclosed here. I'm hoping the Minister of Finance now has had the time and has sent his staff out to gather all this information, because that is very important to the people that I represent.

Hon. Chair, $1.1 billion is not loose change. It's $275 per person in the entire province -- $12,925,000 for the people that I represent in Oak Bay-Gordon Head.

Until this government realizes that it has to have a Ferry Corporation that properly services the debt and can operate sufficiently and manage its fleet, its maintenance, and run an effective service for the people, there will be no one that has any confidence in this minister or in this Ferry Corporation. I'm hoping that the minister can offer that, but until such time as he does, I lend my opposition to this section, and I will not be supporting it.

Hon. P. Ramsey: I'm sorry to hear of the member's opposition to extinguishing B.C. Ferry Corporation's debt, providing a dedicated stream of revenue for them and making sure that the Ferry Corporation has a future for all the residents of her riding and other ridings in coastal communities.


I must say, I am tempted to take her opposition to this provision and distribute it to the people of the Vancouver Island chambers of commerce, who have written to me and to the minister responsible for Ferries, asking for precisely this: to take Ferries' debt off their books. There was a policy that was brought into force back in 1989, if memory serves, that said that the Ferry Corporation was to be responsible for its own capital investments as of that date. I must say that we have. Under that policy the Ferry Corporation found that it was unable to get its house in order, particularly given the lack of a dedicated revenue stream.

[ Page 15456 ]

Now, we can go on like this, but this is part of a good initiative to make sure Ferries Corporation runs well into the future. It does have. . . .


Hon. P. Ramsey: The member opposite is saying: "Bring us the details." We'll be pleased to, hon. member. The only thing that keeps me from starting to talk about numbers now is because I wouldn't want to misstate myself; I would be operating from memory.


The Chair: Order, hon. members; order.

Hon. P. Ramsey: The information on all the projects that are captured by this debt, including both operating and capital, was actually released fully to the public at the time when we announced that this was going to be taken over. I'm surprised that the member is not aware of it, because I believe that members of the opposition's research staff were in on the technical briefing that provided that level of detail. We will provide it again for you so that you can look fully at all the items, because we think you should know what this consists of.

The final thing I'd say is. . . . The member talks about performance plans. On Monday, I tabled in this chamber a performance plan for B.C. Ferry Corporation. During estimates we will have the opportunity in this House to debate fully B.C. Ferry Corporation's plans for the coming fiscal year. Earlier this week, B.C. Ferry Corporation released its capital plan for the upcoming year. These are there; the plans are available for discussion and debate, and I'm sure we'll have a good debate on this.

But I am perplexed by some of these members standing up and saying: "No, you shouldn't deal with the costs of taking the B.C. Ferry debt off its books. You shouldn't provide them a dedicated source of revenue. You shouldn't work with them to make sure that they provide an ongoing high-quality operation for residents of coastal communities, for tourists and for businesses on Vancouver Island and throughout British Columbia."

If they want to stand up and vote against it, well, they certainly can. But this, I submit, is well received as an initiative by those who care about having B.C. Ferry Corporation viable, serving the economy and people of coastal British Columbia .

M. Coell: I just have to respond to that. What we're saying is that you shouldn't have to. You -- this government -- shouldn't have wasted the money.

If the members on the other side think that wasting a billion dollars makes the people of Vancouver Island happy, they're nuts. If they think it makes the people in Kamloops happy, they're nuts. This is the biggest boondoggle that this government has done in its last five years. You've got three ferries that don't do anything that are floating all over Vancouver harbour. You've wasted the money that could have been helpfully put into health care and education. Then you come back and say: "We'd like to write off the debt." There is no such thing as writing the debt off. We still have to pay for it.

This government should know that we're mad and the people of British Columbia are mad, because you have to do this. You have to write off debt, which means you have to pay it twice, because you mismanaged it the first time.


Hon. D. Miller: Just a brief question, because listening to some of the comments, I'm a bit disturbed. I just want to confirm with the minister the history generally since 1991 and what led to this decision by the Crown to forgive the debt. As I recollect, it was 1989-90 when the government of the day made a fundamental shift in policy and said for the first time to the B.C. Ferry Corporation: "You will now be responsible for servicing your own capital requirements." That was a fundamental shift in policy. Up to that point -- prior to that and since the creation of the B.C. Ferry Corporation under W.A.C. Bennett -- the Crown or the government had always paid for the capital requirements of B.C. Ferries. They had never been responsible for their own capital requirements up to that point. Any new vessels or new terminals that were built were paid for fully by the Crown. Now, in 19. . . .


Hon. D. Miller: I'm just trying to get a question answered. I'm not trying to be provocative.

Since that fundamental policy shift, the debt of the corporation has accumulated to the point that we're now writing off in excess of a billion dollars. To the best of my recollection, that debt consists of a number of factors, and it also is. . . . One should bear in mind that during that decade of the eighties, under the government of that time there was essentially not very much capital committed. There were no new vessels; there were none of the upgrades. In other words, a period of catch-up was required in the nineties.

The debt is a composition of the operating losses. The corporation has been losing money steadily since. . . . I forget the exact year it turned into the red. Those losses have been accumulating as debt. It's to pay for new vessels like the Spirit-class vessel and terminal upgrades -- significant upgrades at Tsawwassen, Swartz Bay, the new Duke Point terminal and others. All of those are part of this debt. Other new vessels that were built, the Skeena Queen. . . . Included in this, by the way, as my colleague, the minister responsible for Ferries said this morning -- not ducking any legitimate criticisms with respect to fast ferries. . . . But I suspect that fast ferries is not the major portion of this at all, and I'd be required. . . .

Finally, during that period as well, the government reduced the operating subsidy a number of times. I know that the official critic for Ferries knows what I'm talking about, because the fundamental problems that the Ferry Corporation has to deal with, it seems to me, are still very much there. As I recollect from my time as minister, what in effect is happening right now, at least in the southern Gulf Islands, is that there is about a $40 million to $45 million annual subsidy to maintain those services.

It's trying to come to grips with putting the corporation on a break-even basis, given the demand of consumers -- and the opposition, by the way -- that there never, ever be a tariff increase and, by the way, that there never, ever should be any change in the service levels. . . . We must maintain the service levels and never, ever change. That forces a situation that is,

[ Page 15457 ]

quite frankly, way beyond narrow ideological politics of any political party. But it has to do with the inherent problems of the corporation themselves. The members over there, some of them, I suspect. . . . The critic knows this and may be wanting to be a bit disingenuous with respect to the criticism right now.


Hon. D. Miller: I think I posed the question, Mr. Chairman.

First of all, the debt is made up of the items that I talked about, including the operating losses, the change in policy. Second and finally, I guess, having met personally with the stakeholders' committees that we established to advise the Crown on the operation of B.C. Ferries, one of the first things they wanted was a dedicated revenue stream to B.C. Ferries, based on the fact that it was an extension of the highway system.

I can say for a fact that the member for Saanich North and the Islands' constituents were first and foremost -- and he was, as well -- in supporting that. Now we have the spectre of various members of the Liberal caucus getting up and attacking what I know the member for Saanich North and the Islands -- and other members who represent coastal areas -- would like to see. I'm wondering why the opposition is so divided in their criticisms of this section of the bill.


Hon. P. Ramsey: You know, I thank you for your question. I can't explain why the Liberal opposition is so divided in their criticism of the bill. But perhaps there will be a speaker who will explain it.


The Chair: Order. Order, hon. members.

G. Farrell-Collins: I think the former minister of B.C. Ferries provided answers to questions that weren't asked. Perhaps they're questions that exist in his own mind, but he certainly didn't ask a question.

I do have some questions for the Minister of Finance surrounding the extinguishment of this of this debt, in reaction to some of the answers that were given by the former minister responsible. The minister said that in 1989 there was a policy change by the previous government to make the B.C. Ferry Corporation responsible for servicing its own capital expenditures. Was the NDP government aware of that when they assumed office in 1991?

Hon. P. Ramsey: The policy was in place. It was put in place in advance of the construction of the Spirit-class vessels.

G. Farrell-Collins: Would the government been aware then of that policy when they embarked upon their capital plan in the early 1990s?

Hon. P. Ramsey: Yes.

G. Farrell-Collins: Post-1996, after the election or just prior to the election. . . . Can the minister refresh my memory who was the minister responsible for B.C. Ferries in 1996, 1997, 1998, 1999? I'm not clear; perhaps he can remind me who it was.

Hon. P. Ramsey: You know, we can have lots of fun with this. The member knows full well. It was the member for North Coast.

G. Farrell-Collins: So let me just see. That would have been the member who was just up providing an answer to a question that hadn't been asked, the one who was explaining all the reasons why B.C. Ferry Corporation couldn't possibly have managed under the debt load that it was assuming because of those nasty Social Credit people back in 1989. Would that have been the same minister for North Coast who stood up in this House, year after year, in estimates for B.C. Ferries, when the member for Richmond Centre, as the critic for B.C. Ferries, questioned, probed, asked and demanded to find out from the minister whether or not the B.C. Ferries' capital construction project on the fast cat ferries could possibly be within its budget. Would that have been the same member for North Coast who was minister at that time?

Hon. D. Miller: I don't hesitate to say that I was the minister responsible. I'm not in a position to answer the question. I certainly do recall -- and I'll go and search the record, but perhaps the members opposite have it on their files -- where I started to make speeches, I think in '96, warning that the operation of the Ferry Corp was unsustainable unless we came to grips with the issues I talked about in my previous question. It was unsustainable, because you couldn't continue to provide the level of service with the current tariff levels and hope that over time you could run a break-even operation.

I suspect that is true today as well, and that any government -- and governments have ducked this for 30 years -- regardless of what their political stripe is, needs to seriously look at how you look at rationalizing both service levels and tariff levels so that there is a degree of, I would say, efficiency, but more practically of how you can make the kind of changes that provide and continue to provide service -- in other words, don't detract from service. But the issues do arise.


I'll give you one final example or one question that I'll pose to the minister, and that is with respect to Bowen Island. The Ferry Corp developed a plan that said that rather than run an empty large ferry continuously on that route from the peak traffic demands in the morning to the peak traffic demands in the evening. . . . Rather than continue to do that, in order to save money but continue to serve the people on the islands, it was proposed to run a passenger-only in the non-peak times to try to save some money, to try to reduce that operating cost. That was met with vociferous opposition from the people on the island, who said, in effect: "Don't you dare ever contemplate changing our service level. We want it."

It's true. You can now get to Saltspring Island three different ways. The question we were trying to put to the users of the Ferry Corp was: is that something that ought to be examined, in view of the operating position of B.C. Ferries, to see if we can't reduce those operating costs?

Those are all very legitimate issues and very legitimate questions. At every turn, when we asked those questions, we got from the stakeholders: "Don't touch our service." And

[ Page 15458 ]

quite frankly, we got from the opposition: "Don't do it, either." So if you want to have your cake and eat it too, and you're fooling yourself with respect to that, be my guest, but those are the facts.

G. Farrell-Collins: I'll come back to my questions for the current Minister of Finance. Despite the elucidation that was just offered by the member for North Coast, who, I think, at one point had something to do with the Ferry Corp. . . . He said that as early as 1996 he was aware -- and he was making speeches in the House -- that unless the government grappled with the ongoing accumulation of debt at the B.C. Ferry Corp, it was going to be unsustainable. Aside from reducing the operating subsidy. . . . Maybe I should ask that question. Can the minister tell me which member of the Legislature it was who, as the minister responsible for B.C. Ferry Corp, actually reduced the subsidy of the operating grant to B.C. Ferries and what years that took place? Can you recall that?

Hon. P. Ramsey: There were a number of incremental reductions over the years.

G. Farrell-Collins: I see. So we know now, because the former minister, the member for North Coast, has just given us the wonderful bit of wisdom, that as early as 1996 he was fully aware, as minister responsible, that the Ferry debt was approaching an unsustainable level. Yet the government previously had and continued to reduce the operating grant, and now the Minister of Finance, and more importantly and more ridiculously, I think, the member for North Coast, are standing up in the House and chastizing the opposition for raising the questions about how the government ever intended to service this debt. I find that shocking, if not simply ridiculous.

It seems to me that at that time too, in the 1996 to the year 2000-1999 time frame, there was a minister responsible for B.C. Ferries who stood up repeatedly and said that there was never going to be. . . . They weren't going to change the ferry fares; they were going to freeze them. They had gone as high as they could. In fact, they were never going to change the service levels. The service levels weren't going to be changed. I think that was the member from North Coast. If it wasn't, then he can. . . .


G. Farrell-Collins: Oh, he says it's not true. I seem to recall that, but perhaps I'm in error in this case. I'd love to hear from the minister responsible.

When the fast ferries were being constructed, and year after the year the minister -- I can't remember who it was -- was being informed that there was absolutely no way that they could be on budget. . . . Who was the minister at that time? What was B.C. Ferries doing at that time to try and grapple with that growing debt, to grapple with the problem of the operating subsidy? What was it that B.C. Ferries had been doing over the last number of years to try and head off the situation we're in now, where we've got $1.08 billion worth of taxpayers' dollars that are going to be funnelled into B.C. Ferries to bail it out?

Was the minister -- whoever it was who was responsible at that time -- asking probing questions about the B.C. Ferry Corporation? Did he ever wonder why the fast ferries were a year and half or two years past their due dates and just had to be over budget? I know there were lots of warnings going to the minister by the public and by members of the opposition and other people. Was the minister doing anything at that time to try and head off that huge, massive cost overrun? Was something happening there that the minister can advise us of? Or perhaps the member for North Coast can stand up and tell us how proud he is of the work he did in managing the fast ferry project.


Hon. P. Ramsey: This is a fascinating debate on a number of issues. But it is not a debate on whether or not this House wishes to extinguish debt of B.C. Ferries Corporation. There have been a variety of debates taking place. There have been investigations taking place into the fast ferries program, both internal to B.C. Ferries and external through the auditor general. Everybody has had a good chance to review those.

The minister responsible for Ferries and I have taken action to put Ferries on a firm footing for the future. This provision that we have in front of us is part of that. I do hope that it receives support from this House.

