2004 Legislative Session: 5th Session, 37th Parliament

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

Official Report of




Morning Sitting

Volume 23, Number 1


Routine Proceedings

Tabling Documents 9871
Building Better Reports: Our Review of the 2002-03 Annual Service Plan Reports of Government, auditor general report No. 7, 2003-04
Committee of the Whole House 9871
Railway Safety Act (Bill 20)
     J. Kwan
     Hon. M. Coell
Report and Third Reading of Bills 9883
Railway Safety Act (Bill 20)
Proceedings in the Douglas Fir Room
Committee of Supply 9883
Estimates: Ministry of Public Safety and Solicitor General (continued)
     J. MacPhail
     Hon. R. Coleman
     P. Nettleton

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           The House met at 10:03 a.m.


Tabling Documents

           Mr. Speaker: Hon. members, I have the honour to present the auditor general's report No. 7, 2003-04, Building Better Reports: Our Review of the 2002-03 Annual Service Plan Reports of Government.

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Orders of the Day

           Hon. G. Bruce: I call committee stage of Bill 20. In the small committee, I call Committee of Supply for the Ministry of Public Safety and Solicitor General.

Committee of the Whole House


           The House in Committee of the Whole (Section B) on Bill 20; J. Weisbeck in the chair.

           The committee met at 10:07 a.m.

           Sections 1 to 3 inclusive approved.

           On section 4.

           J. Kwan: First of all, section 3 states that the minister must appoint a registrar of railway safety under the Public Service Act. Then when we go to section 4, section 4(1) states that the minister may appoint any person as a railway safety inspector. What are the provisions for qualifications?

           Hon. M. Coell: This provision will be delegated to the safety authority, and they will appoint people to do the inspections. As a matter of fact, they'll be the same people that are doing the inspections now for the government. They'll just be moved into the safety authority and continue to do the inspections.

           J. Kwan: So the same provisions for qualifications that used to be in place and are in place for the other safety inspectors would be adopted for the purposes of this act?

           Hon. M. Coell: That is correct.

           J. Kwan: Just to refresh my memory, for example, are first-aid training and those kinds of things included in the qualifications?

           Hon. M. Coell: Most of the people now doing the job have many years experience. Their job is actually to inspect the railway cars, rails, any moving equipment. It's not to do health inspections. That would be a different group of people.

           J. Kwan: Have the qualifications ever been in legislation before, or have they always been a delegated authority?

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           Hon. M. Coell: It's the same as in the previous act. It has always been up to the minister to appoint inspectors — no change from the old act to the new act.

           Section 4 approved.

           On section 5.

           J. Kwan: Section 5(1) says that the minister may enter into an administrative agreement with an authority to administer any provisions of the act and the regulations. Then subsection (2)(f) states that an administrative agreement must specify provisions for the settlement of disputes. What kind of system of dispute resolution is that likely to entail?

           Hon. M. Coell: It's a progressive style of dispute resolution that would start at staff and work through — very similar, if not identical, to the Safety Standards Act.

           J. Kwan: If the minister could elaborate on that…. Similar to the Safety Standards Act — what does that mean?

           Hon. M. Coell: I'll just read the dispute resolution. This will be a public document after it is signed as well.

           "If there is a dispute between parties under the agreement, either party may, by written notice to the other, refer the dispute for resolution in the first instance to the assistant deputy minister of the ministry on behalf of the province and to the chief executive officer of the B.C. Safety Authority on behalf of the B.C. Safety Authority Act, who will each use reasonable efforts to resolve the dispute within a period of 14 days, following the date that has been referred to them. If a dispute between the parties under this agreement cannot be resolved in accordance with section 18.01, the dispute will be referred by the parties to a single arbitrator and be finally resolved by arbitration administered by the British Columbia International Commercial Arbitration Centre in accordance with domestic commercial arbitration rules of the procedure of the centre as amended…."

And it can be amended from time to time as is usual.

           J. Kwan: So the process is such that it first goes to the deputy, and if it's not resolved, then it goes to arbitration. Is it the case that where there's no resolution, it automatically goes to arbitration, or does it have to be referred by one party or the other?

           Hon. M. Coell: By one or the other or both.

           J. Kwan: So there doesn't have to be agreement for it to go to arbitration. After 14 days, if resolution is not

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resolved, one party can request it or both parties, but it doesn't matter.

           Now, going through to arbitration, who gets to choose the arbitrator, or is that an appointment by the government?

           Hon. M. Coell: The process would be to use the B.C. International Commercial Arbitration Centre and their process.

           J. Kwan: And who pays for the costs of arbitration?

           Hon. M. Coell: That would also be the arbitration centre's rules, and their rules and procedures would dictate who would pay and at what level.

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           J. Kwan: My understanding is that there would be a fee that would be applied to offset part of the cost for the arbitrator from both sides, and then there would be a fee that would apply for filing for the arbitration. Would those be the rules that apply under this situation?

           Hon. M. Coell: It's very likely there could be fees, but they would be determined by the arbitration rules and procedures of the centre. They may vary from time to time as well.

           J. Kwan: How would it be that they would vary? I thought it was a fixed amount to offset the cost of the arbitrator, in part, and then there's a fixed amount for filing — a cost for the application.

           I'm sorry. I'm not completely up to speed on what the centre's rules are. That was my understanding of the costs associated with an arbitrator under the centre. But if I'm wrong in that, could the minister be specific in advising me what costs exactly are involved for the parties?

           Hon. M. Coell: I think the likelihood of this being used is very slim — that you wouldn't be able to solve the disputes. What I was saying — and I'm sorry if I wasn't clear enough for the member — is that the costs of these may change over years. It may be a fixed fee this year but change ten years from now.

           J. Kwan: Right. Thank you. No one can guarantee the cost ten years from now, so I understand that.

           As far as I understand, then, the cost is for the parties to pay a fixed fee towards the cost of the arbitrator to offset the cost of the arbitrator and then to pay a filing fee associated with it. Those were the costs associated for this particular set of dispute resolutions if it does go to arbitration.

           Hon. M. Coell: I guess, simply, the parties will pay all applicable fees. Those fees would be determined by the arbitration rules and procedures of the centre. I think the member's asking what those fees are. I don't have those actual fees. They aren't set as yet.

           J. Kwan: The minister said they aren't set as yet. For the application of this act — section 5(2)(f) — if the matter goes to arbitration, the fees are yet to be set. Would that be done, then, by regulation by the government, or is it just…?

           The centre already has fees that are established for other arbitration issues. I would have thought that those would be the guidelines and fees associated that would apply in this instance. It sounds like that's not the case and that there would be a new set of rules or guidelines, if you will, that would be set up for the purposes of this act, for this section of the act. If that's the case, maybe the minister can clarify. Maybe that's what he's anticipating, and maybe I misunderstood in assuming that the existing rules under the centre would now apply.

           Hon. M. Coell: I'll try to be a little clearer. When we would refer or someone would refer to the domestic commercial arbitration rules and procedures, they would tell us what the fees are. We're using the International Commercial Arbitration Centre. If we referred someone, they actually tell you what the fees are. It wouldn't be us setting a fee. They would be actually setting a fee and telling us what applicable fees we would have to pay.

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           J. Kwan: In other words, is it to say that should there be a dispute and the matter is referred to arbitration, the parties would not know what the fees are until they approached the centre? That seems backwards to me. It would seem to me — given that we now have legislation before us with a section that refers the matter on issues around dispute resolution to arbitration and the centre handles these matters — that the government would actually have a sense of what kinds of fees would apply should a case be referred to arbitration at the centre.

           The parties should have the right to know what fees are involved. Presumably, that information should be available now, because the centre is already in existence and they know of this legislation. They're anticipating that should matters arise from this legislation and be referred to them, they would know what fees to charge. It shouldn't be a surprise to anyone what the fees might be.

           Hon. M. Coell: I think I understand what the member's getting at. This would be a last resort and is a last resort for most parties. The problem is that you don't know how long the arbitration dispute may take, and that may have a further cost to it. If it's something that's settled quite quickly, that may have a much lower cost to it than something that took three weeks of arbitration meetings. That's why I'm having problems. I don't know the B.C. International Commercial Arbitration Centre's schedule of fees and what they charge people, but this would be very common in any arbitration that the two groups would go into. The costs may vary from an initial fee schedule.

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           J. Kwan: That would be contingent on how long the dispute takes to get resolved, and so the duration of time impacts the cost, which I do understand. But if the issue is such that a matter could be resolved….

           Well, maybe let me ask this question. The fee schedule — is it on a daily basis in terms of the use of the arbitrator? Is that how it is being applied? Therefore, the duration — the longer it goes, the more it costs. So on each day it will cost you this much money if the matter is still before the arbitrator. Is that how it's calculated? What is the formula that applies under the schedule now?

           Hon. M. Coell: I think probably the easiest thing for me to do is ask staff to get a fee schedule used by the International Commercial Arbitration Centre. They may have different fee schedules for different types of arbitration as well, and I'll endeavour to get a full copy of all their fee schedules for the member.

           J. Kwan: Thank you very much. How many arbitrators are there now within the centre?

           Hon. M. Coell: The centre is independent from government, and that's why we're using them as an arbitrator. So I don't have that information as to how many arbitrators they would have on staff. I guess that would vary too, depending on the number of arbitrations that were undertaken by the centre.

           J. Kwan: If a matter goes to arbitration then, is it just an assigned arbitrator from the centre? Do the parties have any say in a selection from this list of arbitrators, which was why I asked how many arbitrators there are? Do they get to choose from that list, or how does it work?

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           Hon. M. Coell: Again, it would follow their procedures. What I will do, as well, is get a copy of their procedures for arbitration for the member.

           J. Kwan: Thank you very much. I would appreciate that, just to get a sense of how this thing would work if the matter does go to arbitration. The section of the bill, section 5(2)(f), also refers to issues around provisions for settlement of disputes, as we've been discussing. Aside from arbitration…. Is there any possibility that matters could not be resolved through arbitration? If that's the case, then what is the next course of action?

           Hon. M. Coell: It's my understanding that the parties would be committed to the arbitration procedures and, I guess, bound by that as well.

           J. Kwan: If one party decides to go to the arbitration route, they have to accept the arbitrator's recommendations for resolution. Even if the other party disagrees and they don't want to go to arbitration, they have no choice in the matter. They simply have to accept the recommendations from the arbitrator.

           Hon. M. Coell: The agreement is basically between the ministry or government and the B.C. Safety Authority. Once both parties have signed the agreement, then they're agreeing to go to the British Columbia International Commercial Arbitration Centre and abide by their rules, fees and decisions.

           J. Kwan: Section 5(1) does say: "The minister may enter into an administrative agreement with an authority to administer any provisions of this Act and the regulations." Then sub (2) says, "An administrative agreement must include provisions that specify all of the following" — which includes "provisions for the settlement of disputes."

           Based on the debate now and the answers the minister has provided, the provisions for settlement of disputes would be such that any party could enter into an arbitration process. We don't have to have an agreement of the other party, so any one party could choose that route after they've gone to the deputy minister and there's no resolution.

           Once they enter into the arbitration process, the findings of the arbitrators have to be accepted by both parties. Then that's the end of the matter, so there is no more dispute resolution process after that. Just so that I understand, that is the end of the road. Even if one party does not agree and does not want to go to arbitration, if one side initiates that process, they have no choice in the matter.