G. Farrell-Collins: First of all, I don't think that everybody has had an opportunity to review those reports. We saw the outrageous spectacle of the former Premier, the former minister responsible, the chief architect for the fast ferry proposal, appearing in court recently and saying that he still hasn't bothered to read it. From the comments from the member for North Coast, the former minister responsible for Ferries, it seems to me that he may have read it, but he certainly hasn't accepted it or internalized the fact that this government is responsible for a huge boondoggle in the order of hundreds of millions of dollars for a ferry that isn't fast, that won't work and is resulting in less service to the people of British Columbia. It is resulting in the people, the taxpayers, of this province having to pay that debt over the next 20 or 30 years.

It's a little hard to sit here and take it when the minister formerly responsible for Ferries, the member for North Coast, stands up and has the unmitigated gall to attack the opposition for his incompetence. He should come over here and apologize to the member for Richmond Centre for ignoring his advice year after year in this House. He should come over to this side of the House and apologize for not following up on those warnings that were made by the member from Richmond. He should apologize for the kind of derisive comments that he made in this House, in estimates, year after year when those warnings were raised.

The reason it's relevant to this section is because it's the same group of people that has just tabled two days ago, yesterday, another capital plan in the order of another $400 million and wants more money from the taxpayers of British Columbia. So you bet we're going to ask some questions.

When we see the kind of attitude displayed by the member for North Coast, who has the gall to stand up in this House and pretend he's proud about what they've done at B.C. Ferries in the decade that they've been responsible for them, it makes me think that they haven't learned their lesson. It makes me think that the government of British Columbia, the New Democratic Party of this province, doesn't have the slightest clue what they've done, doesn't have the slightest clue how they're going to fix it and, quite frankly, doesn't have the slightest clue how they're not going to end up in exactly the same position a year from now.

[ Page 15459 ]

We know that at some point in the next year, because of the law, this government is going to have to go to the polls, and they're going to ask people for another mandate, another five years. If we're supposed to sit here in this House and say, "It's okay to write off a billion dollars in debt. Some of it may have been spent wisely, but we sure know a significant chunk of it wasn't" -- with no questions asked. . . . When we see the kind of disgraceful attitude displayed by the member for North Coast, despite his years responsible as minister of B.C. Ferries, then it says to me that the government hasn't learned its lesson.

You bet I'm going to be voting against this provision, because I don't want to see another one of these 12 months from now, whether it's $200 million or $400 million or whatever it is. I don't believe for one second that this government has learned its lesson, not for one second. I'll be damned if we're going to stand up in this House and support this government's capital plan and support their $1 billion write-down to this debt.


D. Symons: Two members on the government side -- the Finance minister and the member for North Coast -- made comments about the '89 change that the Social Credit government made in the financing of capital projects for the fast ferries. Both indicated in the way they made their remarks that that was a bad decision on the part of the Social Credit government, and that's the cause of the debt of the Ferry Corporation. Certainly they went along in that vein in what they were saying.

I'm wondering, then, if this government has been in office since 1991, and they felt that that was not the right way for the capital program to be handled, why they didn't change it. They've had nine years in which they could have changed it if that was one of the faults. That's one of the reasons they stood up and said that it had something to do with the debt. They didn't change it.

We have had, over the last eight years, roughly -- not counting the last two years, where there has been a freeze on ferry fares -- a 60 percent increase in the tariff rates on ferries.

We've also had a reduction, as we said earlier, from roughly $40 million down to $4.7 million in the last year -- before they realized the real debt they were putting the Ferry Corporation into -- in subsidies to the Ferry Corporation. They kept reducing it. And, of course, as they reduced it, the debt of the corporation climbed even higher.

We had a lot of bad policies put in place by this government and followed along that have contributed to this mistake -- this huge amount of money. Now, they're saying: "Well, let's just move it off the books from here, and we'll put it on the books over there. It'll hide it from the fact that the Ferry Corporation was bankrupted by this government and just hide it in the $34 billion of debt that the province has." That's still debt. I'm wondering if the minister might tell me: when you're assuming that debt, then, what exactly will be the increase in the annual service charges of the provincial debt? How much is $1.08 billion going to cost per year in added debt to the provincial coffers?

Hon. P. Ramsey: The cost to the consolidated revenue fund for servicing this debt will be $60 million a year.

G. Farrell-Collins: I have a memo here that was sent by the treasurer of B.C. Ferries, Peter Mills, on December 17, 1998. I just want to read part of it into the record, so that we can understand just how bad things have been at B.C. Ferries and how long the government has known about it. This is dated December 17, 1998, and it says:

"As you know, B.C. Ferries' insolvent financial position has required, for the last two years, that the Minister of Finance provide a letter of commitment to our auditors to avoid a 'going concern' qualification in our corporate financial statements. In last year's letter, the Minister of Finance" -- that would have been the 1997 letter -- "stated that the corporation and the province would be working to put a financial framework in place to sustain the corporation. To that end, we have made three submissions to Treasury Board and cabinet since November 1997 seeking direction on this issue."

This is December 1998. B.C. Ferries has known about that problem for a number of years. In the previous two years, they'd received a letter -- they'd required a letter -- from the Minister of Finance to basically prop up the corporation to avoid a "going concern" reference in the financial statements. That's not insignificant. That's a fairly significant status point, or mile marker, along the road to bankruptcy.

The fact that the minister sits here and says that he knew even earlier, in 1996, that they were headed in that direction -- and at the end of 1998 there still isn't the slightest plan on how they're going to do it -- I would say indicates exactly how the government got into this position and exactly the kind of incompetence that has shown up year after year with this government and its management of a variety of Crown corporations. The best case study to date has been the B.C. Ferry Corporation.

Now we're in a situation where we're going to have to pay $60 million in taxes every year just to service that debt, while B.C. Ferries goes out and accrues another $400 million in its capital program. And as we heard earlier today, the Ferry Corporation isn't even really looking to deal with capacity increases. They're not projecting any sort of capacity increases over the next five years to speak of. This is just to manage the level of service we have right now. To deal with the type of service we have now, it's going to cost us another $400 million over the next five years to upgrade and to keep running the equipment we have in place presently. Essentially that's what it is. That's where we're at. After a decade of NDP management of this Crown corporation, that's where we sit, and the government has the gall to come in here, write off the debt and, the day previous, ask for another $400 million.


I would say that this has been a long time coming. I expect the government has had to work very hard to get it to this level of bankruptcy, but they've managed, over the last decade, to do that.

An Hon. Member: It was four decades.

G. Farrell-Collins: Well, the minister says four decades. It seems to me that when his government took office, the debt was about $60 million, and today we're writing down $1.08 billion. So again, he doesn't seem to get it. He doesn't understand it. This problem, he says, has been developing over four decades. This problem developed in the last nine years, as a result of this government's incompetence -- a great deal of it the responsibility of the member for North Coast.

He says: "Deny it, put your head in the sand." I would say that is exactly what his policy was, as the minister responsible for B.C. Ferries for the four years he managed it. He put

[ Page 15460 ]

his head in the sand, kept it there, wiggled it around a little bit and pretended that there was nothing happening at B.C. Ferries, while memos like this were crossing the desk of the treasurer of B.C. Ferries. That is the height of irresponsibility, the height of incompetence and the height of arrogance we've seen today -- when the minister stands up and tries to defend his behaviour and focus attention and blame on members of the opposition. In the nine years that I've been here, if ever there's been a member who doesn't get it, it's the member for North Coast.

An Hon. Member: Don't start your own business -- please.

The Chair: Order, members.

Hon. P. Ramsey: We have had some interesting discussion on the past and future of B.C. Ferries. I just want to reprise, yet again, the action that has been taken since February to make sure that B.C. Ferries has a viable future. Part of what we're dealing with here is exactly that.

First, we have very clearly taken action to wind up the failed experiment with aluminum catamarans. Those vessels are now on the market, and we have written down the cost of them on the books. It's necessary to do that. We have said that the attempt, over a decade, to ask B.C. Ferries to do its own capital and absorb any costs of it which do have an impact on operating expenses, as well, didn't work, and we need to have a dedicated revenue stream there. We have done that. And finally, we need to deal not only with the cost of building the fast cats -- and that is clearly part of this -- but other expenditures, going as far back as the Spirit-class ferries, which are still captured within the $1.08 billion.

The other things I would reference to the members, though, are some of the things we have in place. First, there is a performance plan, tabled in this House, to look ahead with B.C. Ferries. I'm sure that this will be a matter of much debate.

Second -- and I table this with some reluctance given the debate we've had to date, but I will -- after discussion with the minister responsible and looking at the capital plan approved by B.C. Ferries for the first year, I have a proposed amendment to the bill which I'll table and share with the members of the opposition.

G. Farrell-Collins: Mr. Chairman, the amendment landed on my desk about five seconds ago. I'd like an opportunity to read it.

The Chair: Thank you, hon. member -- point well taken. We will. . . .

G. Farrell-Collins: And if I may, I don't appreciate being ambushed like that at the last minute. But I'm glad to take some time to read it. We can perhaps have the committee rise, report progress and ask leave to sit again.

Hon. P. Ramsey: Just very briefly, I have no objection to the House adjourning at this point. As part of making sure that we have sound management of B.C. Ferries, we've reduced the debt cap. The amendment proposes the reduction in the debt cap for B.C. Ferries. . . .


The Chair: Hon. member, I haven't acknowledged you, so. . . .

We'll be able to come back to this tomorrow. We have a motion.

G. Farrell-Collins: I'm prepared to withdraw my motion momentarily while the minister explains the amendment, if that's what he'd like to do.

Hon. P. Ramsey: First of all, there was no intent to ambush. Actually, I thought this was an issue that might have arisen in debate considerably earlier, when we look at where we are going with B.C. Ferries and management of it. I've already referenced the performance plan. I've referenced the other measures that had been put in place.

We can talk more about measures that Treasury Board has, to work with all Crown corporations. One part of that is reduction in the legislated debt cap for B.C. Ferries through the period of the end of March 2002 to an amount not to exceed $150 million minus the proceeds from the sale during those fiscal years of any ferries owned by the corporation. We think that this is realistic, given the Ferries' capital plan. We think this is yet another step to moving forward to sound management of the corporation into the future.

[T. Stevenson in the chair.]

G. Farrell-Collins: Certainly at some point we were expecting to hear from the government exactly what its debt cap plans were, given that we certainly didn't want to have the government leave it at whatever it is. I think it's over a billion dollars now -- $1.3 billion. I'm not surprised to see that there's a change. We'll see how they live up to it. It seems to me that in every year that they've introduced the amendments to the debt cap, it only lasted for one year, and the next year they just increased it. So if the government is saying that they're planning on putting B.C. Ferries on a sound financial footing, it'll be interesting tomorrow or the next day -- whenever we deal with this -- to find out how it is that the government plans on going about its capital plan and servicing the debt that it intends to accumulate. So we'll eagerly await that explanation.

With that, I move the committee rise, report progress and ask leave to sit again.

Motion approved.

The House resumed; the Speaker in the chair.

The committee, having reported progress, was granted leave to sit again.

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

Hon. P. Ramsey: I move the House do now adjourn.

Motion approved.

The House adjourned at 5:59 p.m.

[ Page 15461 ]


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

The committee met at 2:43 p.m.


On vote 41: ministry operations, $36,744,000 (continued).

T. Nebbeling: This morning we talked about Galiano Island, and I talked specifically about a particular bylaw, an amendment to the OCP. I got the feeling that the minister was not aware that there was a bylaw in the making. It has actually now been approved, I believe, from Galiano. Has the minister got knowledge of this amendment bylaw, or is it all news to her?

Hon. C. McGregor: Yes, I'm well aware of the bylaw.

T. Nebbeling: It is this bylaw that is used to increase the buildable site per. . . . Let me see; it is a rather confusing formula. The people who bought the lands that we talked about before, the former MacMillan Bloedel lands, bought these parcels as 20-acre parcels and were entitled to build on these parcels. This amendment to the OCP gives the Islands Trust on Galiano the power to increase the minimum requirement to 50 acres -- 20 hectares instead of 20 acres.


Then, in order to get the rights to develop some of these lands, what an owner or group of owners has to do is take the 50 acres and give 30 acres of that 50 to a forest legacy program, and then the 20 acres that they keep can be subdivided into four parcels, I believe, allowing them four houses and four cottages. This is what the problem that we talked about earlier is all about, where the rights of citizens are really being undermined by being forced to give up such an enormous amount of land in order to build on these lands. It is seen as expropriation without compensation. Has the minister given this issue any attention, or has it just been approved by the ministry as the path to go for the trustees on Galiano?

Hon. C. McGregor: The decision to approve the bylaw was made by my predecessor in this portfolio. That's not to say, though, that I wasn't made intimately familiar with the issues. As the member points out, it is somewhat contentious on a number of individuals' parts. The ministry's role was to review the bylaw in the context of provincial interest. We did so. It was a difficult decision, but the decision was taken to support the local autonomy that is provided through the mandate that the Islands Trust has.

T. Nebbeling: What I hear in all these responses that I've been receiving today is that whatever happens on the islands, whatever the trustees do -- right, wrong, fair, honourable, dishonourable -- the minister says: "We just approve what they do. It is a decision by the other authority, and we are not going to argue with their decisions." Is that a fair summation of the position of the Ministry of Municipal Affairs, that they truly will not interfere in decisions that are made by elected officials of the Islands Trust?

Hon. C. McGregor: It is fair to characterize my remarks as respectful of the democratic processes that exist in the Islands Trust and other local governments. I will continue to do that within my role as Minister of Municipal Affairs. My staff will continue to review bylaws that we have the legislative authority to do within the context of what is in the provincial interest. When we make that determination, then we provide either approval or suggest different advice to a municipal government.

T. Nebbeling: Then in this particular case, as the minister has expressed concerns or understanding that this is a very sore issue and really to the detriment of people who bought land assuming that these lands could be used to their well-being. . . . Now suddenly they find out that they have to give up these lands in order to get a bare-minimum development going. Can the minister then tell me what kind of review went, in this particular instance, with this particular by-law amendment? The minister has expressed that she was aware that it was indeed quite a problematic situation.

Hon. C. McGregor: There were a number of agencies that were consulted, including the parks branch of the Ministry of Environment, the Ministry of Transportation and Highways and the B.C. Assets and Land Corporation. They concluded that there were no significant outstanding concerns related to the provincial interest.

However, having said that, I recognize -- as did the previous minister -- that there were significant concerns by some members of the community, despite having gone through a democratic process and having that bylaw considered by duly elected individuals in their role as Islands Trust trustees. The previous minister expressed his concern in his letter to the trustees, regarding the requirement to donate 75 percent of their forest-zoned lands to a private society. He encouraged them to continue to work together with representatives of the community to try and reach consensus about any rezoning proposals.


T. Nebbeling: Can the minister then give me the decision of the provincial government as far as expropriation without compensation goes?

Hon. C. McGregor: I think I've made it clear that there is a duly elected local authority in place here. They have the legislative ability to make these rules. They follow the democratic process. We reviewed the application for provincial interest, and on the basis of that process we approved the bylaw.

T. Nebbeling: I didn't ask about the Islands Trust position, as we know that they believe very much in expropriation without compensation. For that reason, I think they're in trouble. However, I'm asking the minister for the provincial government's position on expropriation without representation, which is either like the Islands Trust's or different. That's what I'd like to hear.

Hon. C. McGregor: I believe I've answered the member's question.

T. Nebbeling: Clearly the minister is not willing to answer a very democratic question which is very pertinent to

[ Page 15462 ]

the situation. I don't mind the minister making statements about her commitment -- to other forms of government -- not to interfere. I understand that. However, if provincial principles are being undermined or deviated from, such as with the action taken by the trustees on Galiano. . . . If indeed the minister, although she doesn't answer the question. . . .

If the provincial government believes that expropriation without compensation is not the way to go. . . . There have been other instances where the thought of compensation for expropriation became debatable, but at least there was always compensation offered in expropriation cases. It may not have been to the satisfaction of the people who were compensated, but that is neither here nor there.

My point is that if the minister is not willing to say that there is a different position within the ministry about expropriation without compensation than we see on Galiano, then I think it would be advisable for the minister to say so. Otherwise, it can only be concluded that the minister concurs with what happened on that island. That would, in my opinion, be a black mark for the Minister of Municipal Affairs and, for that matter, for the whole provincial government.

We do not take from people what is rightfully theirs without taking the financial or other consequences that go with that. That is not happening here, and I think that's a shame. Having said that, I might as well go on, because I'm not going to get any further on this issue. The minister has made clear her position.

There are other islands where we have had problem zoning issues where trustees were supposed to take bylaws to the local communities, discuss matters and then, after public presentations, would in the final reading actually deal with issues that were not even in the proposed bylaw. I am talking about an instance on Bowen Island. That was bylaw 161. Is the minister aware of what bylaw 161 pertains to?

Hon. C. McGregor: No. The member is going to have to give us a brief description and then we'll be able to discuss it.

T. Nebbeling: This is a test to see if I know what it was all about.

What happened on Bowen Island last year was that the bylaw was introduced to deal with a marine type of operation in Snug Cove. This was bylaw 161. It had a public presentation that included permitted uses. The bylaw was presented to the community; there was little concern expressed.

Then when the bylaw came back for third reading, the community was not really made aware that there had been any changes made to the bylaw. It was by coincidence that somebody saw the new version of what was going to be approved by the trustees -- without further consultation of the public, mind you. Suddenly, part of the permitted uses in that bylaw included a pub-restaurant operation. This land that was up for rezoning is right at the bottom of Snug Cove, in or right below the residential area, and of course it created enormous turmoil.


The community went to the trust to say, "You can't do this," and the trust categorically rejected any opposition; they were going to pursue this one.

So I've given you some more background. Is the minister or her staff aware of this particular zoning conflict that happened on Bowen Island four months ago?

Hon. C. McGregor: I'm afraid the staff that are here are not familiar with this question. We'll have to do a little investigation to see if there were staff people involved in a consultation with Bowen Island over this bylaw. I can only say broadly that the same kind of process, in terms of ministry review and review for provincial interest, would happen prior to signing off on that bylaw. But if there were a debate around particular components of it, and if we had any involvement in that, I'm not aware of that. We'll have to get back to the member on that.

T. Nebbeling: This is interesting. I understand that staff can't be aware of all cases. However, staff were involved; Mr. Trimmer and Mrs. Knighton were involved. Being aware or alerted by the community of what was going on here, I talked to the trustees. I explained to them that if you make changes between readings after a public hearing, you have to call that bylaw back to the community if these changes are of substantial impact.

I didn't get much there. Then I spoke to Mr. Trimmer and Mrs. Knighton. It was really interesting to hear the minister's defence, from time to time today, on the interference with trustees and how opposed the minister really is to that principle. The minister didn't say it, but this is what staff told me, so there must be a script somewhere.

The Islands Trust legislation is designed to give the local governments a high degree of independence and autonomy. It is their responsibility to ensure that their decisions and procedures conform to both principle and good practices and to all legal requirements.

The staff gave me the full definition of what the minister talked about this morning a number of times. Here is a clear violation of the Municipal Act and, I believe, of the Islands Trust as well, because when it comes to rezoning bylaws, I cannot believe that what is required under the Municipal Act would not apply to the Islands Trust. In spite of its being blatantly different in regards to how the zoning amendment bylaw was advertised, the first zoning amendment bylaw as advertised showed the same land with uses that were different from the second set that was advertised after and prior to adoption of these bylaws.

For about a week we had this going backwards and forwards, through to the Chair to the minister, exactly as I'm having with you, Madam Minister. And there was just a categorical rejection of any consideration of a legal point made by the people. Only, I think, because of the persistence of the people who wouldn't give up and the threat of going to court. . . . At 8 o'clock one Thursday night last year the trustees were going to get together and approve this bylaw. At 6 o'clock in the afternoon the meeting was cancelled. That's how far people had to go. The bylaw did not get approved and got deferred until the new municipal council was going to be elected -- which was what people had asked for in the first place.


What I'm trying to illustrate here is that there is an ability within Municipal Affairs to be flexible when there is a blatant violation of democratic, moral or legal principles. I use this particular one as an illustration that there can be that flexibility. It is something that nobody likes to do; nobody wants to undermine other forms of government.

But if something is wrong and is driven as an issue by the wrong motivations, then I think it is incumbent on the minis-

[ Page 15463 ]

ter to act. Not having done that is a big failure of this ministry for the people on Galiano Island. Bowen Island is saved, and the new council is dealing with that issue. There will not be a pub in that place because during the public hearing, the community came out. That that was not what they wanted. But it was a community decision, not two trustees trying to push it through for whatever reason. I had to use this one as an illustration.

I have a number of other. . . . Or maybe the minister wants to respond to this one first.

Hon. C. McGregor: I hope I at no time indicated to the member that I was in defence of staff not doing appropriate work if that work needs to be done. It has been my experience that the staff within the ministry do a very good job of reviewing these matters with the appropriate municipal officials to make sure all of the tools they need to use from the Municipal Act are followed and that they meet all of the legal requirements in place before a bylaw is passed. However, I appreciate what the member has offered as perhaps an error on our part, and we will take this opportunity to review that matter to make sure that it was handled appropriately.

However, I would take issue with one thing the member said, and that's that we should examine local government's motivation around the passage of a bylaw, and we should consider that in our review. We do not consider the motivation of any locally elected government in making a decision. There may be times when I'll think on a personal level that people are making a big mistake. But as long as they have complied with the act, as long as these are duly elected officials who are making the decisions that they are empowered to do and as long as it does not conflict with the provincial interest, I will take the view that they have the right to do so. It is not based on whether or not I agree with the decision or the member opposite agrees with the decision that a locally elected official might make, but rather that we should give them the respect and the autonomy that they have the right to exercise.

T. Nebbeling: I'm not going to go back to that issue, because like I say, I've got a number of other examples that would just illustrate how serious the problem really is when inflexibility becomes the norm.

I don't think I said the motivation of trustees; I think I said the moral motivation. That is, the legal motivation and the moral motivation should be part of. . . . If it becomes a very prevalent thing in the whole issue, then I think that has to be looked at as well -- what drives these people. And if certain values that the provincial government's interest represents are not covered by some of these values, then I think it is a moment for the minister to stand up.

I don't need a definition, but when I talk about provincial interest, I really mean the people of this province. I don't talk about this elected government and the bureaucracy. I talk about the people of this government, and that means the people who bought on Galiano, in good faith, a piece of land on Galiano that was over to the trust, and the trust refused to purchase. Then through manipulation -- and I dare say that -- it still got much of that land at the cost of these people who bought. I think that is a morally sick approach to how to govern the well-being and the good of the province, because it is the people of British Columbia. We will have a difference on this one, and I regret that it is that way.


We quickly went through the municipal incorporation of Bowen Island -- a long, frustrating process. I think I can sum it up by saying that everybody did their best to make it happen. It might have been able to go a bit faster if at the right time the right people had pushed a bit harder, but at the end of the day, I think Bowen Island is pleased that it is incorporated. It seems to be working very well.

There is one problem, and that was identified prior to the incorporation. That was the insistence of the Minister of Municipal Affairs on a double-direct voting system. Is the minister aware of double-direct?

Hon. C. McGregor: Yes, I am familiar with the double-direct voting system.

T. Nebbeling: Does the minister see any problem with the system?

The Chair: Before I get the minister to answer, in committee, questions to the minister should be relevant to the administrative aspect of the minister's office. I've been listening to the debate today, and it becomes increasingly difficult to determine the minister's personal opinion on some of these issues. I caution the two members -- the member and the minister -- around how this fits the administrative capacity of the office.

T. Nebbeling: I'd like to assure the minister that at no point during our debate has any question not been directed toward her in her capacity of Minister of Municipal Affairs. I hope the Chair will pick up that message as well. I think it's a very unfair statement.

The Chair: Member, take your seat, please. Member for West Vancouver-Garibaldi, a direction from the Chair is not debatable, if the member would understand that. The Chair is here to preside over the debates and offer direction under the standing orders. That's the Chair's role.

T. Nebbeling: I did not debate; I made a statement about my address to the minister. I will not accept a statement by the Chair that I did anything different.

The Chair: Member, you'll have to pursue a different line of questioning, then. The member for West Vancouver-Garibaldi on vote 41.

T. Nebbeling: On vote 41, can the minister explain to me why there is a need on an island such as Bowen, where there is a municipal council that handles the matters of all affairs pertaining to what happens on the island, to have at the same time two other individuals appointed who are not part of the council and who do not have any legal responsibility to work with the council to do the deeds of the Islands Trust? Where is the wisdom of that kind of approach?

Hon. C. McGregor: As I understand it, this is the first incorporation in the islands, so it creates new challenges for us in terms of how we move from what was traditionally the way of governance through regional districts and the Islands Trust to a model that also includes incorporated municipalities. These are the very questions, in fact, that the study identified -- that Diana Butler reviewed in her report. These are the very questions that we will have to address as a part of review of

[ Page 15464 ]

the governance structure to see if it might be a different system that would be more effective as a result of taking decisions to incorporate some islands.

T. Nebbeling: As I stated earlier, we have seen a lengthy process in establishing the conditions under which the Bowen Island municipality was created. There was a period last year -- March or June -- where the restructuring committee clearly created a list of reasons why the double-direct was, in their opinion, anti-democratic. Of course, now you had two competing jurisdictions fighting with each other over the same pie. Furthermore, there were some solutions given to the people who were writing the patents and the policies that would come with the creation or the incorporation of Bowen.


Can the minister give me a reason why the suggestions, including the one where the trustees' representation would be one from the elected council and then one independently elected by the electorate. . . ? So there's a balance at least. More important, the municipality had a council member on the Islands Trust who was fully aware of all the discussions going on within the trust on issues that Bowen is obviously interested in, being a member of the trust, thereby not having to rely on the goodwill of trustees who may or may not want to share what goes on in the trust. Some of the information that is discussed in the trust is confidential; the minister is aware of that. That has been cut off. I would like to hear from the minister if there is any opportunity to deal with that issue, considering that the relationship as it is now is based on a three-year period.

Hon. C. McGregor: I would agree with the member. I think what he's describing as an alternative model that might be used in this circumstance should be legitimately considered, and we should consider it as a part of the governance review. I think the short answer to why it wasn't is that there was likely a view that it was premature to act in a new structure when we hadn't had the appropriate opportunity to totally review the structures and consider these issues, as well as others, that may come up as a result of the governance review. But I certainly think that we should take into account the views of the incorporation committee. All of the reasoning they used -- the model that the member just described to me -- makes complete sense, and I'd like to make sure that we consider that model when we're doing the governance review.

T. Nebbeling: Well, I'm pleased to hear that the minister thought it was a good solution, because I created it, and the parties all agreed to it. I think, as a critic, that you can also make a contribution if the minds are open. I haven't often experienced that, but in this particular instance, to hear that there is some understanding of that is good. The reason I brought this up is not to press another point but more to forewarn the minister, when she gets involved with the incorporation of Saltspring, that here is a hurdle that you may not have to overcome.

One more question, then, on that subject: how is it going to work for the municipality of Bowen Island when the Islands Trust makes decisions that have financial consequences for the members? And how is the relationship, as it exists today, going to guarantee that when these decisions are made, the Bowen council, which now truly represents the people that may not be from a trust perspective but are the elected body that represents the Bowen Islanders. . . ? How are they going to be part of the process to assure that whatever financial consequences will have to be carried by Bowen because of decisions made by the trustees on the Islands Trust. . . ? How are they going to work together?

Today, like I say, there's maybe a voluntary relationship of informing each other of what's going on, but there's no assurance that this is going on. It really is of concern today on Bowen. Can the minister give me a feel of how she can address that issue of what I think has to be done?


Hon. C. McGregor: The Islands Trust mandate is to do land use planning. As I understand it, the agreement between Bowen Island and the Islands Trust is that the Islands Trust no longer does the land use planning for Bowen Island, because they now take on those responsibilities themselves.