           Hon. M. Coell: Yes, that's correct. I think it's important to remember that section 5 has only two partners. It has the safety authority and the government, and they're signing…. Section 5 is those two groups deciding on a way that they will solve disputes if they come up in the future.

           J. Kwan: Well, no. The two ways they can solve disputes that the minister had highlighted is that they can go to the deputy, and after 14 days if the matter is not resolved, they go to arbitration. Those are the ways they have to choose, but within which how they come to resolution on a particular dispute in terms of negotiations is obviously up to the parties themselves.

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           But the choices of where to go with it, where dispute does arise — they don't get to choose that. It's set out in legislation here.

           Hon. M. Coell: The member is essentially correct in that there are a number of ways we want the safety authority and government to attempt to solve disputes. If they have a dispute they cannot solve through the sort of day-to-day process of dispute resolution, then they would have — in the previous time — committed to using this dispute resolution process for more serious disputes, I would say.

           J. Kwan: Under what circumstances, then, would the deputy minister get involved? I understand how arbitrations would be triggered. Under what circum-

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stances would the deputy minister be involved? Would one party initiate a complaint to the deputy minister about an issue that the two parties are trying to resolve, and then the deputy minister would get involved? How would that work?

           Hon. M. Coell: Through the Chair, I wonder if the member could indulge me for a moment. I have some guests in the House. I wonder if I could make an introduction.

           The Chair: Ask leave, minister.

           Hon. M. Coell: I ask leave to make an introduction.

           Leave granted.

Introductions by Members

           Hon. M. Coell: I have in the Legislature this morning 54 grades 4 and 5 students from Brentwood Elementary School in my riding. They have with them five adults and their teachers, Ms. Kirzinger and Ms. Luanne Marchand. Would the House please make them welcome.

Debate Continued

           Hon. M. Coell: The disputes we're discussing here are probably going to take place between staff in the safety authority and staff in the ministry. They would hopefully be able to work those out through the dispute resolution mechanisms at the staff level. As with most dispute resolutions, it's progressive. By the time it got to the deputy minister, at that point is where the deputy would be involved. I suspect, looking at how dispute resolution has worked in the ministry before, you're not going to see disputes go…. I think this piece of dispute resolution mechanism would be very rarely, if ever, used.

           J. Kwan: Fair enough that it may not be utilized a lot, but I want to get a clear understanding of how that process would work, in the case that it does require the provisions under section 5 of this act.

           Staff would be dealing with it on the ministry side, along with the folks on the safety standards side. After a period of time, perhaps there's no movement in terms of trying to resolve the matter. Could it be, then, that either the staff from the ministry can bring the matter to the deputy minister or that the safety standards people could bring the matter to the deputy minister — make a complaint to the deputy minister or whatever — and then the deputy minister will get involved? Or could both parties bring the complaints to the deputy minister, and then the deputy minister would get involved? I'm just trying to get a better understanding of what triggers the involvement of the deputy minister.

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           Hon. M. Coell: Either party can write to the assistant deputy minister or the CEO, and then it's up to them to work together to find a resolution to the dispute. It's not going to be up to the assistant deputy minister to arbitrate it at a settlement. They will work together. If they can't find an agreement, then they send the dispute to the new dispute resolution arbitration centre.

           J. Kwan: Okay. Sorry. The deputy minister, then, is not involved? I thought the minister said earlier that the deputy would be, but it's the assistant deputy minister. So one party — or staff from the ministry or the safety standards folks — could bring a matter to the ADM and to their CEO respectively, and those two parties would come together. If they determine that they can't resolve the matter, then it goes to arbitration. Really, in essence, either side could trigger the process at the early stages. Both parties, the ADM and the CEO, have the right to do that. Any one of them could actually trigger the process for arbitration if the matter is not resolved.

           Hon. M. Coell: The member is correct in her assumptions.

           Section 5 approved.

           On section 6.

           J. Kwan: Section 6 and sections 6(1)(a) through (d) state that even if an administrative agreement with an authority is signed as outlined under section 5, the minister will retain the right to appoint a registrar. The registrar has the right and the authority to issue or to cancel permits. Why is that power not vested with the authority?

           Hon. M. Coell: The difference would be that the safety authority is providing the safety umbrella for the province, and the registrar is providing the governance for the province. They're quite distinct. We want to make sure that the safety authority is doing what they are asked to do, which is safety of the railway system, and the registrar would be looking after fees and permits. If a railroad didn't run for a year, didn't pay its fees or wasn't in compliance with the legislation, that's what the registrar would be doing.

           J. Kwan: Who pays the costs of the registrar? Is it the government, or is it the authority?

           Hon. M. Coell: It is the government.

           J. Kwan: And what sort of accountability measures will the registrar have to abide by?

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           Hon. M. Coell: I think it's simply that the registrar will be a civil servant and report through the ministry and be regulated by all of the public service regulations.

           J. Kwan: A registrar would be an equivalent to what level, then, within the civil service?

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           Hon. M. Coell: An ML4.

           J. Kwan: Who does the registrar report to? Is it the minister?

           Hon. M. Coell: This position really formalizes current tasks of handling permissions under the existing legislation. It won't be a full-time position and will be filled with existing staff. As I said, it's at the ML4 level of the service and will report to a director and then to an assistant deputy minister.

           J. Kwan: It reports to the director and to the ADM and then the deputy and then the minister — sort of up the food chain that way. Okay. All right. That would be the line of accountability with the registrar.

           The position is going to be filled by existing staff within the ministry, the minister says. Was someone just chosen to take up that part-time position? Or was the position posted and then somebody within the ministry applied and ended up being able to provide half- or part-time — however much time is required — to do this task? How did the process take place? What took place in the process within the government to choose the registrar?

           Hon. M. Coell: I think the easy way of looking at this is that this was an assignment of responsibilities. There's no new position being created. There was no one hired. There were a number of people doing the jobs that the registrar will do. Those new responsibilities were all put into one position, but no new person was hired. There's no new registrar. It's still someone who is doing this job. The name has changed. Some of the job requirements have actually just been amalgamated into the position.

           J. Kwan: Someone has been chosen for the position, then. There was no process in terms of a hiring process. It's just someone internal chosen for the job. Who is this individual who has been registered as the registrar under this act?

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           Hon. M. Coell: The registrar is Tracy Green. She was previously the manager of the safety policy and liaison branch. We've taken her job description and added to that as this legislation requires.

           Section 6 approved.

           On section 7.

           J. Kwan: Yes, we just debated section 6. On section 7. Now, this is curious given what we just debated under section 6. Section 7 states: "Delegation does not make authority an agent of the government. An authority to which the administration of any of the provisions of this Act and the regulations are delegated under section 6" — namely the registrar — "is not an agent of the government for the purposes of that administration."

           I must admit this section of the act completely confuses me because I thought we had just established under section 6 that the registrar, in fact, I would interpret to be an agent of the government. The registrar is a civil servant within the ministry categorized under the compensation level of ML4. They report directly to the ADM and to the deputy and then to the minister and, in fact, was someone who has been selected internally to government.

           How would it be that the individual — the registrar — under section 7 is explicitly said not to be an agent of government? Maybe the definition of what an agent of government is differs, but it appears to me, though, section 7 refers to section 6. The only agent that services under section 6 is the registrar.

           Hon. M. Coell: I think the member may misunderstand section 6. What, basically, section 6 does is delegate to the authority the administration of any provision of the act and regulation except the registrar's powers under sections 11 and 12, and then section 7 deals entirely with the safety authority.

           Section 7 approved.

           On section 8.

           J. Kwan: Yes, that clarifies it. So on section 8, section 8(2) states that: "If the minister has entered into an information-sharing agreement with an authority to which the administration of any provisions of the Act or the regulations is delegated under section 6, the minister may disclose or transfer records to, and share records with, the authority in accordance with the agreement."

           Could the minister please advise why the exchange of information is made only optional when the agreement is created?

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           Hon. M. Coell: I think in its simplest form, it's to allow safety inspectors to know the safety history of the different railway operators throughout the province. So we're basically saying: "You have access to all of the safety records of those individual railways." That should give the safety inspectors the history they need in making judgment calls.

           J. Kwan: Is it safe to assume that an agreement would be signed with whoever the providers of the safety standard aspects of things….? There would be an agreement?

           Hon. M. Coell: Yes, that's correct. Delegation cannot happen until the agreement is signed.

           J. Kwan: Okay. Then section 8(3) states that the minister may enter into an information-sharing agreement for the purposes of subsection (2). This means

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that regardless of whether an information-sharing provision is signed as part of the initial administrative agreement as specified under section 5(2)(c), section 8(3) provides the minister a loophole, really, allowing the minister to share information in any event. Am I right in interpreting that under section 8(3)?

           Hon. M. Coell: I think I'd probably use an example here. This one would allow you to have an information-sharing agreement with Transport Canada, so that they would have access to all our safety issues as well.

           J. Kwan: Just so I understand it completely, is it the case that information could only be shared if an agreement is entered into? If no agreement was entered into, then no information could be shared. Am I right to understand this?

           Hon. M. Coell: Under this act, this formalizes the sharing of information. But the Freedom of Information Act is applicable to this as well.

           J. Kwan: Two things the minister said. Yes, FOI applies, and that's good. The other thing the minister says is that this section of the act formalizes the information-sharing process. So then it is the case, though, that if an agreement is not entered into, information still could be shared. Am I right?

           Hon. M. Coell: Simply, this allows for free movement of information so that the parties don't have to use the Freedom of Information Act. Also, it allows information to flow from the authority to the province to the federal government regulatory bodies, and it will happen quickly. I think what we want to do is make sure safety information has a quick flow so that we can make the railways as safe as possible.

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           J. Kwan: I'll tell you why I'm canvassing this area to get a better understanding of how these sections of the act apply.

           Section 5(2) has a provision that says: "An administrative agreement must include provisions that specify all of the following…." Sub-subsection (c) says: "…the right of access of the authority to records created by the government and the right of access of the government to records created by the authority." So there's an agreement under 5(2)(c) that formalizes the process in terms of the purpose of accessing information and records.

           Section 8(3), which is the section we're debating, states that "the minister may enter into an information-sharing agreement for the purposes of subsection (2)" of section 8. Subsection 8(2) states: "If the minister has entered into an information-sharing agreement with an authority to which the administration of any provisions of the Act or the regulations is delegated under section 6, the minister may disclose or transfer records to, and share records with, the authority in accordance with the agreement." Section 6 talks about how, "If the minister enters into an administrative agreement with an authority under section 5…."

           It keeps on referring to previous sections — right? But it all centres around sharing information. If that's the case, why do we need all these other sections when section 5 already specifies that? Section 5(2) has already specified the right of access of the authority to records created by the government and vice versa. Why the duplication? How is it different that it would require an additional section, section 8(3), in addition to 5(2)(c), to talk about the same things — it seems to me — and to do about the same things and the rights to do the same things?

           Hon. M. Coell: I think if you look at section 5, it's part of the administrative agreement. That's necessary. But we also need a legislative authority, and this section, section 8, is there because B.C. legislation forbids the transfer and disclosure of government records unless authorized in an enactment. One is the administrative authority. The other is the legislative authority.

           J. Kwan: Is there any way in which information could be shared without these agreements being entered into?

           Hon. M. Coell: I think what we're trying to do is make sure there are no impediments to the sharing of information that would affect safety. You could use the Freedom of Information Act, but I think we're going to have a good working relationship. You don't want to have to be doing that because of the lengthy time. We want to make sure that incident information is transferred very quickly from the federal government to the provincial government to the safety authority. I think that gives us that very quick, easy flow of information. I think it's important that the safety authority has that information as well.

           J. Kwan: Okay. If that's the case, and it's to facilitate information-sharing for the purposes of safety, then why is the language such that in both sections of the act — section 5 and section 8 — the language is "may" and not "shall"?

           One would assume, then, that an agreement must be entered into in order to facilitate information-sharing and that you would actually ensure that that process takes place immediately with the authority — at those agreements would be signed immediately and the legislation would actually say that. But it doesn't. It uses the language "may." "The minister may enter into an administrative agreement…." "The minister may enter into an information-sharing agreement…."

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           That would appear to me to contradict the notion of ensuring that information is shared in a speedy way, in a way that protects safety standards. Why the language "may"?

           Hon. M. Coell: In section 5 the wording is "must." That's pretty straightforward. They "must include pro-

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visions." In this one, the word "may" is because we may disclose, we may transfer or we may share — or we may do all three.

           J. Kwan: No, but section 5(2) only states, if an agreement is entered into, what it must contain. Those are the things that have to be included in an administrative agreement. Prior to that in section 5(1) it actually reads: "The minister may enter into an administrative agreement with an authority to administer any provisions of this Act and the regulations." So 5(2) only states what that administrative act includes, if an administrative act is entered into. The language "may" is used under 5(1), and the language "may" is also used under 8(3).

           The other concern I have…. I'm not trying to be sticky about language here, but if the purpose of the act is to ensure that information is shared and that you do that for the purposes of public safety and safety standards, then it would seem to me the language should be stronger. If 8(3) was not designed…. That could be construed as a loophole that would allow the minister to share information without entering into an agreement. Then the language again would be such that the minister must enter into, shall enter into, but not may enter into. Yet the language is very specific, and I would imagine that the words chosen for the legislation are chosen for a specific reason.

           Another example I want to highlight, of course, is with the Minister of Agriculture, Food and Fisheries, in his incident where he released highly sensitive and, I would venture to say, confidential information to a fish farm owner that, in my view, compromised an investigation. The minister shared information with a fish farm operator, in my view, in an inappropriate way and basically caused problems for the ministry and then ended up, I think, discrediting the government as well as the fish farm industry.

           I'm trying to make sure there is no language that would allow for those kinds of incidents that in fact did take place with another ministry, where the sharing of information in an informal manner could compromise something sensitive around safety standards for the government as well as for the people of British Columbia.

           Hon. M. Coell: Basically, we're looking at an agreement between the safety authority and the province. Both of those entities are governed by the freedom-of-information and privacy act. What we want to do in many instances is make sure that there is a transfer of information, agreement between those two parties and, again, that that information can be transferred to the federal safety authorities, as well, on incidents, on safety records. It isn't for sharing information outside those bodies. Those bodies have pretty strict legislative requirements and freedom-of-information and privacy requirements — both the same.

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           J. Kwan: I understand that, except that section 8(3) uses the language that allows for an agreement to be entered into or not. Section 5 also uses the language that says you "may" enter into an administrative agreement. Whether it be for administrative purposes or for legislative purposes, the language is such that the parties could choose to decide whether or not they want to enter into the agreement. If that is not the intent of the government and the minister — and that is, for the parties to enter into an agreement and therefore facilitate the flow of sharing information for the purpose of ensuring safety standards are met and safety is protected ultimately — then the language should be such that the parties must enter into these agreements. Yet it doesn't say that. That's why it just seems contradictory to me — the language in the legislation versus, it appears to me, the intent of the government based on the minister's answers.

           Hon. M. Coell: When you say that the minister "may" enter into an agreement, and then if you enter an agreement, you must have all of the things that are in 5(2)…. But the province could still administer this new act. That's why the minister "may" enter into an agreement. The province could keep this and administer it or delegate it to the safety authority, which is the intention.

           J. Kwan: So the minister, then, is saying that the reason why the language "may" is adopted is that there is still the possibility where the government may choose not to have an authority undertake the responsibilities under the Railway Safety Act. The government themselves may still undertake those responsibilities, if that's why the language is "may." If the government chooses to go the route of having an authority to oversee the responsibilities under the Railway Safety Act, then in that instance where an authority is in place, an agreement must be entered into. On both instances for section 5 and section 8, an agreement must be entered into.

           Hon. M. Coell: Yes, that's correct. I think what it does is allow future governments, further out in the future, the opportunity and ability to change what they're doing.

           J. Kwan: To the minister: that actually does clarify the reasons why in terms of the language, and I didn't catch that in reading the legislation.

           That concludes my questions for section 8, and then I'm prepared to go to section 9.

           Section 8 approved.

           On section 9.

           J. Kwan: Section 9 deals with the adoption of other provisions, and it states: "The minister may adopt by regulation provisions of (a) the Railway Safety Act (Canada), the Canadian Transportation Accident Investigation and Safety Board Act, the Canada Transportation Act and the Transportation Appeal Tribunal of

[ Page 9878 ]

Canada Act." Could the minister please advise how this would be done? Would it be done by OIC?

           [K. Stewart in the chair.]

           Hon. M. Coell: It would be a ministerial order.

           J. Kwan: Who decides what provisions of the act are suitable to be adopted? Is it the minister?

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           Hon. M. Coell: These are highly technical acts. We would be taking the acts — the whole federal act — and I have got them all here.

           J. Kwan: Mr. Chair, there is actually one instance where I don't want more paperwork, and it would be with respect to those acts. Thank you for the offer, though — I think.

           Still, though I understand it is very technical and so on, who decides the provisions of the act are suitable to be adopted? Is it the government? Ultimately, the minister? Does it have to go to cabinet, as an example? Who makes that authority? Who has that authority?

           Hon. M. Coell: The authority rests with the minister, but for the acts we're dealing with, we will be taking them, and they will just become part of our policy and law. And we will have a seat on the technical committee nationally. We're the last province to do this. There are seven provinces with railways that have all adopted the same, so you've got a national framework for safety. This has actually been in the works since, I think, about 1998. It has been going through government. The authority rests with the minister, but it will be the same sets of policy frameworks that all the other seven provinces have as well.

           J. Kwan: Section 9(1)(c) states that "a code or standard regarding railway safety established by any other standard making body" can be adopted by the minister. Can the minister name some of the standard-making bodies this clause refers to?

           Hon. M. Coell: This gives us room in the future for possible safety standards for future light rail rapid transit that would have a standard-making body different than Vancouver's or the federal legislation.

           J. Kwan: So there are no standard-making bodies at the moment that would fall under this section of the act, but for the future there might be. Just in case, if there are, this allows for it.

           Hon. M. Coell: That is correct.

           Sections 9 and 10 approved.

           On section 11.

           J. Kwan: Section 11(2) states: "If the registrar issues a permit, the registrar may (a) exempt the permit holder from the application of any adopted provisions or from a regulation or any part of a regulation made under section 9 (2) (b), or from both, and (b) establish terms and conditions that apply to the permit."

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           This means that the registrar, who has the right to issue permits, can when issuing permits exempt parts of the legislation as she sees fit. The registrar can basically delete any safety standards, yet we don't know what these standards are at this time when the registrar issues permits. That's my logic so far in reading this section of the act and this legislation. If that's correct, how is the system supposed to ensure that safety standards will ensue if that is the case?

           Hon. M. Coell: A new railway would be…. All of these provisions would be part of their safety responsibilities. What would be exempted are the provisions in these new safety acts that would apply to something like SkyTrain that is different than rail. There would be parts of these that don't apply to a SkyTrain or, I would imagine, to the couple of dozen recreational tourist railways that are the smaller ones around the province. There may be things in here that just don't apply to them.

           J. Kwan: So in the case of CN Rail, all of the legislation and the federal acts would apply for the major railways, as an example? The only ones that are exempted would be what the minister calls "small rails" that exist around the province and the SkyTrain. Am I right to understand that? All the standards, then, that would apply for all the other major railway companies — we now know what they are. They are all the federal provisions the minister just highlighted and which are also named in this act in the previous section.

           Hon. M. Coell: At present we only regulate provincial railways, and there are some 40-odd of those. CP, CN and Burlington Northern are all regulated now federally, because they're seen as national railroads.

           J. Kwan: So this would apply, and that's the question for British Columbia…. The standards that would apply, though, for British Columbia railways would be the acts that have been listed under section 9 of this act.

           Hon. M. Coell: That's correct. Everything would apply to the common carriers — SkyTrain, B.C. Transit. There would be some that would not apply, and then with the industrial railways, there would be some that don't apply as well.

           J. Kwan: On the permit-issuing issue, will the minister have any oversight into how permits are issued?

           Hon. M. Coell: It would be an administrative process within the ministry, and the minister would ultimately be responsible.

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           J. Kwan: So in other words, if there was a complaint about the approval of a permit — and vice versa,

[ Page 9879 ]

the cancellation, which I know is the following section, section 12 — or suspension of a permit…. If a complaint comes about from a decision from the registrar, then the individual could presumably bring the matter to the director, then to the ADM, then to the DM and then to the minister. Is that how it would flow in terms of those matters?

           Hon. M. Coell: Yes, that's true. It's actually spelled out in section 13, I think, in more detail.

           J. Kwan: Yes, and I have questions under section 13 as well.

           I just want to sort of establish basically that the minister actually does have an oversight role really, at the end of the day, in how permits are issued. That would be the system of accountability, if you will, for registrars in terms of issuing permits. The accountability at the end of the day still falls with the minister.

           Hon. M. Coell: That is correct.

           J. Kwan: Are there guidelines that the government has established or will establish for the purposes of issuing permits — and therefore is not subject to criticism or perhaps backroom deals? I know they have really plagued the government in a way, especially with the selling of B.C. Rail and those issues of great concern to British Columbians. We want, of course, to make sure the permitting process is by no means under any light or possible light of potential backroom deals or corruption.

           Hon. M. Coell: These would only be safety permits, and there would be a procedure in place that would be public.

           Sections 11 and 12 approved.

           On section 13.

           J. Kwan: Section 13(1) states that a railway company can apply to the deputy minister for a reconsideration of a decision made in section 11(1) or (2) or 12(3). Is this part of a dispute resolution process for disputing issuing of permits, suspension of permits or cancellation of permits — that to resolve those kinds of disputes of decisions made by the registrar, it goes to the deputy minister for reconsideration?

           Hon. M. Coell: This is part of the administrative justice office recommendations. It basically just allows someone…. The changes there that are made…. You want to allow someone to have a hearing. If they disagree with the registrar's decisions, which are pretty cut and dried or black and white, you want a method for someone to at least have a hearing.

           J. Kwan: Okay. So the minister says that if there is a disagreement with the registrar, this allows for another place to bring the matters to, and that would be to the deputy minister. Under section 13(c) of the act, it states: "On receiving an application, the deputy minister must (a) consider the matter; (b) affirm, change or rescind the decision of the registrar; and (c) notify the railway company in writing of the result of the reconsideration."

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           It doesn't say or outline what process the deputy minister would follow himself or herself, but rather just says that the deputy minister has to reconsider the matter. Nothing is said about the rules which would apply for the reconsideration of the deputy minister, yet the deputy minister has the authority to change or rescind the decision. There is an issue about potential objectivity around this appeal process. Why wouldn't it be outlined in the legislation? Or is the minister going to be working on regulations on when matters could be reviewed and reconsidered and under what conditions a decision would be overturned?