T. Nebbeling: The minister should be aware that the Islands Trust does still receive from Bowen -- for three years -- a considerable amount of money. That money is based on cost for the trust. There are situations where the trust can make arrangements that have consequences to the island with other parties. That will be there for at least another three years. I think that without coming up with examples and without going into future legislation, because I think there is a problem there as well. . . . I will bring that up during the introduction of that legislation.

We have to be aware that there is that trap again, because of the relationship between the trust and the Bowen Island council. That's why I didn't come up with particular issues, but I wanted to make sure that that is a concern I've heard on the island and that I've certainly shared with people.

Hon. C. McGregor: I understand the member's concern, and I understand, as well, that the governance study is going to look at that very question to try and resolve it before the end of the three years.

P. Nettleton: I have a specific question of a regional nature. I understand the minister is at somewhat of a disadvantage, in that it's not a general question of a general nature. But if she will bear with me, I'll try to give her some sense of what the concern of the regional district of Bulkley-Nechako is. Specifically, I have a memo from the treasurer, Mr. Donald Jacquest, which is dated May 3, 2000. He details how, after announcing a 50 percent grant of $150,995 for the upgrade of the Fort Fraser sewer system, on April 30, 1999, the regional district discovered that the Ministry of Municipal Affairs would only accept claims for completion of the project after April 1, 2000, and were not obligated to pay the grant until March of 2002.


He points out that, with reference to the format of the letter, it is clear that the ministry was proposing to pay for some projects with respect to other areas in the year 2000-2001 and others, like the one in question here, in the year 2001-2002. In fact, some that appeared were to be paid out in 2002 and 2003.

He makes reference to the Ministry of Municipal Affairs letter of April 30 announcing a 50 percent grant toward the project costs. He goes on to say that after learning the details,

[ Page 15465 ]

the regional district realized that the ministry's share was in fact less than that, because in fact the regional district would have to absorb additional interest costs for financing their half of the project, which were not included, unfortunately, in the original cost estimate.

He goes on to state that depending on when the ministry pays the regional district, April 2001 to March 2002, this additional cost could amount to anywhere from $5,500 to $16,000, making the actual grant, speaking in percentage terms, only 47 to 49 percent of the total project cost.

He goes on to state that this does not sound significant, but when this extra cost, which could be as much as the treasurer indicated in his memo to me, could be somewhere in the range of $16,000. This is funded -- and I think this is what puts things in context -- by roughly 160 homes in Fort Fraser who use the sewer system. So that breaks down to roughly $100 per home -- somewhere in that range -- which a significant amount to the folks in that area. It's rather a depressed area in terms of the economy of Fort Fraser. I don't know if the minister has been through Fort Fraser or by it. You have? So you know what I'm talking about.

The board of the regional district debated whether they should accept these terms. But he goes on to say that beggars can't be choosers. That was their sense, so that's how they responded to the terms that were set before them. Therefore with some reluctance they signed the grant contract.

He goes on to say that in fact, though, a letter was drafted to the Ministry of Municipal Affairs asking if they could promise that the grant would be paid in April of 2001 rather than March of 2002, for the reasons that the treasurer referred to in his memo to myself, which would in fact save them a year's interest or thereabouts.

It goes on to point out that a number of municipalities have concerns about this problem. Again, my concern as a representative of Prince George-Omineca, Fort Fraser falling as it does within Prince George-Omineca, is to bring to the minister's attention this difficulty in which the regional district finds itself and the residents of Fort Fraser.

Hon. C. McGregor: I appreciate the detail that the member gave me in regard to this issue, because it does help to know exactly what the issues are. It makes my answer, I hope -- a little bit -- have the right kind of information for you. It is true that we have to create a schedule of payment that will enable us to stay within our annual appropriation. So when we give grants to municipal governments, we try to make very clear that there is a payment schedule and that grants flow on certain dates and certain years, so that communities have as much information as possible about how to finance these questions. We understand that it does have financial implications for the body that is engaged in a major infrastructure project.


Having said that, I understand from my staff that we didn't do a very good job in the first year of announcements around making that information available to municipalities or regional districts at the same time as the grants were announced. We're going to correct that in this round of announcements to make sure that people do have the full and complete information at the time which grants are announced.

Having said that, though, the member raises the issue of potential completion by 2001. What we will do is endeavour to give you. . . . I'll give you my commitment that if we possibly can, we will move up that payment schedule, as long as the project is completed. It will depend, in large part, on our appropriation and how close we are to being able to manage that. Usually there's at least a little room on an annual basis to accommodate those kinds of projects that have an earlier completion date than originally scheduled. We'll do our best to meet that request.

P. Nettleton: I am encouraged by what was almost a commitment from the minister. But if the minister will permit me, I would like to press her for more of a commitment, if I can. I understand that there are limitations with respect to the appropriations. But in light of some of the difficulties to which the minister has referred with respect to difficulties in and around similar grants, I would ask that -- particularly in light of the circumstances with respect to not only the regional district but Fort Fraser -- the minister give the residents of Fraser Lake a commitment here and now with respect to the payment of these moneys. We're almost there, but I think that if. . . . It would certainly be good news for myself and the residents of Fraser Lake, and I would certainly be quite prepared to convey in very non-political, non-partisan terms the minister's willingness to make this kind of commitment.

Hon. C. McGregor: I do give the member my commitment to work as hard as possible to try and achieve that outcome, but that is in fact the best that I can offer the member. I hope he understands that I can't make a commitment for next year's appropriation at this time. It wouldn't be appropriate for me to do so.

P. Nettleton: With respect to the almost-commitment, in terms of a time line, when is it likely that the regional district and the residents of Fort Fraser are likely to know where they're at with respect to a time line with reference to these moneys?

Hon. C. McGregor: We will actually be starting to do our calculations on next year's budget as soon as this July. So in that time period perhaps the member could contact us again, and we might be able to give a better indication -- a more solid indication -- of whether or not that can be accommodated.

T. Nebbeling: I would now like to go to B.C. Assessment Authority.

Hon. C. McGregor: Okay.

T. Nebbeling: Do you need somebody?

Hon. C. McGregor: Yes. One minute.


T. Nebbeling: Good.

During the introductory words, I gave an indication to the minister that I think well of the B.C. Assessment Authority. I say that also in front of the people that work with the Authority. I think it is important that when we criticize, we are heard; but when we have something good to say, that should also be noticed and should be heard too.

I have a couple of general questions, and then we can go after some general questions for awhile on the Assessment

[ Page 15466 ]

Appeal Board, on which I have some questions as well -- with hopefully simple answers so we will not have to spend too much time on this particular issue.

The first question I'd really like to get answered is about the act in 1998, the new Assessment Act. When was that actually incorporated into the operation of the Assessment Authority? Was it in the beginning of the year, or was it at the end of the year? What I'm really trying to establish is how long it has been worked with as of today.

Hon. C. McGregor: The changes to the 1998 act were in regard to the appeal provisions, and they were implemented in 1999 for the 1999 assessment year.

T. Nebbeling: That is '99-2000. Or is your year different? Is the year from October to October, or is the year from March to March?

Hon. C. McGregor: We deal in the calendar year.

[P. Nettleton in the chair.]

T. Nebbeling: Considering, then, that that act has only been in operation for a fairly short year, the act introduced in '98 replaced which act? When was that act put into operation? What I'm trying to determine is if there was an act that was replaced in 1998 or amended in 1998 that had been in operation for, say, a five-year period, a ten-year period -- or shorter or even longer -- and that it merited the 1998 revisions. That's the question.

Hon. C. McGregor: The act has been in place since approximately 1974, and the amendments were designed to deal specifically with issues related to backlog appeal.

T. Nebbeling: I would like to ask the minister: with this new review of the act, which areas are going to be targeted, and what are the reasons? Are there specific issues that need special attention in order to justify maybe another set of amendments to the act? Or is this just an ongoing review that takes place all the time to make sure that the act is in compliance with what reality is and what's happening in British Columbia?

Hon. C. McGregor: I am given to understand that the Assessment Authority's performance plan makes reference to a review of those appeal provisions to make sure they are working as we intended them to. That is part of the ongoing work of the Assessment Authority.

The reports I've had to date actually indicate that we've done a pretty darn good job of clearing up the substantial backlog there was and on the questions of training, appeal personnel and having the appropriate personnel in place in order to do justice to the issues that are before it.


T. Nebbeling: The review is then focused on the changes that were made in 1998 and not anything else pertaining to the act. The reason I'm asking this is. . . . Is that the reason that the study is actually presented as a joint review? The word "joint" is in the description of this review of the act. Is joint based on the fact that this also applies to the appeal board? Are they partners in this review? What is the reason for the term joint in the title?

Hon. C. McGregor: It is joint because it includes ourselves -- Municipal Affairs -- as well as the B.C. Assessment Authority and the appeal board.

T. Nebbeling: Okay, I'm not going to go there. I had a feeling that it was going to go in that direction.

When I looked at the attachment that we were provided during the briefing, the business plan for the year 2000-2004, there are some comments in there. I'm going to ask questions on some of them. One of them that came to the forefront was that in the expectations of government, there is a requirement for the B.C. Assessment Authority to provide funding for other ministries. Can you extrapolate on that one -- or for other Crown corporations or other ministry activities?

Hon. C. McGregor: I think what the member is making reference to is the fact that the Assessment Authority is given the right to collect certain levies as a part of its overall assessment. Those funds are remitted to our ministry in order that we can pay for the operation of the appeal board.

T. Nebbeling: In the past the assessment authorities have received funding from other bodies to support their operation. One of the groups that has been financially supporting you in cash and in other forms is the real estate organizations. Are there other organizations that you actually get funding from even today? And are there other government agencies beside the Ministry of Municipal Affairs that receive any funding from B.C. Assessment Authority?

Hon. C. McGregor: Largely, the B.C. Assessment Authority is funded out of the property tax system, but there are some other sources of revenue. The member opposite has made reference to the B.C. Real Estate Association which they have a contract with. I'm informed that there are likely a number of other contracts. If the member is interested, we will get him a list of those.

T. Nebbeling: I would really appreciate that. It's always good to know who are the people with the finances behind a government agency. I was aware of the real estate group.

Although I certainly have more questions specifically on the authority and the appeals board, I want to go a little bit sideways and deal with an issue that you most likely are very much aware of, Madam Minister, through the Chair. That is the concern recently expressed by the Real Estate Association about the fact that they truly have been shortchanged as far as the use of the information of B.C. Assessment Authority since that information has been handed over to the private sector -- the online system.


Of course the main concern is that the B.C. real estate industry no longer has 24-hours-per-day, seven-days-per-week access to the information it truly needs to make sure that whenever it signs a real estate deal, they are covered by having the right data about ownership and whatever a realtor needs to know about the property. They have lost that ability. It is an extremely serious concern. I would like to see what the minister has done so far in addressing the issue with the online operators.

Hon. C. McGregor: The member is correct in knowing that I had an understanding of this question. I did meet with

[ Page 15467 ]

representatives of the B.C. Real Estate Association as I'm sure the member opposite did as well. I understand what their concerns are. I encouraged them to meet with the privacy commissioner, because as they understood from the meeting with me, it was largely an issue that the privacy commissioner had made a ruling on. I'm not in a position to overrule the decision of the privacy commissioner, nor was I prepared to do so. So I said to them at that time: "You should talk directly with the privacy commissioner." They did indeed have that conversation with the privacy commissioner.

I have a copy of the correspondence to the president of the Real Estate Association, dated May 1. It indicates that the information and privacy commissioner's office may be receptive to a system whereby assessment roll personal information could be accessed by agents on an as-needed, case-by-case basis, with owner consent, for property ownership verification. He goes on to say that he's unable to commit at this time, but that if they would make a specific proposal to him, he would be prepared to consider it. I take that as a willingness on the part of the privacy commissioner to consider some of the issues that were raised with him. I understand that that dialogue will continue.

T. Nebbeling: That's, then, a second issue. The privacy commissioner has, for whatever reason, declared that private information is not available to other parties if the private information is in the possession of government or an agent of the government. I made up that definition myself, but it sounds as if that is the case.

Does this also mean, then, that at this stage, at least, the real estate industry has no access to that information -- not even from nine to five, on Monday to Friday, as I was told three weeks ago they have?

Hon. C. McGregor: As I understand the issue, they currently have a contract with the B.C. Assessment Authority that doesn't expire until the end of December 2000. So it's not an issue as of now, but it is an issue of effective January 1, 2001. There will remain access through the B.C. OnLine system, but the Real Estate Association is not satisfied with that access. That's why they're engaging in this conversation with the privacy commissioner to see if there's another alternative.


T. Nebbeling: That still makes it two issues. Up till today, if the system is still in place -- and I'm sure the privacy commissioner is aware of this -- seven days a week, 24 hours a day, a real estate operation has access to the data that is provided by the B.C. Assessment Authority. For that the industry pays $400,000 a year, plus they use a lot of computer time to fill data into your system as well. I believe that's how it works. Today the privacy commissioner is saying that that's okay; they have not been told not to provide the information.

Now, is the privacy commissioner saying at the moment this on-line information goes through a private operation, "Shut it off altogether," or is he allowing it from 9 till 5 during working hours, Monday to Friday, and not on the weekends? I don't understand. Are the realtors in the process or in danger of losing that tool altogether because of the privacy commissioner's decision in the first place? They might be negotiating, but why was that change made?

Will that right of the real estate industry to have that data available -- for very good reasons, I think -- be taken away from the realtors under the new conditions when the private sector controls that material? Is the privacy commissioner concerned? I haven't seen the ruling, but I think I should look into it. It is a privacy concern when the private sector has this material and distributes it, but it is a different thing when the Assessment Authority, as a government, distributes it.

This is very unusual. There's a different twist on the matter than even the realtors who I've met with have addressed to me. I think that what you've just told me now is much more serious. The problems that can arise from not having that data at a snap can be really costly, not just for the realtors but also for people who own property -- or who don't own property but pretend to own property and try to sell it.