           Hon. M. Coell: It all focuses around: can the railway run in a safe manner? The deputy would be using the same criteria to review the complaint as the registrar used to make their decision.

           J. Kwan: Are there any other appeal processes built into this system of administration or the system of administering safety standards?

           Hon. M. Coell: This is the administrative process or the legislative process. Staff would have the Public Service Act, which has dispute resolution in it. I suspect if someone felt that they had not seen justice, they could see the minister. I guess they could see the court system, if they wished, as well.

           J. Kwan: Would the process of arbitration apply for the purposes of cancellation, suspension and issuing of permits?

           Hon. M. Coell: It was the recommendation of the administrative justice office that because these are so clear, that wouldn't be needed.

           J. Kwan: On these matters then, the bottom line really rests with the minister. It goes to the deputy, and then if people are not happy with it, they can bring it to the minister. The minister presumably will review the matter, and that's the final decision.

           Hon. M. Coell: I think that if someone felt this act had done them wrong, they could go to the courts. They also could go to the ombudsman. There are a number of different areas. I think the reality is that these things are so clear that the decisions are going to be quite easily made.

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           Section 13 approved.

           On section 14.

           J. Kwan: Section 14 states: "Section 5 of the Offence Act does not apply to this Act or the regulations." Then

[ Page 9880 ]

if you go to section 5 of the Offence Act, it states, "General offence. A person who contravenes an enactment by doing an act that it forbids, or omitting to do an act that it requires to be done, commits an offence against the enactment," which seems to me pretty applicable and pretty simple. Why does this part of the Offence Act not apply to the Railway Safety Act?

           Hon. M. Coell: I think that as we go forward, what we've done is outline what offences are to this act for corporations. That would be sections 15 and 16 which deal with that. That's how offences are dealt with in this act. Staff tell me it's quite common for legislation to do that.

           J. Kwan: Yes, I know that from time to time, legislation sets out its own parameters in terms of what is deemed to be an offence and the sanctions that accompany the offence. This act, though, purposely goes out of the way to exempt contraventions relating to the safety standards in railways. To purposely exempt the Offence Act is strange, really, because the Offence Act's language is very clear and concise. It states that if a person "contravenes an enactment by doing an act that it forbids, or omitting to do an act that it requires to be done," that person then has committed an offence against the enactment.

           The Offence Act does not apply. If a railway company contravenes the Railway Safety Act, the Offence Act does not apply and does not deem that they are committing an offence against the act. The contravention provisions outlined in section 16, and so on, deal with that — sections 15 and 16. I have a number of questions around those sections, and I'll get to them when we get to those sections of the bill. For the time being, because the Offence Act does not apply, is a contravention of the Railway Safety Act punishable by law, then?

           Hon. M. Coell: Yes, it is, under section 15.

           J. Kwan: Can railway companies be taken to court over the contravention of the Railway Safety Act?

           Hon. M. Coell: Yes, that is correct.

           J. Kwan: What will a contravention of the Railway Safety Act be called then, if it is not an offence? What may one call it?

           Hon. M. Coell: It actually is an offence under section 15 and would be called an offence.

           Section 14 approved.

           On section 15.

           J. Kwan: Section 15 states the criteria for an offence being committed. It states: "A person who does one or more of the following commits an offence: (a) operates a railway without a valid permit issued under section 11; (b) contravenes, or fails to comply with, an adopted provision or a minister's order or directive made under an adopted provision; (c) contravenes, or fails to comply with, an order or a directive of a railway safety inspector made under a provision adopted under section 4."

           If you go to section 4, section 4 states that the minister "may appoint any person as a railway safety inspector for the purposes of this Act" and that railway safety inspectors "are subject to and have the powers and obligations set out in the provisions adopted under subsection (3)" and that the minister "may adopt by regulation provisions of the Railway Safety Act (Canada) for the purposes of subsection (2) and may prescribe changes to those provisions."

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           That's what defines contravention, if you will, or offence under section 15. Yet section 14 has just exempted the Offence Act from applying. Then the minister says that a contravention of the Railway Safety Act is punishable by law and that the matters can go to court over these issues. But section 15(b) says that the contravention of a minister's order or a directive of a railway safety inspector will result in offence. If my understanding is correct in following all of this logic, subsections 15(b) and (c) say that if a railway company disobeys a minister or safety inspector, an offence is committed. However, if safety standards themselves as prescribed by this act are not followed, an offence is not committed under section 14.

           If that logic is right, then I actually worry about this section of the act. It doesn't seem to make sense to me, if that's correct in terms of my interpretation of it.

           Hon. M. Coell: In section 14 the legislation says the Offence Act doesn't apply. Then what we do is create in 15 and 16 basically an offence act for this. Then it would be, when you say a person does one or more of the following: commits an offence, contravenes, fails to comply to any adopted provisions…. Well, these are the adopted provisions here — the federal regulations. It's quite technical in nature and quite extensive. If someone contravenes or fails to comply with the provisions in these federal acts, they commit an offence.

           J. Kwan: So section 9, which refers to all these federal acts, would apply. But nowhere, in my reading of the bill under the section of the offence, does it say that a contravention of section 9 then becomes an offence.

           Hon. M. Coell: I draw the member's attention to the words "an adopted provision." These will become the adopted provision.

           Section 15 approved.

           On section 16.

           J. Kwan: Section 16(1) states that an employee, director or agent of a corporation is considered to have committed an offence regardless of whether the corpo-

[ Page 9881 ]

ration is prosecuted or convicted. I understand this to mean that an employee of any corporation can be considered to have committed an offence. Is that correct? Does this mean that an employee could be prosecuted while the company may not be?

           Hon. M. Coell: I'm not sure I understand the member's question, but if an employee was to commit a criminal act, yes, they would be prosecuted.

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           J. Kwan: For the purposes of this act, we're talking about an offence as prescribed under sections 15 and 16. That would be what the minister calls a criminal act, a contravention of all the acts listed under section 9, that is committed by the employee. So the employee in that instance would be prosecuted, and the company may not be?

           Hon. M. Coell: In reading section 16(1) and (2), the employee and the corporation are tied together.

           J. Kwan: Well, no, actually. In reading section 16(1), this is the language used in it: "If a corporation commits an offence under this Act, an employee, officer, director or agent of the corporation who authorized, permitted or acquiesced in the offence also commits that offence, whether or not the corporation is prosecuted or convicted."

           Subsection (2) goes on to say: "In a prosecution for an offence under this Act or the regulations, it is sufficient proof of the offence to establish that it was committed by an employee, officer, director or agent of the defendant."

           It actually explicitly says that employees, officers, directors or agents of the corporation are deemed to have committed an offence if they do something in contravention of this act and the acts which were referred to under section 9, but it also states, though, that the corporation may not be prosecuted or convicted. In other words, offences could be laid or charged against an employee, but it could also be the case that offences not be charged against the corporation. That would seem to me a strange way of doing things. Normally it is the employees who report, etc., up the food chain to the corporation. Ultimately, the corporation also has to take responsibility and not just pass the buck to say: "Well, it was the employee who offended, not the corporation." It seems to me that section 6 allows for that.

           Hon. M. Coell: This is actually quite a common structure. I think if you go down to subsection (3), you see that: "Subsection (2) applies whether or not the employee, officer, director or agent is identified or has been prosecuted for the offence, but that subsection does not apply if the defendant establishes that (a) the offence was committed without the defendant's knowledge or consent, or (b) the defendant exercised due diligence to prevent commission of the offence." I think that saves whole what the member is suggesting.

           J. Kwan: In other words, if the company says, "I did not authorize that employee to do such-and-such acts that contravened this bill or the acts outlined under section 9 and had no knowledge of it," then the company can say: "Don't prosecute us. We're not involved in the offence. Go and prosecute the employee." So ignorance is a defence in this instance. That's one.

           Second, if the defendant exercised due diligence to prevent commission of the offence — that is to say, if the company tried to stop the employee from committing a violation — that would also be sufficient as a defence against a charge for the company. That's my interpretation, then, of what the minister said and what is in the act.

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           Hon. M. Coell: Let me try this. Section 16, "Offences by Corporations." Corporate directors and officers are liable for offences committed by a railway company. It provides that proof that an offence was committed by an employee or agent of a railway company is sufficient proof that an offence was committed by an accused railway company. As I say, I believe this is fairly standard.

           The significance is that vicarious liability of the railway company need not be established if there is sufficient proof that the offence was committed by an agent or an employee. It provides that a director or an officer who acquiesces in an offence committed by a corporation also commits that offence. I don't know whether that helps.

           J. Kwan: The part where I do have a problem with this section of the act is under section 16(1) where it states: "…whether or not the corporation is prosecuted or convicted." In essence, what this allows is for a corporation to walk away from being prosecuted if an employee or an officer, director or agent of the corporation is deemed to be responsible.

           An employee could be prosecuted, while the company may not be. That's the issue I take with this section of the act, which allows for that kind of procedure to be followed. It would seem to me that if an employee who is working for that company committed an offence, the company should also have a level of responsibility for the commission of an offence.

           Hon. M. Coell: Actually, I think it's probably the opposite of what the member is suggesting. This is providing the employees with their safety, as you have to have proof that they did something wrong so that the corporation can't not take responsibility for its role. I think we might want to talk about this a little further, but I think it's the opposite of what the member is suggesting. I think this gives safety to employees in that they know they cannot be charged unless there is significant proof that they have done

[ Page 9882 ]

something wrong knowingly, whereas the corporation has a responsibility.

           J. Kwan: Maybe it's just my inability to read the act, because when I read section 16, it doesn't say that for me. I trust that the minister has legal advice, and the legislative counsel has advised the minister that the language, which I have read and put on record, in fact does what the minister says and not what I said. On that basis, I will take the minister's word for it.

           Maybe it's because I don't have the legal background to fully understand the language, but it just seems to me that it's the reverse. As I said, I'll take the minister's word for it, because he does have legal advice from his staff that in fact there is protection for the employees and not the other way around — protection for the corporation. In that case, I will take the minister's word for it, and I am prepared to move on to section 18.

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           Sections 16 and 17 approved.

           On section 18.

           J. Kwan: Section 18(1) through (5) outlines the penalty and the fine amounts. Could the minister advise how these penalties differ from penalty amounts in the past?

           Hon. M. Coell: These penalties are now harmonized with the Safety Standards Act.

           J. Kwan: How do they compare with the past?

           Hon. M. Coell: I will have to get back to the member on that. I don't have that information with me.

           J. Kwan: According to this section, individuals and corporations are to be fined different amounts for offences. What is the process by which an individual or a corporation would be decided responsible for an offence?

           Hon. M. Coell: These are just set out in the act as maximum fines, but the courts would settle as to what amounts.

           J. Kwan: Can the minister provide examples in which an individual and a corporation might be found to be culpable of an offence?

           Hon. M. Coell: Again, I think the answer is that we're trying to harmonize with the Safety Standards Act provisions so that they're all similar.

           Section 18 approved.

           On section 19.

           J. Kwan: Section 19(1) says the authority can set fees. Subsection (2) says the fee-setting process will be set by the minister by regulation. What sort of things would be considered in the fee-setting process when the minister is dealing with this matter in regulation?

           Hon. M. Coell: It would be a consultation with stakeholders and then a time period. A notice period would be given as well.