Hon. C. McGregor: The matter is somewhat complex, in that the privacy commissioner made a decision that the information had privacy rights attached to it and that the Real Estate Association should not have access to the personal names attached to the properties. That's my understanding, broadly, of his ruling.

There was an existing contract in place with the B.C. Assessment Authority and the B.C. Real Estate Association. That contract is being honoured. Despite the fact that the privacy commissioner does not support the access to the private information that is currently being provided through the B.C. Assessment Authority rolls, that has continued. But it will expire at the end of December.

What we had talked to the Real Estate Association about was the kind of access that they could continue to have without the private information attached and their access through the B.C. OnLine system. It is my understanding that they are not satisfied with that to address their issues and concerns, which is why I encouraged them to meet with the privacy commissioner to determine if there was another possibility on this question.

In the letter from the privacy commissioner that I just read into the record for the member, he goes on to say: "I also confirm that we continue not to support bulk disclosure of such data to the B.C. Real Estate Association by the B.C. Assessment Authority."

T. Nebbeling: This whole debate on the redistribution of information that is within government's data. . . . Was the debate on that issue initiated, by the privacy commissioner or was this a consequence of another initiative that led the privacy commissioner to jump in? That's my first question.


While you're at it, are you saying, then, that today the privacy commissioner does not agree with the redistribution of that information to the realtors, but that the ministry has decided to overrule the decision made by the privacy commissioner and that you will honour your contract until such time as it is no longer part of the B.C. Assessment Authority's jurisdiction to share data with the real estate community and it becomes part of the private enterprise on-line operation -- and it is charged a fee for getting that information?

Did I make myself clear, Mr. Chair?

Hon. C. McGregor: There were a number of issues that arose that led to the privacy commissioner making this ruling. One of them was that in 1998 the city of Victoria made a decision to publish their assessment rolls on the Internet. That

[ Page 15468 ]

came to the attention of the privacy commissioner. He launched an investigation, and a report was written. That report is publicly available through his office. A number of his recommendations flowed from that decision.

At the same time in 1998, we consulted with the privacy commissioner around the changes we were proposing to the Assessment Act. At that time, there were provisions in the act that permitted the continuation of the contract with the B.C. Real Estate Association. So certainly it's not our intention, nor would we suggest it's appropriate, to overrule the privacy commissioner.

T. Nebbeling: Now I understand why the privacy commissioner got involved in this whole issue. But still, at the same time as he has made his ruling that this broad distribution of names is not permitted, it is going on. Did the privacy commissioner give it to you in writing or indicate to you that he would not act or would not expect any compliance with his ruling until such time as the contract between the Ministry of Municipal Affairs and the Real Estate Association is finalized or has come to its end?

Hon. C. McGregor: There's been a variety of correspondence between the privacy commissioner and the B.C. Assessment Authority on this question. If the member wants to know more about the mandate of the privacy commissioner. . . . I'm starting to feel a bit uncomfortable, because it is not something that I'm responsible for. I'm just trying to reflect the reasoning behind which. . . . I think the member legitimately asks: "How did we get to this place?" But I don't want to explore further the responsibilities of the privacy commissioner or the act that he's responsible for.


T. Nebbeling: I totally agree with the minister. I do not want to indicate or give any impression that I expect you to give me any thought process that the privacy commissioner may have. My point is that he has made some conclusions about the distribution of both names, and at this time, it is still going on.

I'm asking: has the ministry, not the privacy commissioner. . . ? Has the ministry an arrangement with the privacy commissioner that allows the ministry to allow the B.C. Assessment Authority to continue to distribute the names -- as they do today, I believe? And if that arrangement is in place, is that time-limited by the length of the contract that the ministry has?

So the contract it has with the Real Estate Association, not with the commission, is totally ministry-driven. It's totally ministry-driven -- it's actioned by the ministry, and it's what the ministry has in place today as a tool to continue to provide information that may be in contradiction with the desire of the privacy commissioner. I want to see how that tool is created.

Hon. C. McGregor: I want to be clear that it is a contract between the B.C. Assessment Authority and the B.C. Real Estate Association. It's not a contract with this ministry; it is not. . . .


Hon. C. McGregor: Okay, good. But Bill 21, in 1998, specifically authorized the continuation of the agreement to the end of 2000.

T. Nebbeling: Again I think we are at a dead end, because either I'm not clear on what I'm asking, or the minister can't give me the answer. I want to know why the contract that the B.C. Assessment Authority has in place today with the B.C. Real Estate Association. . . . How can that be acted on, if the privacy commissioner has said: "No, you can't do that"? There must be some understanding, some agreement, between the B.C. Assessment Authority then -- although I still think that the ministry's responsible for that, so I think I can talk that way. . . . But there must be something in place that gives the minister or the B.C. Assessment Authority comfort to continue to distribute these names in bulk form, in spite of what the privacy commissioner has stated as his objections to that program or to that process. I've tried to find out what is there to give the assurance that you can at least bring it to the end of the contract without feeling that you're overruling the privacy commissioner.

Hon. C. McGregor: Again, it was through specific consultations with the privacy commissioner that he came to agree that a contract is a contract, and he accepted the fact that it would continue until the end of the year, despite it not being consistent with his wishes.


T. Nebbeling: So we have a serious problem come December or November, when the end of the contract is there. I cannot see how a realtor, for example, can close a deal or a provisional deal and take a down payment from a person and then find out the next day that the person who signed the contract really is not the owner. That makes for all kinds of complications. The other thing is, of course, that the owner of a property -- or the perceived owner of a property -- could go out and try to sell the property three times in a given week, and take the deposit three times.

I think the link with the B.C. Assessment Authority and the availability of the names of the owners was almost an assurance that you were dealing with the right people, so if somebody was trying to pull a fast one, you could catch him. This is also for the protection of the person who is trying to buy, because sometimes these cheques are on the order of from $10 to $50 to $100 to $500,000 that have to be given with the signing of the papers. You basically delay that process to. . . . You know, I can't even give a time for that.

Is there anything under discussion right now -- besides the discussion between the real estate industry and the privacy commissioner -- between the Assessment Authority, the real estate groups, and even maybe just with the minister -- how to get out of this pickle? Come November, something has to be in place to protect real estate owners in British Columbia that have had the protection through the action of the Assessment Authority up to now.

Hon. C. McGregor: Yes, I'm given to understand that there's continuing dialogue with the B.C. Assessment Authority to see what can be done in regards to this issue.

T. Nebbeling: That's what I wanted to hear -- that the Assessment Authority is part of the dialogue. That, to me, is very important.

This was something that went a little bit sideways. I didn't think there were so many complications right now, just by asking this simple question. Just for my information, at this

[ Page 15469 ]

stage the real estate industry can still get the information they need on a seven-days-per-week, 24-hours-per-day basis, as they've had before?

Hon. C. McGregor: Yes, they still have access at this time.

T. Nebbeling: I'd like to spend a little bit of time on the appeal board and the makeup of the appeal board. Can the minister explain how many appeal boards there are in the province? Is it regional-driven? Is it provincial-driven? The appeal board that we talk about -- is that the board that will have the authority to look at appeals that have been made on the local level? Give me an idea what this appeal board truly is.

I haven't got the act for 1998, otherwise I would have looked at it myself. But I tried to identify, if we're talking about the board, whether it's a provincial board or a more local, three-person board.


Hon. C. McGregor: I'll start with the property assessment review panels, which are the first levels of review, as opposed to technically an appeal. Obviously, that's the work they're expected to do. To investigate and adjudicate upon assessments in a fair manner is the mandate that they're given. These are laypeople. In other words, they're not assessment experts; they're not valuators or anything such as that. They're three laypeople from the community. There are 100 such review panels around the province, which means there are 300 people who serve in that capacity. There is a remuneration schedule.

The Property Assessment Appeal Board is a provincial agency, one body. There are, actually, 18 members on it currently, including the chair. It's centred in Richmond, and they create panels in order to hear cases. These individuals are in fact very skilled, and they're selected on the basis of the skills they bring as well as the advice of the chair -- and sometimes the board members themselves -- around areas of expertise that need to be added to the panel body itself. So we review their needs, wishes and nominees in order to select people who have the appropriate skills to engage in a very technical review that is largely to do with some very technical valuation information.

T. Nebbeling: I have a number of questions on these appeal boards -- local and the overall board.

If the Chair can allow me to go quickly back for one quick question on the privacy commissioner. . . . I should have asked it, and I just thought about it. As you know, many authorities, in the municipal sense, are creatures of the province. They have certain powers, but ultimately, there's always the provincial power that will overrule if need be. What is the power of a privacy commissioner? Is it like a creature of the province, or is it an independent power that can actually stand up against a minister and say: "Hey, listen, you're going to do it my way or the highway"?

Hon. C. McGregor: The privacy commissioner is an officer of the Legislature in the same way as the ombudsperson is and other appointments of a similar nature.

T. Nebbeling: Just quickly, I believe, then, that the minister is not bound by the decision of a privacy commissioner, like she is not bound by the decision of an ombudsman.

Hon. C. McGregor: I think that's probably a question that more appropriately should go to the minister responsible for that, rather than to have me answer it and be. . .


Hon. C. McGregor: . . .inaccurate in some way.

T. Nebbeling: Sorry, I didn't mean that. I would never use any information. . . .

I would like to go back to the property assessment. . . .


T. Nebbeling: I hope that is on the record. I heard it.

I would like to go back to the appeal boards. First of all, I'd like to quickly talk a little about these local appeal boards and the process in which these boards are indeed appointed. What kind of process is in place? Secondly, while you're checking that out, is there any form of tenure associated with the position of a member of these local appeal boards -- be it on how long they serve? Furthermore, is there also an age requirement? I know that's a word that is not welcome in this day and age, but I must say, from experience, that I've seen very old men sitting on these boards who really could not relate to the reality of what properties are up to now.


Hon. C. McGregor: I'm not aware of any age requirement, and there is no statutory term of office for these appointees. But each year, they are asked if they would like to continue, and they indicate whether they would. Oftentimes an individual wishes to continue because of an interest they have, and also because it's in the interest of continuity on the part of the operation of the panel for those individuals to continue.

[D. Streifel in the chair.]

T. Nebbeling: As there is a review going on of the changes to the act that apply to appeal boards, would there be consideration given for a tenure-type of operation? Again, it seems that the same people, year after year after year, come back in to become little power brokers on their own. They know in general the people who will appeal a local assessment; they already know who they are. I sometimes get the impression when I attend these appeals that the decisions have already been made: "Well, we're going to give him and him 10 percent, because that will satisfy him." On the other hand, that person comes back every year with the same problem.

I think it would be a lot fresher in general if there was a three-year or a five-year limitation. Certainly I think when somebody is 65 or 70 years of age, they should really start enjoying the fruit of all the hard work and the contribution to the boards and start getting a fishing licence. Those are some ideas that I would like to share with the minister, just as a thought process to kick-start your review.

Hon. C. McGregor: I hope that wasn't ageism on the other side of the House, as we all get closer to that magic age of 65 that the member made reference to -- some of us, of course, much farther away from that than others.

[ Page 15470 ]

Having said that, I think that the appeal process, despite its quirks and quarks, so to speak, works relatively well. It does an expeditious review, but there's certainly an opportunity to consider what changes one might want to make. In actual fact, this issue of continuing appointments has been raised with me, and I am prepared to consider -- of course, after talking with a representative number of people who serve in this capacity -- what changes they might also consider to be appropriate. And I would certainly welcome the member's input on that matter as well.


T. Nebbeling: Well, I made two recommendations, but you don't have to mention my name when you bring them forward.

The minister made the point that there's some remuneration, some financial consequences related to the boards. Can the minister give me the remuneration of those that work on the local level? Then later on we'll get to the major provincial appeal board.

Hon. C. McGregor: On the question of property assessment review panels, the chair of each panel receives $160 per diem; the members receive $125 per diem. On the matter of the Property Assessment Appeal Board, the per diem of members is $250 a day. As I understand it, the chair and vice-chair are full-time, and their salaries are based on the ML8 formula, which is a formula across government.

T. Nebbeling: On the MLA formula -- that means they get the same as an MLA?

Hon. C. McGregor: ML8 -- eight.

T. Nebbeling: Oh, eight. I thought you said an MLA, and I was thinking: "I'm going to apply for that job." Thank you.

Hon. C. McGregor: It actually might be better money.

T. Nebbeling: We haven't been working so long, but I'm already getting confused.

Okay, let's talk about the appeal board, then. The minister said 18 members. Again, the same questions, basically: do the appointments have a tenure? If they do, how long? Are there other values represented in the selection of members on the appeal board?

Hon. C. McGregor: There's actually been quite a bit of change to the Property Assessment Appeal Board. One of the changes that's been made is the process through which we select the chair and vice-chairs. Those positions went through a competitive process, and then those individuals' names were recommended to cabinet, because they are cabinet appointments. The chairs and vice-chairs -- as full-time members -- don't have terms, but the other part-time members of the board have terms which expire in different years to ensure that there is continuity on the board over a period of time and that over time we're able to have the kind of continuity that's necessary.

I think I answered the member's question. But perhaps I didn't, and he'll rephrase it if I didn't.


T. Nebbeling: The members that do have a term -- what is the term? Is it three years or five years?

Hon. C. McGregor: The majority of them are two-year terms.

T. Nebbeling: When these boards come together, they are the second level. I suppose, from a provincial government perspective, it's the last level of appeal. Have any cases that have not been concluded to the satisfaction of the appellant gone beyond that -- for example, to the Supreme Court of Canada? Is that option always open for appellants?

Hon. C. McGregor: The act makes reference to the fact that on a question of law, an appeal can be made to the Supreme Court. I've asked staff to check the annual report of the B.C. Assessment Authority so we can get the exact. . . . Oh, here it is. The exact number of cases that went forward to the Supreme Court, we believe, is about 20 out of a total number of appeals of about 1,000 on an annual basis. We'll just compare that to the actual facts in the annual report.

T. Nebbeling: While you are looking at the number of cases, maybe the minister can also look at what the actual cost is of taking these cases to the courts. Obviously I would further like to know how many of these cases were won by the appeal board and how many of these cases were won by the appellants.


Hon. C. McGregor: We can't locate the specific information about that item, so we'll take that question and provide the information to the member.

T. Nebbeling: Then I will not go on with that one. If I have questions, I will do it in writing to the minister following getting a report from the minister.

I'd like to bring two cases into the discussion now, which may reflect a level of frustration that most likely is prevalent in many other communities as well. The first one I'd like to talk about is a situation where the assessments are based, I believe, on October 31. That's the cut-off date. Whatever improvements are on the property are then the value of the improvement that will be reflected in the assessment. I have correspondence from one person. But I know firsthand of a number of others, where after October 31 but before the end of the year the value of the improvements were reduced virtually to zero through circumstances. I am talking about fires, and it happens all the time.

The minister is aware that in spite of this happening and despite it often leading to considerable cost and hardship for whoever owned that property, when the assessment comes in through the door, the value of the property for the following year -- although it is not even there anymore -- will be based on that number from October of the previous year. The assessment will be valued as if the property is there in full glory, especially with commercial property. That's a problem with commercial property, because often in the assessment -- as the minister knows -- the revenue that a property created is also calculated. It is not just the land and the building value. None of that is there anymore.

From time to time these cases have been appealed. I have, on one individual's behalf, written to the assessment board a

[ Page 15471 ]

number of times. So has my colleague from Shuswap. We're not saying the response is callous, but there is truly no sympathy whatsoever for consideration that this is an additional hardship that is unfair, in my opinion and, I also believe, unnecessary, if the system could just be made a little more flexible.

I've asked this before, and I've not had an answer, so I will ask it again: how many cases like that come annually to the attention of the Assessment Authority? Is there ever any consideration given to people under these circumstances that the assessment be redone? Or is it just a blanket statement? Further, I'd like to add that this issue has been highlighted at UBCMs a number of times in the form of motions. I have spoken to motions related to this at UBCM meetings in the past, but I've never seen any action by the government. Can the minister tell me whether she has any reason to believe that this is not necessarily the path that these people have to go by? Or is it just entrenched in legislation, and nothing can be done at this point?


Hon. C. McGregor: The member is correct when he makes the indication that it is legislative; the legislation makes clear what dates are in effect. I understand that the member makes a good point for the hardship that is brought upon certain individuals as a result of that legislative approach. On the other hand, it has the flip side of benefiting some commercial operations as well, on the basis of when they make their investments too.

If you were to apply the tool of flexibility, as the member argues -- and I wouldn't generally disagree with the principle of flexibility -- flexibility is a two-way street. So what do we do? Do we show flexibility for the person whose value decreases, or do we show flexibility for the person whose value increases? Would we have similar complaints from those who benefited or didn't benefit from improvements in their property and weren't taxed on those, if we applied a formula in a more flexible way?

So I think we have to examine that question on both sides, not just on how it looks to the individual who may feel that they've had some hardship -- maybe a fire or some other thing that they certainly couldn't control. Nonetheless, it might benefit another individual by their being able to engage in improvements within a certain period and not be taxed for that period as well.

The other issue I would raise is the one that gets raised with me by representatives of local government, and that is that changes in the system have the implication of having an effect on local government revenues. No matter what way we decide to apply the formula, it's going to have some implications on all of those players. I think that's probably, in large part, why people have basically stuck to what is in the legislation.

T. Nebbeling: I appreciate your analysis, so to say. And I also recognize that, yes indeed, if somebody does put improvements in place and they're done after October of a given year, then the owner will have the benefit.

However, I've got two counterarguments. First of all, it's very unrealistic to think that in our climate during the winter, improvements will be made in the construction -- because it would be construction. That's very unlikely. But the second argument, for me, is more important. And that is the fact that if I have to make a choice and find a way that will indeed help the guy or the girl who is down, then even if there may be some people who could try to take advantage of that flexibility, for the benefit of the person who's down I'd rather go that way.

I'm not telling the minister how to change the legislation. But what I would like to ask as you are going into review is: is there room for some lightening up to find some way of dealing with that legislation to reflect an opportunity or a possibility -- be it enabling per caseload. . . ? I don't know; I don't write legislation. It is giving the ministry an opportunity, from case to case, to say: "Here is a situation where indeed we can show some understanding and some grace to reflect the reality of the value of the property." That's really where I'm going. Maybe the minister can give me that response.

Hon. C. McGregor: Certainly we're always prepared to entertain an analysis of the rules as they exist to see if there's a way of making the system fairer or more balanced. And certainly we can ask the B.C. Assessment Authority to do a bit of analysis to engage in that kind of review. You know, on a personal level, I think the types of situations that might require flexibility would be things like natural disaster, as opposed to other conditions. Nonetheless, if the member has suggestions that he'd like to make, I'd be prepared to entertain them. But I do think that we have to consider the issues of balance and certainty, because every time you introduce a flexibility, the level of certainty in terms of revenue is at issue. So we have to balance that in whatever decisions we take.


T. Nebbeling: Again, I agree with the minister that this is an important component of it. However, maybe the minister actually touched on it, and that's why I make this comment. There is revenue involved here, and those that are affected by what for them is definitely a disaster are still asked to contribute financially. I don't know if the Assessment Authority has ever done an analysis of how much money is collected annually from these kind of situations. I am sure that for each and every case that is subject to what we are discussing here -- be it a fire or a natural disaster -- there must be a track record of how many of these, in general, occur in any given year. Then it is not too difficult to add the dollar value to it. Then, if you want to look at the other side, you can get an idea of whether it would actually be revenue-neutral for the government. I'm not giving you the solutions, but I'm asking for some consideration.

The second issue that I think would create more anger and frustration on a local level is the situation where local appeal boards constantly have to deal with angry people. They're angry people because they get an assessment in the door, and they just don't understand where it comes from. They come to an appeal board, then obviously they file the complaint, and then they get a hearing. What I have seen is that the term of "10 percent reduction," if you're compelling in your argument, is often the solution: "We'll give you a 10 percent reduction. Aren't you happy?"

Part of the problem -- and this statement is always made -- is the fact that people say: "How can you assess my property for this value? It hasn't got that value, and here are my reasons." And the return, then, from the assessment peo

[ Page 15472 ]

ple is: "Sorry, it's not our job to prove that our assessment is wrong. You have to prove that you are right." But it's not always very easy to do.

So the onus is really on the owner. I have checked other jurisdictions, and in other provinces the onus is not on the owner. It is on the Assessment Authority, in case of being questioned, to prove that the Assessment Authority is right. Have there ever been any discussions within the Assessment Authority on that subject? If so, can anything be done? In all fairness, the Napoleonic Code seems to be applied to how the Assessment Authority operates, whereas we live with the Magna Carta, in a sense. The owners should not have to prove that the assessment board is right. It should be the. . . . I would like to ask the minister's opinion on that one as well.


Hon. C. McGregor: The member raised a number of questions, and I'll try to address them all. In terms of the number of angry people who come into these appeal settings, that is true. I know that in my own experience I've spoken with panel members who can be made very uncomfortable by that, although other, more experienced ones have come to understand that there is a certain small segment of the population which has what might be described as an anger management issue. They've come to accept that as part of what they have to go through in terms of doing their work.

There is an orientation offered to members to assist them in how to manage people who are feeling very angry. Often that anger is driven by a lack of understanding of the matters before them and a real concern and fear over what their costs might be as the result of a decision that's been taken to increase the value and therefore their tax assessment.

I think that one of the measures we might want to consider in terms of the appeal system is what level of satisfaction exists broadly across the public in terms of this system and how it works. In terms of complaints that are received, the Assessment Appeal Board keeps track of those issues. Over a period of years we've actually had a significant decrease in the number of complaints, although the complaints are not extremely high percentage-wise. In fact, in 1993 it shows the percentage of complaints at 3.5 percent, decreasing to 1.7 percent in 1999.

So the total number of public complaints can be one indicator of satisfaction with the system -- not to say that it can't always get better. Obviously it can and should. We should take steps necessary to improve it as time goes forward. Nonetheless, I think there is a trend that's reversing the number of complaints. I would say that it is, at least in part, a result of the improvements we've made in the appeal system.

We do provide very public information to everyone about how the appeal process works. It is true that legislatively the burden of proof makes clear that it is the complainant who must show some reason for why they believe the appeal is necessary or should be upheld, because of some evidence they have.

It may be that other jurisdictions take a different approach. I can say we're aware that many jurisdictions take the very same approach. In fact, the B.C. Assessment Authority is held in very high regard by governments across North America. We often have visitors, and we're asked to speak at conferences with professionals in this field as a result of the expertise that is really recognized in our system here in British Columbia.

T. Nebbeling: So 3.4 percent -- maybe I'm wrong, but that represents about 48,000 cases provincewide. I find that this is a substantial amount. Actually, it is 4,800 cases, not 48,000.



T. Nebbeling: Twenty-seven? Okay. Well, that is still a substantial amount of annual complaints. The statement by the minister that the Assessment Authority team is held in high esteem -- I share that with the minister. I feel exactly the same way.

However, that team still works with the tools that the ministry creates, in cooperation with the Assessment Authority's and other authorities. That, I think, is the problem. Like I say, people having to prove that the value that they are assessed does not reflect true value. It's a problem. It is maybe more a problem in rural areas than it is in urban areas. In urban areas you take a street -- all the houses are the same. They all have so much frontage, and some with back. . . . In general, you look at the five-month sales, and you have an idea what the value is in these neighbourhoods.

In the rural areas it's different. I think that's often where the hardships are, because it is not easy to get an agent of the Assessment Authority to come out and be convinced that he or she was wrong in the assessment.

So I think it is a problem; I know it is a problem. I've had correspondence on it. I hope that it can be looked at and that there may be some changes made to reflect fairness of the system. I think that's what I'm talking about -- the fairness of the system.

I'd like to move on now. I appreciate the information given by staff that was available; and what was not, I am sure, I will receive in the very near future, hopefully. I want to touch briefly on the provincial safety record and the. . . . I don't know if somebody else is coming forward; I will wait.

In '98-99 the statistical report reflected that there was some discontent with the accumulation of the statistical database that was available at that time. Could the minister tell me if that accumulation of data has improved, or is there still dissatisfaction at this stage? If it is improved, what kind of measures or steps have been taken to reach that improvement?


Hon. C. McGregor: Yes, we do continue to have concerns in terms of how we standardize data and measurements. But we are doing significant work internally to try and reconcile and create standards that we can use on an ongoing basis to make sure we have very valid statistical measurements. One of the things we're doing is the fact that, really, across Canada there are no comparable databases. So we want to make sure, at least internal to our own systems, that there's comparable collection of data across multiple safety systems. That's a long answer to say yes, we're continuing to work on that to try and standardize those measures so that we can have a good way of reporting on the issues related to public safety.

T. Nebbeling: During the briefing we spoke on the issue of new studies and new programs to be introduced in the near future that will reflect an improvement in safety standards,

[ Page 15473 ]

maybe but also in how the safety standards will be reached to the levels that the minister expects them to be. If we do not have the data today in a way that is reflective of what truly happens in the province when it comes to safety standards and accidents. . . . If we don't have that study in place and we don't have the data today, why do we start at this time, then, an initiative -- as was introduced during the briefing -- to improve conditions under which work is being done -- if we don't know really what the problems are? That is a consequence of not having all the data in place.

Hon. C. McGregor: Well, I think the short answer is: we need to do both. We need to make sure that the systems we're engaging in on a provincial level are efficient and that they make best use of our resources. We should introduce changes to make sure that those efficiencies are achieved. When we have the opportunity to do so, we're going to develop a legislative response to the safety systems review in order to create some of those efficiencies.

Also, we need to make sure that we continue to build our expertise around the development of standards. It's not that we don't in fact collect data; we do collect data. But we do want to ensure that there is more standardization. So it's not that you choose to do one and not the other; it's that you move forward in both areas and make progress on the issue of data collection and management at the same time as you're improving the efficiency of your operation.

T. Nebbeling: The thing is that if you don't know how many eggs there are in a basket, you really cannot know how big the omelette will be. So I think it is important that there is data available that can be used to set new standards and required improvements on. It is input, performance and output. So I do not totally buy into the concept that with a limited amount of information, you can actually find optimum improvements in the systems towards better safety standards in the systems.

Maybe, then, the minister can give me an idea of what kind of programs are in place since 1998-99, when the study was done, and where it showed that things were not as it should be. Has that actually helped reduce the incidence rate of accidents in the various areas that we will have the study applied to?


Hon. C. McGregor: There were in fact 31 recommendations that arose from the safety systems review. We're in various stages of implementation of all those recommendations. We do have a matrix here that gives a summary of where we are at specifically on each of the recommendations. If the member would like a copy of that, we'd be happy to provide that.

T. Nebbeling: I would.

Hon. C. McGregor: The legislation is designed to provide the framework under which many of these systems will operate. In the meantime, one of the key areas we're looking at is an information management system, as well as a greater focus on issues related to certification. We've created a certification, education and quality management branch. Those are two areas of the 31 that have been covered in the report that we're working very vigorously on. But we're certainly making progress in all aspects of the report.

T. Nebbeling: As a consequence of the introduction of these 31 different programs, has there been a decrease in accident rates since that time? If so, would you consider that the situation is fairly healthy, as far as safety standards and impact of the programs that have been introduced? Or is this still in a state that you feel, as the minister, that we haven't really achieved the goals that we hoped to set out when we did this introduction in '98-99?

Hon. C. McGregor: It's likely too early in the process for us to attribute changes in safety accidents to a systems review that's being implemented over the last year or so. We certainly expect that it will have an impact over time.

That's not to say, though, that we don't track accidents and trends in accidents. The trend does appear to have a downward direction, so we're very encouraged by that. That tells us that our inspectors, who are very capable people working in the field, are doing good work and that they're making sure that safety standards are adhered to. That's not to say that we can't always do our job better. In fact, we may well make decisions to change the manner in which we enforce provisions or to increase the number of inspectors available in certain areas, on the basis of statistical evidence to show that there's a need for us to take stronger measures in particular fields.