           J. Kwan: Stakeholders would mean rail companies for sure and members of the public as well, presumably, because they're the people who utilize the service provided by the rail companies. Am I right to make that assumption?

           Hon. M. Coell: The consultation would be with the railways, because they're actually paying the safety fees.

           J. Kwan: I see. The logic, of course, is that the safety fees will be passed on to the consumers, but the consumers won't be consulted in this process. Is that correct?

           Hon. M. Coell: That's correct, but safety fees are such a tiny amount of their operating costs that in the past I think it has just been negotiated in a time frame given for increases in safety fees.

           J. Kwan: Is it right to assume it could be less but no more than the cost recovery?

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           Hon. M. Coell: Cost recovery is the model we're working on.

           J. Kwan: Fees would be administered and collected by the registrar. Is that how that would work administratively?

           Hon. M. Coell: The B.C. Safety Authority will actually set the fees and collect the fees.

           J. Kwan: Where would the money go after it has been collected?

           Hon. M. Coell: The B.C. Safety Authority is a not-for-profit corporation, so it would stay with them.

           Sections 19 to 22 inclusive approved.

           On section 23.

           J. Kwan: I have a couple of questions on section 23. Section 23(1) talks about how regulations can be imposed to deal with "transitional difficulties." Does the minister have any idea as to what sorts of transitional difficulties might emerge that would require regulation?

[ Page 9883 ]

           Hon. M. Coell: The process of doing this, as one of my staff members mentioned, was sort of modernizing the system from the Last Spike till today. There are actually some documents that go back to the early 1900s, which we'll want to have a pretty close look at.

           J. Kwan: It sounds to me like the phone book legislation that used to be in place with the municipalities. All right.

           My last question is this. Section 23 also outlines the transition to this new structure. It does not, however, provide for a specific date, although in subsection (3) it does provide a date of April 1, 2007, as the time in which subsections (1) and (2) are to be repealed. Is it then correct to assume that the timing of this transition to the new structure would likely begin on April 1, 2007, when the sections are repealed, or is there some other time line we're looking at?

           Hon. M. Coell: In section 24 it is April 1, 2005. All railways would have had to apply for a permit at that date.

           J. Kwan: The last question, then. Is the April 2005 date when this regulation would apply, or is that just the permit component?

           Hon. M. Coell: Yes, that's correct. That's just the permit. Then we have the subsequent two years to make sure the authority can take care of any extremely old….

           Sections 23 to 34 inclusive approved.

           Title approved.

           Hon. M. Coell: Mr. Chair, I move the committee rise and report the bill complete without amendment.

           Motion approved.

           The committee rose at 11:59 a.m.

           The House resumed; J. Weisbeck in the chair.

Report and
Third Reading of Bills

           Bill 20, Railway Safety Act, reported complete without amendment, read a third time and passed.

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

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           Hon. G. Bruce moved adjournment of the House.

           Motion approved.

           Deputy Speaker: The House stands adjourned until 2 o'clock today.

           The House adjourned at 12:01 p.m.


Committee of Supply

           The House in Committee of Supply A; G. Trumper in the chair.

           The committee met at 10:09 a.m.


           On vote 31: ministry operations, $478,891,000 (continued).

           J. MacPhail: We left off yesterday talking about gaming. The Solicitor General gave an overview on what I'm interpreting as the reasons why he and his government have made changes in gaming that have led to increased revenue — changes in expanded hours, expanded slots, expanded gaming tables and now interactive video-based machines, which we all know and he himself would probably say, yes, they are video lottery terminals now in existence.


           I know that the Solicitor General, in perhaps a more forthright way than many others would do, has said: "Yes, some will interpret this as expanded gaming, but we have to change with the times and allow adults to make free choices." I interpreted that to mean…. I'm not going to put words in the Solicitor General's mouth. One could, based on his comments, come to the conclusion: "Well, what's wrong with that?"

           The reason why I'm asking these questions is because he and his current government hammered the previous government, when we were in power and they were in opposition, saying expansion of gaming was bad. There were no ifs, ands or buts about it. There wasn't anybody inside the Liberal caucus breaking away, saying: "Hey, you know, wait a second. Everybody's an adult. Hey, wait a second. It makes sense to expand hours. Hey, wait a second. It's a good way to raise revenue."

           Here's what they all said day after day, and I'm just going to name a couple of incidents in which they said that. They said they'd developed a new-era promise to stop the expansion of gambling that has increased gambling addiction and put new strains on families. That was a new-era promise: stop the expansion of gambling that has increased gambling addiction. Maybe the minister is going to stand up and say: "Well, no, no. There are certain kinds of gambling that don't lead to addiction." I can hardly wait for those studies to be produced.

[ Page 9884 ]

           That was what the previous Liberal Party said. Then they campaigned on that, and people believed them. It does kind of make the whole new-era document silly — absolutely, silly. It continues to make that new-era document silly.

           Here are some of the incidents that arose. The city of Surrey and the city of Vancouver sued my government over gaming — sued my government — and we backed off. In fact, we did more than back off. We changed the way expansion of gaming was going to take place, and we said that the cities and municipalities had to approve any gaming — not even expansion of gaming — even if it was a relocation.

           We never promised not to expand gaming, by the way. Nobody can stand up and say: "Well, you expanded gaming." Yes, we did, and the Liberals fought us every single step of the way. In fact, when we finally did put a cap on how we were going to expand gaming, the Liberals when they were in government then turned around and said: "Oh, well, that cap on gaming had some vague promises, some maybe promises to some casinos and gaming institutions that we couldn't possibly now break those vague promises." There were no contracts, by the way. They now use those reasons to expand gaming.

           It is very interesting. The city of Surrey is now allowing slots. Nothing's changed. Doug McCallum, the mayor — that good Liberal Doug McCallum — fought my previous government, the NDP, like crazy against slots. Now his government is in power and slots are A-Okay.

           In Vancouver we are going through a very, very challenging but fulsome debate around slots, and I'll be asking the minister questions about that as it pertains to my own riding and Hastings Park in a moment.

           These are reasons why I'm asking these questions. Every time gaming would come up inside the Legislature from 1996 to 2001, the Liberal MLAs would stand up and rail about addiction — what was this government doing to combat gaming addiction? What awful people we were for expanding gaming. Then it turns out that we had nothing on this government — absolutely nothing on this government, in terms of expansion of gaming.


           However, I must say that the Solicitor General is not the enemy here. He's actually, in his comments yesterday, I thought, fairly fulsome — very fulsome. I'm not sure whether Martyn Brown has seen those comments, to be frank. But it is the rest of his caucus who are hypocritical at best.

           The former Liberal MLA members who were from the Tri-Cities, for instance, who now have expanded gaming in those cities, were railing against the previous government about expansion of gaming. The MLAs from Surrey — same thing. Those are my comments, and that's the reason why I'm asking these questions about expanded gaming.

           A recent Vancouver Sun article indicates that the B.C. Lottery Corporation is planning to increase gaming revenues even further. Can the Solicitor General tell us how Lottery Corp. is planning to increase its revenues even further and by how much?

           Hon. R. Coleman: I'll walk her through that in just a second, but I just wanted to clarify from last night's discussion her comment about the fact there were 2,400 slot machines when her government left office. There were 905 in process: 300 that were going into the Coquitlam relocation that was already underway; View Royal was underway; Cranbrook, which was underway; and the Billy Barker. That's neither here nor there, but that's how, when I said there were 3,300 and then we've been taking it up from 3,300…. That's where I got my number from.

           The way they're going to do this is this: they're going to continue to relocate casinos. The member is aware of the infrastructure of gaming as it sort of evolved through governments. As I said yesterday, I have no criticism of what may have gone on before, because I think we learn as we go, whether it be the destination experience or whatever the case may be.

           I think the move that was, as the member said…. When Surrey actually sued the government, they relocated that casino to Coquitlam, and a new modern casino was built in Coquitlam. That's actually where that service provider moved to at that time. When they moved there, I think that started an evolution with regards to gaming in B.C., where people started to figure out that if you relocated a facility in a proper traffic area, in a modern building that actually attracted people, you'd not just attract people locally but you'd attract people from outside of the province, as well, when they were in the area.

           That led to, frankly, a look, as we became government, at the Lottery Corporation. As we looked at it…. We looked at a couple of areas. If you look at the city of New Westminster, you had two casinos: one at the Royal Towers and one down on the water. The one down on the water was a destination casino that never, ever got to the point where it did the rest of its destination. Neither one of those was a particularly good performer as a facility, so there's now the opportunity that they're looking at relocating those casinos into one over at Queensborough along the Westminster Highway area, near where the Wal-Mart is, I think it is.

           There's a relocation under consideration in Burnaby. Of course, the same thing, as the member described earlier…. Each one of these, just so we're clear, cannot take place unless they have the approval of local government. We will not put any type of electronic gaming like slot machines in a community without approval from local government. That was a policy — and a correct policy, frankly — that the previous government put in place and that we continued. We're not going to vary from that, because I think it is a local government decision.

           I've seen two local governments take it in two different ways in my riding. In Langley township they do not want slot machines in Langley city. They decided they wanted to have one of the relocations of one of the

[ Page 9885 ]

Gateway casinos into their community, and they've gone through their process there.


           But as we relocate, there are a number of things that will happen, as we saw it with the per-dollar machine increase when we did Coquitlam. That is, as you relocate to a better location and you actually size the casino to marketplace, you get a better return on your money and it affects everybody's profits, whether it be the corporation's or the service provider's who has to make a significant investment in infrastructure in order to do it. Like I said yesterday, I expect that we'll probably end up with fewer casinos in British Columbia but certainly with more slots than when we took office in '01-02. I'm not going to try and couch that any other way than that's exactly what's happening.

           Up in Prince George there's a casino that was relatively marginal. It is now being relocated up to a better location on the highway by a process they went through with the local government. It will have more slots in it than it did when it was downtown. The results of that casino…. There's obviously some other economic development around it because there's quite a large tract of land that seems is going to be developed as a result of it, possibly for the benefit of the community.

           That's how we're going to get there. The one thing we do know with regard to gaming, as far as the corporation is concerned, is that lotteries are pretty flat. We do make about 50 percent of our profit today on lotteries, such as the 6/49, Scratch and Wins and those sorts of things. Having said that, there are some looks at the Western Canada Lottery Corporation and the lottery people across the country at how they can sort of look at how they're going to reinvigorate some of those games. One of the thoughts is that they may go in June to having the ticket price for 6/49, for instance, at $2 versus $1, because there hasn't been a price change on that ticket in many years, probably right from the very beginning. It's been out there a long time, as the member knows.

           It's a difficult balance. Frankly, I'm sure there will be a lot of people that will say we have broken a new-era commitment, as we describe it in the New Era. I think some people will say that as soon as you modernize and build one, you've expanded. I think there's some validity to that argument that some people may have. At the same time, I think if we say to the corporation, "Stay within this envelope. Go do your business," which is what they're doing, "but size to market,"….

           I mean, I don't know why…. I think one of the mistakes we make or have made is to successively, whatever government it is, think that we should actually try and dictate the marketplace to a Crown corporation. I mean, we ask them to do a job. We should give them the conduct and management of something and say: "You go do your business." Frankly, when you've got this package — there were 22 casinos — we don't want any more than 22 casinos in B.C. "Now go size to marketplace." As a result of that, we're actually finding we don't have the capacity in B.C. for 22 casinos — not 22 legitimate casinos — because they don't work.