T. Nebbeling: Would it then be possible for the minister to provide me with this data you have that reflects the tracking since the introduction of these 31 programs? If that could be done in a breakout by the type of agency that is covered by these programs -- be it boiler testing, electricity, gas -- if that would be possible, that would be very helpful. And then we could move on.

Hon. C. McGregor: We'd be happy to provide the member with that information. It may take us several weeks to put it into a form that the member will be able to understand, other than just having numbers across. We'd like to make it into readable graphs or some way to give the member really meaningful information. We'd be happy to provide that.

T. Nebbeling: I appreciate that. I hope several weeks means not many, many, many weeks. Sometimes when it is open-ended like that, from past experiences, several weeks can really add up to a long period of time. I really enjoyed your commitment, to the member for Prince George-Omineca earlier on, when you said: "Okay, you need some information; I will provide it to you in one week." I believe you said that. And if several weeks means two weeks, then that's fine with me. We see each other in the corridor on a daily basis, so I will keep on reminding you. Don't worry.

Another area I would like to quickly go through is. . . . Well, there are many areas still to go through, but one that I think is of interest to the minister as well is the. . . . Well, it comes back again to empowerment of local government and what we. . . . I don't think you have to bring in the troops.


T. Nebbeling: No. It's okay.


[ Page 15474 ]

T. Nebbeling: Yes, definitely -- thank you. I appreciate you having to wait so long for such a short little time together.

As you well know, through the Chair to the minister, over the last year in particular many communities have written to me about the lack of control over zoning on Crown land within municipal jurisdiction. And as we have talked a little bit yesterday and this morning, as well, about how difficult it is for municipalities these days to enforce the empowerment that we have given them. . . . Has the minister got any idea how she can assist?


T. Nebbeling: Crossword puzzles? Maybe the Chair could ask that crossword puzzles be done in silence. I don't know the answer to letter D, so I shouldn't have to hear that. Is that possible for the Chair?

The Chair: Member on vote 41.

T. Nebbeling: I asked the Chair to ask the members not to do crossword puzzles so loud that I have to think of the answers.

The Chair: Member, if you have a question for the minister on vote 41. . . .

T. Nebbeling: Bad, bad, bad, bad.

Through the Chair to the minister, has the minister got any ideas of how she is going to assist communities in that particular problem? Squamish has a problem; West Vancouver has a problem; Langley has a problem. And it is all related to lands within the jurisdictions where activities take place, where. . . . Council truly is not allowed to impose the standards that they impose on any other land within the municipality. I was just wondering if the minister has any ideas of how we can remedy that problem, because it is becoming more and more of a concern to communities at large.


Horseshoe Bay, as the minister is very well aware, has organized communities fighting B.C. Ferries. It is unfortunate, because the fight is much more aggressive than would have been necessary if it had been recognized that the force of the community, represented by the council, would have been incorporated in the decision-making programs that led to decisions that the people of Horseshoe Bay have to live with.

I believe, although it is not the ministry that is responsible for controlling. . . . I understand that. But as it is the ministry that works with councils to find solutions to problems, I was hoping, at least, that the minister can somehow give me some assurance that she is involved not only in trying to find solutions but in certain areas where the solutions can come from.

Hon. C. McGregor: Yes, I understand that there are a number of occasions when there are interactions between Crown lands and local governments, and certainly I'm aware of some of those. In fact, I've discussed these matters with some representatives of local governments to whom there are specific circumstances and cases to try to reach resolution on. This is an issue that needs to be discussed thoroughly, in my view, with UBCM, because there is a broad interest on the part of local governments and, of course, the province, in terms of Crown land management.

Some of these issues are before the courts, and it would be inappropriate for me to comment specifically. I find my answer to be rather general, because I think that by necessity it should be. But I'm certainly prepared to work as a representative of government on solutions with local governments, on a case-by-case basis as they arise.

T. Nebbeling: I'll certainly not allude to cases that are in front of the courts. However -- not that that may already be too close -- I want to talk about the situation where rights that Crown corporations today have as far as zoning and as far as not having to pay certain fees or certain taxes in a community where they own the land. . . . There are now situations where decisions have been made that these rights apply also to tenants on these lands. That's maybe one of the cases that the minister can't talk about.

Is the minister aware of what is happening right now in Horseshoe Bay with B.C. Ferries? It is an issue that I will bring to the attention of B.C. Ferries as well. Again, here is a municipal council fighting vigorously to at least get a Crown corporation to work within the planning that has been done for an area as far as the type of development they're introducing there. There is just very little or no response to that. Every time this comes up it is basically the arrogance of the Crown corporation saying: "We do not need to talk to you as a municipal council. We can do what we want to do."

There are some further complications that, again, I will not bring up, because there is a court case -- not a court case for this particular project, but in other areas. That attitude of Crown corporations. . . . How is the minister relating to other ministers who represent Crown corporations that are having these relationships with local government? I remember yesterday, when Madam Minister spoke passionately about how she feels that her role is to assist communities to do the things that need to be done in order to make a community wholesome and get its due.

Can the minister maybe answer me? Is she aware of the situation with B.C. Ferries in Horseshoe Bay? Has she spoken to a representative there to make the situation more acceptable for the council of West Vancouver? I'm asking this question because we have just seen the financial plan of the B.C. Ferry, a Crown corporation, and they seem to want to go ahead full speed without any consideration of this council's wishes.


What bothers me is that this is a very good council. This is a council that cooperates wherever it can. There's an ex-Attorney General on the council who makes sure that everything is done in order. So it is not a rogue council trying to make the life of a Crown corporation miserable. This is a good council, a respected council. They get treated like dirt, quite frankly, and thereby the community feels like it gets treated like dirt.


T. Nebbeling: I wish I could hear that joke.

Anyhow, what I'd like to hear from the minister is if she knows about the situation in Horseshoe Bay. Is there any way

[ Page 15475 ]

she can interfere or do anything to stop the progress that B.C. Ferries is trying to make in their plans at this stage, so that the wishes of the community will be heard as well?

Hon. C. McGregor: The member raises an issue that hasn't been raised with me by the local council in question. That's not to say that they won't. In fact, the member makes reference to the very point that I would take in terms of this issue and any other issue that a local council might have. I want to take a role in order to assist and facilitate finding solutions to problems. I don't hesitate for a moment to contact any one of my colleagues across government to try and facilitate direct access on behalf of a council or a mayor or any person in local government -- a senior manager within a local government -- to make sure that their issues are being adequately heard, so that we can facilitate solutions. I see that as my key role.

T. Nebbeling: I appreciate your words, and I also appreciate that you feel that way. I hope that you will indeed try to talk with the minister responsible for B.C. Ferries and at least get some information on why they're pushing this through.

It is for me a good lead into the next section that I want to talk about. I didn't want to spend a lot of time on the section of the Crown corporation's role within municipal jurisdictions, because of the legal cases. But I thought I'd go carefully around to make this particular point for Horseshoe Bay, as it is very important.

Talking about the consequences of local governments not being recognized by Crown corporations. . . . Besides building permits that are not applied for and water and fee charges not paid, Crown corporations don't pay property taxes either. Of course, when it comes to financial management, municipalities today are desperately looking for new ways to finance the municipal operation. The grant program, which we will talk about much later, has really led to the undermining of the financial viability of many communities.

In 1998 a study was done in conjunction with, I believe, MOA, UBCM and the Ministry of Municipal Affairs to find ways to give municipalities new tools to create revenue without just going to the traditional revenue base of the municipalities -- property tax, be it residential or commercial. A part of the traditional base was indeed the conditional and unconditional grant programs. Since 1996 all that has been radically eroded, and it is now that we really feel the impact. I go to that part now, because I think we have to talk about what is happening in that section.

I want to emphasize that part of the problem with the previous program in Horseshoe Bay that we discussed is that not only do we have development happening in Horseshoe Bay, but there is no revenue paid by these parties to the local governments to participate in the cost of the administration of the local community, because the Crown doesn't pay property taxes -- as the minister well knows.

Coming back to that study that was done in 1998, has the minister got it? Yeah. What has happened with the recommendations that were made by that group that was made up of people who know local government? As I take it, although the recommendations at that time had to be revenue-neutral for the provincial government, nevertheless there were some suggestions made. I have not, since the time that the report came out, heard of any further action on the report. Maybe the minister can enlighten me about what has been done with some of the points and what else is happening to find solutions to this financial pressure that municipalities are now under.


Hon. C. McGregor: There were a number of what were called financing strategy components that were announced in December 1998 as a result of the report. That included the small community protection grant.


Hon. C. McGregor: That was not what you're making reference to?

T. Nebbeling: No. That was not part of the study. Sorry.

Hon. C. McGregor: Well, in fact the recommendation from the report was that we should include protection for small communities while addressing the issue of stable transfers. So as a direct result of talking through that recommendation, we came up with a program which resulted in the small community protection grant.

The issue of payment in lieu of property taxes was also one of the issues that was addressed. We are engaging in a review this year of B.C. Rail payments in lieu. There may be other payments-in-lieu programs that can be reviewed as well, although a preliminary look at that issue. . . . Any adjustment in existing programs creates winners and losers, so in part these kinds of reviews can be problematic.

Nonetheless, I'm meeting with UBCM later this week, I hope. One of the items that's on the agenda is to talk about their priorities. This may well be an area of priority for them that we would be prepared to consider in the upcoming year.

New tax revenue sources was identified as an issue, and as a result of that we engaged in a very significant initiative around traffic fine revenue-sharing. That was a new program set at $13.2 million in 1999.

Removing restrictions on existing revenue measures was another recommendation from that report. Bill 88, the Municipal Act reform, included more measures that created more flexible authority to impose things like parcel taxes, fees and charges. In June of '99 we also lifted the moratorium on the additional 2 percent hotel tax, and a number of municipal governments have responded to that.

We've also put in place a multi-stakeholder development finance review committee that's looking at areas of municipal finance associated with development cost charges. A choices guide was developed to look at alternatives to DCCs.

Financial management was also an issue that was raised. Bill 88, as the member knows, includes a number of provisions related to financial planning, reporting and auditing. It also provides for alternative property tax collection methods, which was an issue with local governments and can be a source of costs and/or revenue.

One issue was police finance. There was, actually, no agreement to report out on anything. Since the time that this report came about, we have agreed. I met with UBCM justice committee and the Attorney General to talk about the issues of police financing, particularly from the concern of small

[ Page 15476 ]

communities who reach the 5,000 limit, at which time police costing kicks in. There are concerns around that issue, and we have agreed to engage in a review of that issue.

I think in fact there has been significant work done on the recommendations that came about as a result of that agreement, to look at those alternate financing issues. There's still an opportunity to identify other issues or related issues from this report when I meet with UBCM later this week.


T. Nebbeling: I appreciate some of the words that the minister is stating today. However, I do not think that the study was just, as its conclusions, focused on some of the elements that the minister alluded to, be it the DCC issues, be it police financing. I think there was more a need for establishing new principles that would allow municipalities to find ways to create new opportunities to find the funds for their financial management.

What the minister has done so far is basically repeat programs that were already in place and that were either a burden on communities or were revenue for the government. I always remember that one line in the letter that came from the minister, and it was that the programs that would be created had to be revenue-neutral for the provincial government. I think that goal is not attainable if we truly recognize that municipalities have to have tools that may well take some revenue away from the provincial government. One tool that was mentioned -- and the minister didn't mention this -- was the real estate transfer tax, for example. That was one of the taxes. That is a local activity that should maybe remain in the community. That's the point.

On the DCCs, I don't know what has happened. There have been studies done; I have seen some conclusions. Again, there is nothing that has been given to local government to say: "Okay, here's a tool to create some more revenue without going directly to your taxpayers." That is what I think communities gave as a strong message to the minister: "We need new tools. We cannot just go with the standard basic tools that we have used in the past, because that is always taxing property taxes." There is just no desire and no money left in the pockets of people to go into these kind of programs.

I'm a little bit disappointed, because I think what the minister said. . . . Nothing has happened. The small community protection grant was introduced at a time when we saw the major cut introduced at $130 million. At that time, the government made the reassurance -- it was prior to that study being undertaken, it was prior to that -- that small communities, communities under 5,000, did not have to worry over what the number was. But the small communities were not going to be targeted by the cut. I think that was not only a politically good move, but it was also a move that was needed, because it is the small communities that have in general a terrible problem to provide the infrastructure that they need to service their very small populations.

The other area that the minister alluded to as being a consequence of the push by local government to say, "We need to do something here," is the area of the funding from the AG office through the Ministry of Municipal Affairs in regards to a share in the policing revenue -- the ticket revenue. That was again not part of the study.

That whole commitment by the AG was made not because he wanted to but because communities refused the use of certain tools, patrolling tools, in their communities. That started with the photo radar. We all remember the whole debate about it; I don't have to repeat that. Communities said: "Listen, if you're going to come in our community -- you set up these things, and you're going to get revenue -- then unless we get something from that revenue, forget it. We are not going to be players in this game." The same happened even stronger with the red light.


T. Nebbeling: It's not a joke. I want that clipboard. I think under the freedom of information I can request that. [Laughter.] That is going to have a lot of good information for me to use later, no doubt.

Anyhow, I think it is fair to say that the study and the effort made by competent people in 1998 have not really had much follow-up. I've checked with my communities; I've checked particularly in Whistler. The tools that Whistler considered that could be part of the answer for the financial pressure that Whistler is under because of the demand of new infrastructure. . . . I mean, there was nothing there 20 years ago. They're sort of still trying to put the infrastructure into service.

A population of 10,000 with a visitors population of 45,000 -- that is the population of Whistler on an average weekend day. So that 10,000 population is, in a sense, responsible for the infrastructure to accommodate all. It has been given assistance in the past; I know this. But it's still not completed. Worse than that, especially in the water and sewer treatment area, we are really behind the eightball. Whistler doesn't have the reserve funds they used to have, because they've been spending to catch up with the financial needs, based on the fact that we're getting less and less grant support.