           People like, places like…. My member from up north asked about Granisle yesterday — completely uneconomical, unfeasible. It's the same thing with people that have been asking in places like Williams Lake — completely uneconomical. It's not something that can work because the infrastructure and costs for a casino — all the cameras and stuff because of the card games and the supervision and the training — are extensive for that type of an operation and really can only be sized to a market, as I understand it, with a catchment area of about 75,000 to 80,000 people. That's probably the minimum we should be working within with regard to a casino. That's the business we've asked the corporation to do.

           I'm not disagreeing with the member. Certainly, when we were in opposition, we did rail about the subject. I was no different, frankly, in opposition. I now have responsibility for the corporation and what I think is their proper conduct and management of the business at the same time as having some responsibility to the whole issue in and around problem gaming, which we've doubled the money to, to have some access for people and some education out there so that we can try and address those issues as we complete this modernization.

           I would hope no government, whether it be this one or another one that follows us at some point in time, would ever consider VLTs in bars, however, or in hotels simply because it is clear that is one of the higher levels of problems with regard to gaming in other jurisdictions, as we've talked to people. Casinos — they actually make a choice to go out for entertainment. They go to a specific location. The other ones catch you wherever you're walking, whether you're walking through the bar or whether you're walking through a hotel lobby and what have you. I don't personally, as a minister, support that, and at no time have we actually had a discussion other than when we were looking at gaming. They identified VLTs, and right away the whole answer was no. I mean, we're not interested in putting those in bars and hotels.


           I think the description I've given with regard to gaming…. The member's interpretation will probably be that we're expanding gaming. Frankly, she's entitled to that interpretation. As soon as we have more than the number of slots that were there when we became government, people are going to identify that as an expansion of gaming.

           My concern in and around some of this, though, is that if you take a look at the bingo sector, for instance, we have an agreement with charities, and we need to modernize the bingo sector and actually protect that long-term revenue to charities. We're not going to accomplish that if we are only to stay with paper bingo, which has already been changed in some areas with some electronic bingo as well.

           I think we have to be cognizant of the fact that the corporation has to manage within an envelope, but they have to modernize, and they have to, obviously…. We're asking them, like any other government, to make sure that they're giving a proper return to government.

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           J. MacPhail: In the expansion of gaming that this government is carrying out, they're doing it under the guise of making sure that the privately owned casino companies make a profit. That's what this is all about. It's an expansion. The government is defining it as a consolidation to make sure the capacity of marketplace is fulfilled. That means the government is working hand-in-glove with the publicly held but privately operated casinos to make sure they can change their business plans to ensure that their profit is maximized. The minister is being very forthright about that. Great. It's an expansion of gaming, and that's why the casino companies are issuing their annual statements to say: "Thank you, government. We're making a bigger profit because of this government as you expand gaming."

           It's not just slots. It's hours. It's the gaming tables. It's a whole raft of changes that allow the government to increase by 40…. No, actually, the corporation was making $600 million in 2001, and they'll be making $1 billion in '06-07. So 400 over 600 — what's that? It's a 66 percent increase, according to my math. That's what this government has expanded gaming by. Fair enough.

           Also, Surrey city council…. It wasn't about relocating the casino. That casino did relocate, yes. Then Surrey voted in favour of slots at Fraser Downs. The city of Surrey — Liberal mayor, Liberal government. They're just fine now to have slots in Surrey. Fair enough, but we're all admitting to it. We're all on the same page here.

           By the way, just an aside to the Solicitor General. I am awaiting the chronology of events around the police complaint commissioner and the Frank Paul investigation, because we've had a huge amount of feedback about that overnight from the public. I am awaiting that chronology. That's a complete aside, Madam Chair.

           In the area of bingo, the revenues listed in the service plan of the B.C. Lottery Corporation incorporate bingo, but the bottom line is that in terms of the net income transferred to the government, it has always included bingo. Perhaps the minister could review the changes that have occurred to bingo in the last year — what consultation was done and what implications there are for charities in this province. I'll start with those.

           Hon. R. Coleman: The member had three questions. Number one, a bingo hall that brings anything other than electronic bingo in has to go through a local community process of consultation with regard to the local government and approval. We won't put anything in a bingo hall other than that unless it is approved by local government.


           The changes in bingo haven't been that dramatic in the last year, but every time we actually relocate and do a new bingo hall that's being moved, there is an introduction of more electronic bingo machines in there — although they've been in the marketplace for some time, particularly in Vancouver. They were there five, six, seven years ago.

           The other thing we're looking at, and we haven't done one yet, is the possibility of what we're calling community gaming centres. That would be where you have a bingo hall in a community and a local government has, for some time, asked for a "casino," which as I explained earlier, is economically not feasible. The possibility of adding some slots into a bingo hall, which is easier management than a casino…. It's all electronically managed by computer at a central level both in Kamloops and Richmond, as far as us tracking the machines. It's not unlike what we do with the electronic bingo machines, which are already in the thing.

           I'm going to give the member a percentage with regard to what the service provider gets from gaming in B.C., because the service provider numbers haven't changed. Those contracts are the same as they were over the last number of years; it's the volume. Obviously, as they get an increase in volume, they are making more money and so is government — and so, frankly, is the local government, which actually gets a percentage of this.

           With regard to the charities, there was, I think, $136 million in the commitment to charities last year. It's tied to a COLA clause, tied to the inflation rate in Vancouver. It would go up by that percentage this year.

           The challenge in the whole charity side is that it's broken into two, as the member knows. One is what we call direct access, which is the ability of people to apply for direct grants for programs in a variety of areas from all over the province. The second part of the commitment to charities is all the revenue from bingo, all the profit from bingo, plus what we call the top-up, which was part of the commitment to charities that the previous government put into place. That top-up is the money that's attached to…. When slot machines were put into casinos by the previous government, they made a commitment to charities that they would continue to maintain the revenue to the charities and the bingo halls at that level plus this calculation of inflation.

           One of the things we've seen on the bingo side, particularly until recently, is the revenues in bingo going down to the point where, in some cases, we were actually topping up the entire profit of a hall. The hall wasn't making any money and, in some cases, making a little bit. There are a couple of halls in B.C. that don't require top-up, because their revenues have actually gone up.

           There's a real upside benefit to us modernizing the bingo sector, if we can do it; that is, if we can modernize the bingo sector and raise up the revenues as far as the profitability is, what happens there is the top-up comes down. As the top-up goes down, the direct access goes up, because the money stays in the pot, and it actually allows us to give more money to more charities at a higher level. If we increase the profit in bingo, it stays with them, but the money that's in the top-up stays also within the community charities and now moves to the other grant program.

           One of the concerns I had a couple of years ago when we did the gaming act was the whole aspect of the management and conduct of bingo. It wasn't on the conduct and management of any particular agency.

[ Page 9887 ]

There were actually a couple of agencies dealing with bingo. We moved it to the Lottery Corporation to have them concentrate on it as a line of business like any other and to modernize it as best they could. That is just starting to bear a little bit of fruit. I would hope that in the future we will actually have more money for charities as a result of some of the changes.

           J. MacPhail: What are the ongoing consultations with charitable organizations to ensure the proper distribution and full distribution of the money?

           I'm sorry. Did the minister say it was $136 million? I just need to confirm that number.

           Hon. R. Coleman: Yeah, $136.5 million is the total that's in that package — $5 million of that is what we call independent paper bingo, and the balance is the total government subsidy package, which includes the bingo and the top-up at $131 million. That's where I get my $136.5 million from.


           I was recently up in Prince George and did a round table with a number of charities there with regard to the community. Frankly, that was just to see how the changes that were made a year and a half ago were working for them — things like how we tried to streamline the grant application process, how we tried to make it more flexible for them to donate, to do certain things within gaming.

           There were a lot of rules in and around this that were actually affecting how charities could do their business. For instance, if a charity raised money from a lottery and they wanted to give $1,000 to the minor hockey association in the community, they had to write us and ask for permission to spend anything over $1,000.

           The feedback we were getting two and a half to three years ago was that a lot of these rules were really onerous to volunteers and that the paperwork that was required needed to be improved. We did improve a number of things, including the website.

           Our staff regularly attends their type of meetings, whether it be a bingo association or the B.C. Association for Charitable Gaming or other organizations like that, as far as consultation. We haven't made any major changes to do with charities for almost two years now, so there's been no need for consultation to go out and say we're going to do something else, because we're not anticipating anything new that would affect their operation.

           What I do tell them when I speak to them and when the staff speak to them is that if you guys identify something that's not working out there, let us know and we'll have a look at it to see how it can be applied and how we can deal with it. We haven't had, frankly, any of that lately.

           One of the things that did happen, though, is as you change a number of things, sometimes even your staff don't catch up to speed. In a couple areas of the province we had people still working under the old rules versus the new rules. That did cause some consternation for a few months back last fall, when some people were not getting their grant applications done the way they thought they should, or whatever. We dealt with that through the director, who basically reviewed some of those files and dealt with the problems and then tried to re-educate the staff to understand what we are trying to accomplish in the new rules.

           Basically, the rules are pretty fair for both sides, and we do always have the audit provision with regard to anything to do with a charity. If we have a concern, we can go in and look with regard to how they are managing their money. We just felt that some of the things we had in place were a bit too onerous for them to actually do their jobs.

           The other thing is that we did make some changes so that we could see some larger benefits from non-profit groups within communities. One, for instance, was if a Rotary Club, an Alliance Club, a Legion and a Kiwanis wanted to do a community centre and they were all accessing money by either doing bingos or lotteries or gaming, they couldn't actually all donate to the same community centre. The rules said if you had a gaming licence, you couldn't get gaming money from anybody else. We allowed that to happen so that some of the larger things that could happen in communities by having these moneys leveraged together could be improved to access, to do other things within communities.

           Those are the types of things that the charities were talking to us about that we did change. I now think, after my visit to Prince George and a couple more recent one-on-one meetings with organizations and their comments back, that the charities in the non-profit sector are pretty comfortable with what we've done.

           J. MacPhail: For fiscal '03-04 will the full $136.5 million have been distributed, and amongst how many organizations?

           Hon. R. Coleman: Yes, except for the last bingo payment, which goes out in a day or so. The last top-up payment goes out at the end of the month.

           Approximately 6,500 charities received assistance through this program last year. I'm actually pretty proud of how that has worked. We did change our intake to quarterly so that we could actually receive in quarters, and our people could assess applications against applications in each category. That proved to be very good.


           The other thing, though, was that the goal was to make sure this was a fund that could actually get to as many charities as possible and not find what it was finding at different times, when we first got it. In the first year we had it, and in the second year we kept improving. Initially, it was less than two-thirds of the way through the fiscal year when these funds were out of funds. You still had all these groups applying, and there was no money for them to apply for.

           We tried to put some discipline in place with regard to how we dealt with them. We did the quarterly…. One was arts, culture and sport; the other one was public safety, environment, and human and social

[ Page 9888 ]

services — so that we could categorize them. If you had a hospice, for instance, it would go into human and social services. If you had something to do with sports, it would go into the other quarter, and you would apply during that quarter. We made that change, plus we made an additional change with how we distributed the money last year.

           One of the things we observed as we went through this was that people like…. Parent advisory councils were a classic example. We looked at the parent advisory councils and how much money we were giving out to the PACs.

           [K. Stewart in the chair.]

           The formula was that you could get $40 a student if you applied for it, showed us the project and did the grant progress, and all the rest of it. What we found, though, was that schools in higher socioeconomic areas were the ones getting those dollars because they had the people who were prepared to take the time to do the application or had whatever expertise they had. What we did then is we said: "We don't want to do that anymore."

           We changed it. We actually put an additional $3 million into PACs last year versus the previous year and gave every PAC $20 per student, so it wouldn't matter whether you were an inner-city school or whether you were a school in another neighbourhood or else upcountry, whatever the case may be. We simplified the process. If you had a PAC and a bank account, you got the money at the end of September. That actually was a pretty good move, frankly. It worked out pretty well. It took out about 1,800 applications that had to be processed in that neighbourhood, that had to be detail-processed versus, you know, saying: "Give it to the PACs. The PACs can do something in each school." Then, if we had a problem with the money, again, the audit provisions existed.

           I'm pretty pleased to say that in addition to being able to do the 6,500 charities as part of that, this is the first year we've actually been able to do capital grants as well, because of the fiscal management of the fund. We actually distributed $4 million for capital grants. That's like matching grants. If a society, a non-profit, for instance, was building a park in a community and they could show us they had the money and they had the relationship with local government and the moneys were there to match, we would allow up to a $100,000 capital grant for projects like that. That capital grant can be retained for three years, and they can apply over a three-year period for a maximum of $300,000. We never had that ability before. It's actually been pretty good to see a number of those received this year, because we had the dollars for it.

           The other thing is that we didn't run out of money. We actually processed everything right through to March in each category and distributed the funds.

           J. MacPhail: We're receiving quite a bit of information from charity groups. They are telling us they're receiving less and less money from gaming. Of course, they're curious as to why they're receiving less and less money, given that gaming revenues are expanding.

           I do understand the minister to say that the pot is at $136.5 million, but let me ask this question. Given that the pot of money for distribution to charities is $136.5 million and about 6,500 organizations have received money, what is the average…? How much are various charitable organizations receiving, and is the amount of money organizations are receiving going down or up?


           Hon. R. Coleman: Just to be clear, there's $106 million that goes out to charities through the gaming, which includes the bingo. And $5 million of that is what we talked about, the private bingos. So $131.5 million is what we gave out through government last year. The $5 million they earned and kept. Next year it's $133.2 million. That's the number we've been given, with the COLA clause kicking in for charities.

           Those that were in the stream are basically getting about the same money as they've always got. There are groups, though, that have gone down, and some that have gone up. It depends on application and it's program-driven. One of the challenges with this is that at times, I think, there are some groups that look at this as a guaranteed cash flow, that this is an entitlement fund, but it isn't. It actually is a grant fund. You apply and you have a program that you've identified that the grant would be applied to, and then it's given to you on that basis. Some will have gone up; some will have gone down. I've seen both sides in the printouts, year over year, with different groups.

           We actually made a significant effort to be as fair as we possibly can with this. In addition to that, as we transitioned to the quarterly intake last year, we actually provided transition funds to groups that felt their time frame was too far out. We actually assisted them with additional funds to transition them to the new application period.

           J. MacPhail: Just to be clear, the overall application process is called applying for direct-access funds. Is that it? What actually is meant by direct-access funds?

           Hon. R. Coleman: There are two streams available for charities with regard to how they access money. One is they can apply for and receive, if one's available, a bingo affiliation, which gives them the bingo revenue plus the top-up in a hall. They can get their money that way. Or they can apply for direct access, which is a straight-out grant program, which was established by your government as a grant program. The two streams are part of the overall commitment to charities, which is that $133.2 million next year. Last year the direct-access side of that was $74 million.

           J. MacPhail: Okay. I think my concerns are in the direct-access area. I'd just like to use one case in point. It actually is from a case study, I should say. It's from the riding of my colleague, the member for Vancouver–Mount Pleasant. I want to use it as an example to see if

[ Page 9889 ]

our understanding of it is correct or if there's a way to improve the situation around charitable direct-access grants.

           As I said, my colleague from Vancouver–Mount Pleasant has been attempting to get to the bottom of this issue. It's about the Grandview Terrace Child Care society. That child care society can't get recognized as eligible for proceeds from the direct access grant portion of the fund. It appears that it's because the Grandview Terrace Child Care Society contracts administrative services to the Britannia Community Services Centre Society, so they've been considered part of the Britannia Community Services Centre Society. That society gets its own gaming funds, and therefore, the child care society seems ineligible.

           I mean, the reason why the child care society is contracting those services is because they've been directed to do that by their own ministry bureaucrats in order to save money. There's a letter dated March 12. It's very brief. I'll read it into the record and either the minister can take it on notice or perhaps he can give me answers now.


           This is to Ursula Cowland, who is the director of licensing and proceeds distribution for the Ministry of Public Safety and Solicitor General. It's from Carla Arsenault, who's the chairman of the Grandview board of the Grandview Terrace Child Care Centre. It's very short.

           "We refer to the letter dated March 1, 2004, from Gerry Wells and are addressing our reply to you. We disagree with the decision to deny a direct-access grant. We would like to enter into the reconsideration process as outlined in your internal review procedures. The following information clarifies statements made in Gerry Wells's response."

I gather Gerry Wells is the manager of licensing and access for the Minister of Solicitor General.

           "We have a voluntary and broadly based membership. The Grandview Terrace Child Care society is legally responsible for the management and control of the organization and its programs. We carry directors' and officers' liability insurance. We are the employer, and we can terminate the services purchased from Britannia given 30 days notice. Nowhere in our budget is the revenue from Britannia or its affiliated commercial bingo hall. In fact, we pay an administration fee to Britannia, which shows in our budget under the administration line: $8,200, $11,800, $1,300. Those are three separate fees.

           "We currently have seven board members and 70 members in our organization. Clearly, the voting membership exceeds your requirements.

           "The Grandview board regularly reviews all aspects of the operation, which includes budgets, contracts, grants, staffing, programs and fee increases, and we also ensure that Britannia fulfils their obligations under our agreement. The Vancouver coastal, community care facilities branch, requires Britannia to be named as the licensee and has our senior staff person named as person in charge.

           "In closing, I have attached a letter dated March 25, 2003, from Jenny Kwan, which is a follow-up to the debate in the House on March 4, 2003. I have also enclosed a copy of Hansard outlining the debate."

           Unfortunately, this issue has been going on for well over a year, and I'm just wondering whether the minister can help us clarify this. This organization is doing this administrative contract under direction from other government bodies in order to save government money.


           Hon. R. Coleman: I'm sorry to take so long; I just wanted to make sure I got this right.

           They're in the reconsideration process now. It has to be done within 30 days. This letter was March 12, so they are actually presently in the reconsideration process. My understanding, in talking to staff, is that what they've done is they've gone one step further than a lot of organizations did. They gave up control of their programs to the other organization and, therefore, aren't directly delivering the programs. We think that could be fixed during the reconsideration process and addressed.

           What we will do is make sure the member plus the member for Vancouver–Mount Pleasant are kept informed as we go through the reconsideration process and the results. We're also going to have a look at how…. Last year we did a number of changes as a result of the debates with regard to this shared administration to try and solve this problem. This one seems to be one that has a little bit of a different twist to it under its contract with the Britannia group. We'll sit down with the organization during the reconsideration process and find a way to get it fixed.

           J. MacPhail: Thank you, I very much appreciate that.

           Is there some way that organizations can actually find out the distribution of moneys from the pot? I must say that I'm just looking at e-mails here right up to March 15 of this year where people are still writing in to us, saying every charity…. I'll just give you one example. This is from a preschool organization who got $25,000 in 2002 and are told that in 2005 they'll get $5,000. It's a preschool. I can give the name of it — St. David's Preschool.

           They're saying: "Where is all the gaming money going? Every charity I talk to is getting less gaming funding than before." I'm sure they are just doing that by anecdotal evidence. Is there some record of contributions by organization from the total pot that organizations can actually examine?

           Hon. R. Coleman: First of all, I'll have the director look into that particular one for the member. But the last three years of who received money is sorted by community and is posted on the website at the gaming policy and enforcement branch.

           J. MacPhail: Is it the website of the Lottery Corp or the Solicitor General? If you could give the URL, that would help, if that's possible — or get it for me.

           Hon. R. Coleman: That we'll do.

[ Page 9890 ]

           J. MacPhail: I thought I'd just throw in that technical term, Mr. Chair, so people know that I know it. I hope it's right.

           The last two areas are on the issue of gaming. One is problem gambling and then the Hastings racetrack. I want to talk about problem gambling and the expansion of gambling. I would love to have this debate with the member for Kamloops–North Thompson. Let me just quote some of the things he said. Of course, he's always moderate in his comments — not.

           He said in 1998: "The government should not be installing slot machines all around the province that are going to further addict British Columbians to gaming and lead to a whole host of social ills that have been thoroughly discussed in this House, including by members opposite when they were in opposition. They saw things through a much clearer moral lens than they're able to see through while in government."

           That was in 1998. The member for Kamloops–North Thompson would have been in opposition, berating the then government who is now in opposition, and he's in government. I guess you hate it when those things come back to haunt you.

           The Premier, when he was in opposition, April 19, 1999: "I have a positive and constructive suggestion for the minister responsible for gambling: stop the expansion of gambling today." Then, of course, in March 2000 the now Premier said, as leader of the opposition: "This government has been absolutely reckless in the whole pursuit of the gaming policy."

           I actually have about four or five more pages, Mr. Chair.

           The Chair: The only caution I give the member is with regard to policy and legislation. We're here to discuss the estimates, so I trust that it will be directed toward the estimates that are presented before us.


           J. MacPhail: Absolutely. What I was about to say was that I'm not going to read the three or four pages more of comments by the member for Kamloops–North Thompson about the ills of the expansion of gambling, particularly as it relates to slot machines.

           What he does ask, at length, is about what the government of that day was doing about the ills of gambling addiction. My questions are this: what problem gambling programs does the government fund currently and by how much, and is this in any way linked to the Lottery Corp revenues?

           Hon. R. Coleman: Just for the member, the website is www.pssg.gov.bc.ca/gaming. I think there's an http-something-or-other else in there as well.

           On the responsible gambling strategy, going back as far as 1997, the government actually launched a provincewide problem gambling program that included public awareness, information, referral, prevention and treatment components. We've continued to do that and build on it.

           Research indicates that approximately 96 percent of British Columbians gamble responsibly. Most people consider it to be a form of entertainment — where they have the right to gamble, should they desire. We're taking a measured approach to gaming in B.C. and ensuring the industry is carefully managed and regulated. The Lottery Corporation has a lot of training for its people to recognize people within casinos and, frankly, even in the retail sector who have a problem. They would refer them to the point-of-purchase material that is at each gaming area, and there's also stuff on every ticket, that sort of thing, with regard to where they can go.

           We provide a public awareness, prevention and free counselling service across the province. As well, people needing assistance or referral can call a 24-hour, toll-free help line, and the Partnership for Responsible Gambling is outlined on our website, which I could give the member: www.bcresponsiblegambling.ca. It outlines the strategic approach government has taken to address the issues related to excessive gambling.

           Like any other addiction, problem gambling is also a health issue for people who have addiction problems. Treatment for that is actually similar to other addictions. Based on studies conducted in '93, '96 and 2003, just over 4 percent of British Columbians have a moderate to severe gambling problem.