I know there are suggestions made. In all fairness, very little has ever happened. I am also willing to share with you that, having spoken to some of the people who participated in the community process, there is a very strong sense of disappointment -- basically because no results have come forward from the work they did. They did three workshops on three different occasions, if I remember well, and they all committed to do their very best to find solutions. There were some solutions recommended, and none of these recommendations have been followed up.


Can the minister at least assure me that we will, in the very near future, either restart this process with the objective of truly finding ways to empower communities to find revenue that they cannot tap into today. . . ? Maybe the minister can give me some further enlightenment on what she thinks some of these areas can be -- without tapping into the traditional revenue sources either that have been there prior to the discussion or that have been created because of other factors.

Hon. C. McGregor: I appreciate the member's comments as they relate to the report and the work that we did together with UBCM on issues of financial concern to municipal governments. As we all know -- the local governments, provincial governments, federal governments -- we all face the same pressures of trying to do more with less. Whatever tools we can provide to enable us to do those jobs more effectively, we

[ Page 15477 ]

all want to find them. I'd have to say, though, that I don't believe there are any magic bullets. It's a matter of hard work for us to work together to try and achieve those outcomes.

The member made direct reference to infrastructure, in particular -- infrastructure needs in communities. I think that's an important area for me to touch on briefly. As a part of our commitment to working with local governments, we did announce a very comprehensive three-year infrastructure program: $50 million in each of those three years. It's a fairly significant contribution for the province to make in acknowledgement of the real needs across British Columbia. In comparison, the federal government's commitment to a federal-provincial-local infrastructure program was only $50 million on a national basis in its first year. So clearly, from B.C.'s perspective, $50 million for just the province of British Columbia is fairly significant.

Nonetheless, we're going to do our best. We're going to work with UBCM and the Federation of Municipal Governments from across Canada to make sure the federal government addresses the question of infrastructure and the needs of communities, as a part of what was announced in the federal budget and what agreements are made with provinces from coast to coast.


I just want to end this matter with a bit of a light-hearted look at the question of relationships between provincial and municipal governments as it relates to fiscal matters. We just happen to have a report that was done for UBCM by a member of the Trent University Department of Economics in Ontario. He was doing an analysis of different provincial jurisdictions and the fiscal relationships that exist. In fact, he ends his paper by talking about "has B.C. got it right?" He actually says that in British Columbia, not only are the measures generally appropriate, but they're certainly more appropriate than other provinces. He goes on to describe some of the ways in which these fiscal arrangements are superior here in British Columbia to other jurisdictions across Canada.

I'd certainly be prepared to offer this copy of this report to the member, because he might find some interest -- it's talking about fiscal trends -- in looking at some interprovincial comparisons. It does give credit to British Columbia for the type of fiscal relationship it has with its local governments. Not to say that it's perfect; I certainly don't want to imply that in any way. I do agree with the member that we should continue to work with UBCM. As I've indicated earlier, I'll be meeting with them later this week, I hope. This is a matter of significant interest to them. I'll certainly be prepared to follow up on any items related to fiscal management questions -- revenue issues that they might identify for us as their priority.

T. Nebbeling: Thanks for the statement by the minister. I categorically refuse to comment on reports that I have not read and where I'm only given the last line. I hope the minister understands that. However, it is interesting to note that this may be the first time in the history of this government that they are actually willing to quote an Ontario report as a positive contributor to how the world sees British Columbia. I would really appreciate a copy of the report, because I like a good laugh too. You wanted to leave it in a light-hearted way.

I know it is very complicated as an issue. Sometimes we try to disguise our real sense of frustration with the lack of action by blaming others -- we do that -- and looking at other parties for things not being right. I think it is telling when the minister said. . . . And this is the first time that we actually saw a bit of fed-bashing in our estimates, which again I think is a record.

The minister said that in the infrastructure program introduced by the feds, there was only $50 million in the first year. Then it is also fair for me to ask, as this was a three-year program: what was the total federal contribution towards the infrastructure program that was done in working relationship with the provincial government and the municipalities? That's number one.

When the minister is looking at numbers, at the same time, maybe she can also then tell me. . . . As the minister just said, we have introduced. . . . Maybe I'll wait for that answer, and then I'll go to my next.

Hon. C. McGregor: I'm given to understand that the entire commitment to British Columbia over three years is $225 million. That includes not only water and sewer but highways and a cultural component. So it's not all -- nor was it intended to be -- for water and sewer, although I would argue that we could easily use it all in British Columbia just in that category, based on the experience of the meetings I've had with local governments across the province. Nonetheless, their intention is to structure that program over a number of program areas -- not simply into water and sewer.

T. Nebbeling: You want to add to it.

Hon. C. McGregor: Yes. I need to correct myself, because I'm just told that the $225 million was the old program, not the new program. I correct myself on that. Thank you, member.

T. Nebbeling: That's what I was going to comment on, only because the minister said that in the past it was only a contribution of $50,000 towards the infrastructure -- $50 million. Well, you said $50,000. Did you check the record? But you meant $50 million. I thought I'd just get the number out there.


Now we're talking about grants, and I was not going to do that yet. I will ask a question on the grant program, then. As we have discussed a couple of times now -- and it is not going to be long, so don't worry -- how the devastation in communities. . . . The impact of the reduction in grants has been a devastating experience for many communities.

I need a glass of water. I'm getting tongue-tied.

I would like to quickly look at some communities that in the last round really saw their unconditional grants reduced to very low levels. One community actually got zero, and that is the community of Kitimat.

Kitimat has a population of 11,000 people; their community is comparable to, for example, North Saanich. And where Kitimat was getting zero, North Saanich was getting $181,000. At the same time, a community like Powell River, with 13,000 people, was getting $123,000 -- less, again, than Saanich. Pitt Meadows, with a population of 14,000, was getting $170,000. It's all over the field.

I know there are certain formulas used by government, but I can tell you that the mayor of Kitimat, whom I talked to, does not understand why he and his community finished up

[ Page 15478 ]

at zero, where other communities at least got something. Maybe the minister can give me the rationale of how she came up with that. This is under the small community grant, by the way.

Hon. C. McGregor: The small community protection grant is a formula-driven calculation. It's a combination of applying assessed values and the population. In the case of Kitimat, it may well be that their assessed values rose a significant amount, one year over the other, which generated a zero in the small community protection program. However, if you look at their entire grant structure overall and you look at the traffic fine revenue-sharing, that grant continued on for Kitimat. The total difference in their actual grants, year over year, was about $5,000. So it shouldn't have been a matter of significant concern to Kitimat.

I don't ever underestimate a decision for us to have formulas applied -- that that has some effect on communities. I don't want to underestimate its importance for local communities, no matter how small the amount is. But having lost it in one category, they did make it up in another category. So overall, they were largely unaffected, year over year.

T. Nebbeling: The point is that there's such a discrepancy between communities such as Powell River and Pitt Meadows and Kitimat, with the same or almost the same population -- or the last two, Powell River and Pitt Meadows, actually having a higher population -- and getting considerably more. I doubt that the assessment for Kitimat can have had much impact. Kitimat has all kinds of factors that have really had no impact on development, be it commercial development. . . . So Kitimat is baffled. I've asked the minister to contact the ministry direct, but I wanted to use it in estimates. To bring a community of that size, even when it qualifies under normal circumstances for the small community grant. . . . There was a guarantee by previous ministers that it would always be there, and it has now gone to zero.


Yes, I know that the $31,000 has now been paid out under the traffic fine revenue grant. But that doesn't make it up. That traffic revenue was supposed to be an additional amount of money on top of whatever they were entitled to get before, in order to alleviate some of the problems they were facing there. So to say, "Well, you know, it is made up by the police grant" is not the right answer, Madam Minister. That was not supposed to be a grant program to replace funding. It was to be a grant program to add to some of the revenues these communities were receiving.

Hon. C. McGregor: It's difficult to compare apples and oranges. In fact, in the case of Kitimat, they were never eligible for the small community protection grant, as we can see from the statistics we have here.

If the member is suggesting that we should rewrite all of the formulas we have and try to find a more equitable system for how unconditional grants are allocated to municipal governments, I think that's an interesting view. But I'd want that reinforced by UBCM before I'd be prepared to consider some significant change in how we do that.

T. Nebbeling: I brought this particular case forward to illustrate how difficult it is for communities to do their financial planning and how difficult it is for municipalities to have funding available to do the basic things you have to do as an administrator of a town. That was in context with the study we talked about earlier on, which gave some guarantee that through consultation, the government would find new ways for municipalities to find revenue, so that their dependency on the grant money that was cut off would be replaced with something else. Well, the dependency on the grant money was cut off a couple of years ago, and there is nothing in place today for communities to say: "But wait. We can still do this and that." And that is why I used this as an illustration.

I must say that the whole financial strategy that has been imposed on municipalities -- or local governments, I should say -- over the last couple of years has been extremely one-sided. The government certainly achieved its goals, and that was the reduction of channelling money that was committed before.

There's another problem that has been created with this, and that is -- going quickly back to Bill 88 -- that there's a requirement now for communities to do their financial planning on a five-year basis. Given that most probably expected some funding in the coming year in the financial plan, what are they going to do for next year and the year after? How can communities plan if they don't know what they're going to get from government on a year-to-year basis, be it conditional grants or other forms of financial assistance that today is committed but tomorrow might fly away?

This is the other problem that communities face. They have to comply with new rules and regulations about financial disclosure of municipalities. The uncertainty that communities face about future funding lead them to be in a very difficult position to provide a five-year plan. Can the minister address that part?


The Chair: With an eye on the clock, minister. . . .

Hon. C. McGregor: The member raises important issues for discussion around grants -- unconditional grants, conditional grants. There are no simple answers to these questions. In a perfect world there wouldn't have been any grant reductions to local governments. But unfortunately, the province found itself in a situation where it has many revenue pressures, and it had to take certain decisions to reduce unconditional grants to local governments in order to protect the kind of investments we were making, particularly in health care and education. As the member knows, those budgets have grown significantly over our term in government.

Having said that, I acknowledge that there has been concern with the approach we've taken in a consultative sense. That's why, when we announced the new grant programs -- small community protection grants, traffic fine revenue-sharing. . . . When we made that announcement, we gave a commitment to a three-year look ahead to what could be in place for local governments. They do deserve the kind of certainty that the member talks about in terms of their own financial planning.

I think I can best describe my efforts and the efforts of ministers previous to me as wanting to work with local governments and UBCM in particular on these questions of consultation, sources of revenue and so on, into the future. I don't know that I can give the member any more direct assurances than that. It is my intention to continue to engage in that

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consultative process to define the ways, as we've talked earlier, of working with the UBCM on potential areas of concern to them and on priorities for looking at other possible sources of revenue and continuing to have an open dialogue so that they can be as aware as possible of our government's intentions as they relate to both conditional and unconditional grant programs.

T. Nebbeling: Well, I can conclude that UBCM is going to be very, very busy. Many of the answers that the minister has given me as an excuse for no action are that further negotiations and discussions have to take place with UBCM. I find that a sad statement, because we are talking about the inaction of the last couple of years, and the UBCM has always been there. The UBCM has always actually complained about the lack of true consultation on issues. If that lack of consultation, because prior ministers were not interested in a dialogue the way this minister is, has led to the shortfall that many communities have to experience today, that's really sad. But I hope the minister will indeed fulfil her promises and start working very, very fast on working with UBCM to see not just how they feel about issues but also how issues can be solved to the satisfaction of communities.

There is one issue I still want to address, because of time, that the minister can maybe give an answer on. I can also tell the minister that it will be my last question, and we will have completed the estimates after that question. It is cash in lieu.


T. Nebbeling: I know. Because of the party, I had to change the program a bit. You must have noticed that I went fast suddenly.

Hon. C. McGregor: I am amazed.

T. Nebbeling: I had a lot of stuff.

Now, the question I want to ask is about cash in lieu. Again, here is a commitment made through communities along B.C. Rail, grant money for. . . . Cash in lieu instead of grants -- that program was introduced a number of years ago. I believe it was the minister then -- who today is not the minister, but who is in the room -- who made certain commitments about a permanent solution to that cash-in-lieu program with B.C. Rail for these communities.


Here we are today; there is no permanent formula. We're still talking about looking at how we're going to do it. When we talk about the five-year plan you now demand from these municipalities, how can they incorporate the cash in lieu they are supposed to get, if there is no formula? How can they incorporate over a five-year plan the number of dollars that they can look forward to receiving, if there is no five-year plan? So that's number one.

Number two, even if they do get money, it often doesn't arrive or. . . . The money doesn't arrive until about July. That's too late. The five-year plan has to be handed in by May. So there are some areas that, with this requirement for the five-year plan, really are problematic -- not only that the dollars are not there but that if the dollars are promised, no community can say how much it will be.

I'd like to leave that particular point with the minister not necessarily for responding -- yes, if you want to -- but more as an issue that I know is very important for these communities. Hopefully it will be addressed very, very soon with the long-term solution as to how to deal with it, including the timely announcement of how much money they're going to get.

The Chair: Minister, minding the clock.

Hon. C. McGregor: In summary and in closing debate, I'd like to thank the member for his many questions and the opportunity to be able to respond. We have quite a bit of follow-up to do as a result of some conversations we've had. It's my intention to try and get that to you in the most timely manner possible. I do try very hard to live up to commitments that are made, and my staff has given an indication that we'll work very hard to try and have the responses to you as soon as possible.

On the question of B.C. Rail payments in lieu, that was established at $2 million annually. The program parameters were designed to be reviewed every five years.

T. Nebbeling: That is now?

Hon. C. McGregor: That is now; that is this year.

So the very issue that the member notes, about the late notification, is something we have also noted and think is an appropriate matter to be reviewed. I will look forward to that being something we can address. The member is quite right in terms of the inconsistency in the five-year planning process and not getting information to governments in a timely way.

With that, hon. Chair, do I have to read a motion, or. . . ? No, I'll just sit down.

Vote 41 approved.

Vote 42: local government grants, $101,096,000 -- approved.

Hon. C. McGregor: I move that we rise, report resolutions and ask leave to sit again.

Motion approved.

The committee rose at 5:54 p.m.

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