           Gaming provides significant economic benefits, as we know, but we're aware of the adverse aspects of this and have continued to fund money into problem gaming. Annually, it comes out of government general revenues. About $4 million is spent with regard to the dedicated money to the government problem gambling program.


           J. MacPhail: The $4 million directed toward problem gaming has changed how over the last three or four years? I think I remember that in '01 there was that amount of money being spent on problem gaming. And, as we know, the province is claiming credit for people returning to British Columbia, so the population is expanding, as I understand it.

           Hon. R. Coleman: The member is actually correct. Right at the change of government there was an increase coming through on an estimates process from $2 million to $4 million for problem gaming. It was reaffirmed by this government and was put into our budget and reaffirmed as the number. We've continued to sustain that. In 2002-03, $3.3 million of that was spent on problem-gaming initiatives. Other funds would have been spent on prevention and research with regard to problem gaming so that we would obviously have other research available.

           It's an ongoing program. As we redid our service provider contracts over the last few years, we've actually increased the accountability toward this issue in the contracts with service providers and increased our point-of-purchase, as I said, and other aspects with regard to continuing to make sure we're trying to do

[ Page 9891 ]

the best we can with the issues in and around problem gambling.

           J. MacPhail: In 2001 the government was reaping $562 million profit from the Lottery Corp and was spending $4 million on problem gaming, and the government is about to reap over a billion dollars in gaming in the next coming years. Is the minister planning on keeping the same proportion of moneys spent on problem gaming in relation to profits earned from gaming?

           Hon. R. Coleman: There's free, confidential counselling available all over the province. The problem-gaming issue has been pretty constant for the last seven or eight years through the studies. There's been no increase that would affect the need to add money to that budget. If there was, obviously, we would immediately look at that, but the access to the service and the moneys being spent, at this point, appear to be sufficient. We actually have the information and the literature in offices and at gaming locations and wherever they sell lottery tickets, and what have you.

           [G. Trumper in the chair.]

           There's a side of gaming that governments are not involved in — not yet — and I don't know that they ever would be. There are governments in other countries that are, mainly in places like the Caribbean, where there are on-line casinos, which are a problem for people that have an addiction or gaming problem. They can access the Internet and go play the game. They can actually buy lottery tickets on the Internet internationally. They can actually get into the sports bets in places like Vegas over the line, and all of those things. I think we as a country and most countries have never, ever come up with how we could actually regulate the Internet and that information. That's another aspect of gaming we have no control over.

           However, the counselling and that are available on a 24-hour line to anybody, no matter what type of gaming they're having difficulty with.


           J. MacPhail: I would actually say there's another area that is of growing concern, and that's the issue of problem gaming amongst youth, B.C. youth in particular. Therefore, I think I would seriously urge the government to invest more in gaming addiction programs.

           I would ask the minister to comment on a provincial study from March 2003 that polled 2,500 B.C. residents. The British Columbia Problem Gambling Prevalence Study shows that 9.8 percent of people aged 18 to 24 reported problem gambling. Of course, that's in contrast, disturbing contrast, to the average for the population as a whole, which was that 4.6 percent of people across the population reported problem gambling. Surely that shows we need to do more in the area of programs to combat addictive gambling.

           Hon. R. Coleman: Coming out of that study, we actually put in a dedicated person with regard to youth to develop material for education, for youth, and they're distributing that information to all of our counsellors. We actually dedicated, as a result of seeing that study, a group to deal with that concern.

           Three groups in the study were identified as having a higher percentage. One was the youth, and we're developing programs and have already initiated some programs with regard to that, and we continue to do that. The second was a group that is classified as pre-retirement adults, people between the ages of about 55 and 65, who seem to have a higher prevalence of gambling. Then there seemed to be a higher prevalence in the north. We've addressed that by putting counsellors in place to develop programs for those particular areas for literature, research and assistance.

           J. MacPhail: Is the Solicitor General working with the Minister of Education to ensure that the issue of problem gaming is addressed in the K-to-12 sector?

           Hon. R. Coleman: The counsellor goes into schools, and so do other people. There isn't a formal protocol with the Ministry of Education at this point, but we are developing material that will be able to be used in the schools, and we'll provide that to the Ministry of Education.

           J. MacPhail: Okay, thank you. I really urge as much as we can possibly do, given the expansion of gaming and this study. I appreciate the minister's comments about what they're doing to date, but really, we have to be relentless in this area. I am not a temperance woman on this. I mean, I accept gambling in our society, but the pressures on youth today…. We must tackle this issue right up front in terms of educating young people about watching for the signs of problem gaming. As with any addiction, this one can ruin a young person's life very early on.


           My last areas of questions around gaming have to do with the Hastings Park Racecourse, which is in my riding. I am a huge supporter of the horse-racing industry and always have been, both in word and deed. Of course, it is an institution in Vancouver-Hastings, the riding I am fortunate enough to represent. Can the minister update us…? Well, let me make a couple of other opening comments so the minister knows where I'm coming from on this.

           I fully support the public process conducted by the city of Vancouver about the future of Hastings Park, which includes the racetrack. I fully support the review by the city of Vancouver around the ability of the racetrack to have slot machines there, and I will accept the outcome of both of those reviews. My community is an extremely activist community and is participating fully in both the overall vision review of Hastings Park and the city's process around whether or not to permit slot machines at Hastings Park. That being said, what — if any — changes are there with the proposal now for a casino to buy the racetrack?

[ Page 9892 ]

           Hon. R. Coleman: First of all, I also will accept the process and accept the result, obviously. I think that's healthy. I also think the process, as it goes through, has to engage the community on the future of Hastings Park, and my hope would be, for a number of reasons, that it would include the track.

           One is that there are about 6,000 people who are employed as a result of horse racing in British Columbia. A lot of those people are in jobs that in some cases do not necessarily have a high skill level, and their other employment opportunities may be minimized by what might be available to them out there. They love what they do. They are dedicated to the sport, and there are great folks out there making a living as part of the horse-racing industry.

           There is no change in what would go before the city of Vancouver with regard to Hastings Park as a result of a casino service provider purchasing the Hastings Park opportunity from the Woodbine Entertainment Group, which was the parent company of Hastings Entertainment. They have to go through the same process. They'll have to go through the Vancouver process the same. If they're successful, they're successful, and if they're not, they're not.

           They've made it clear that they are committed to supporting horse racing at Hastings Park no matter what the result with regard to that. They feel they can make the business case work either way. However, obviously, whatever capital improvements they might want to make if there were a better revenue stream probably couldn't take place for a longer period of time, because there just wouldn't be the revenue stream there to justify it. They purchased what Hastings Entertainment had, which they're entitled to do. Hastings put it up for sale.

           Frankly, my observation…. Having dealt with horse racing since I became the minister and having dealt with the issues that the Pacific Racing Association had as far as their financial difficulties as a non-profit and then having Woodbine coming in and taking it over and assuming a loan from government, I don't know, necessarily, that the Woodbine Entertainment Group had an understanding of the neighbourhood the racetrack was in or did a process that actually engaged the community at a level where there could be some compromise and understanding.

           I would anticipate that with local ownership and the partnership that exists, that is a different thing today. I'm pretty sure the people in Vancouver, at both the staff and the council level, are looking forward to sitting down and working with people who know the community and are from the community with regard to that. Whatever happens with Hastings, I guess we'll know in June, but horse racing will continue at Hastings this year, obviously.

           What we did, though, is to enhance the purse pool for both standardbred and thoroughbred, because one of the challenges that horse racing faces is that it operates in an old gaming environment and has to compete against two other jurisdictions in particular. There are actually three major ones, one being Ontario, but the two major competitive jurisdictions are Washington State and Alberta.

           Both Alberta and Washington State have allowed slots at their racetracks and give a percentage of that to the purse pool, and the purse pool is what attracts the industry. If there's no purse pool that a horseman can make a living at, they actually take their horses to the jurisdiction where the purse pool does attract them. Long-term solutions need to be found for horse racing in B.C., and I'm hoping — I was going to say I'm confident, but I'm hopeful — that this new partnership working with the city of Vancouver can find long-term solutions to Hastings Park.


           J. MacPhail: Yeah, so am I hopeful.

           It's the Great Canadian Gaming Corp. that announced it was going to acquire Hastings Entertainment Inc., which owns the track. They were going to acquire it from the parent company, Woodbine Entertainment Group of Toronto. I understand that Great Canadian Gaming Corp. will sell a 40 percent interest to the Wall Financial group and its chairman and CEO Peter Wall, subject to approval from provincial gaming regulators and, I guess now, the city — or, no, provincial gaming regulators.

           Does this sale move forward as a casino sale or a horse racetrack sale?

           Hon. R. Coleman: First of all, I should be clear. There is a tentative agreement between the companies. There is some process it has to go through. One of them is the approval of the service. Hastings Entertainment was an approved service provider. Everybody that conducts gaming in B.C. has to have an approval of the service provider, whether it be bingo, casino or horse racing. Service providers go through a process where we do background checks and everything else with regard to the directors of companies and all that before they actually get approved.

           Great Canadian Casino Co. is an approved service provider in B.C., but because they're bringing in the partner, that partner also has to be vetted by the gaming policy and enforcement branch. The process is going on now, and the decision could be in the next week or two. Then, the ability for the deal to go forward would be going forward.

           They're buying the company. The racetrack is actually owned by the city of Vancouver, and it's leased out to the company, so the racetrack itself is owned by the city of Vancouver.

           Woodbine, when they purchased it from the PRA, which was the process there, put about $3 million into the grandstand and what have you with regard to some improvements they did at Hastings. They sought…. I actually don't know about the financial arrangements, what they paid or who paid what, but they were seeking to mitigate that as they sold the track. There is a loan to government that is current. It wasn't current when we got the file, but it is current now and has been kept current by Woodbine, where

[ Page 9893 ]

we get quarterly payments as government. It's down around $5 million, somewhere in that range, right now. That would have to be assumed as part of the deal.

           Those approvals have to go through government before they can make the final deal with regard to it. At that point in time, they would have to deal with…. If they're still wanting to proceed to the public hearing, which is…. I understand it's scheduled for June with regard to slots at Hastings Park. They would start their process dealing with the neighbourhood, dealing with the community and dealing with the local government with regard to that, and we would not be part of the process. They would be the part of that process to take that through.

           J. MacPhail: Just to be clear, the B.C. Lottery Corporation role in this sale and subsequent application to the city of Vancouver doesn't change.

           Hon. R. Coleman: They have no role in the sale, and their involvement doesn't change as to what it was before.

           J. MacPhail: That's fine.


           P. Nettleton: I have a couple of questions with respect to the native courtworkers association. I don't know what you need in terms of staff.

           Hon. R. Coleman: We'll get them.

           P. Nettleton: Great.

           I would be remiss if I didn't raise a couple of questions with respect to the Native Courtworker and Counselling Association, given that prior to my entry into public life, which goes back to 1996, I had been working as a supervising lawyer in a small native community law office funded by legal services located in northern British Columbia. We sublet one of the offices within our office to the native courtworkers and worked very closely with them in that office, servicing as we did not only aboriginal persons but also non-aboriginal persons in that community and beyond. As well, we worked extensively with various first nations. In fact, my job included travelling, holding legal aid clinics, dealing with criminal files, family law files and the like.

           My association with the native courtworkers was a close association. In fact, the gentleman who was working in my office at the time I entered public life in 1996 went on to become the Chief of the Nak'azdli band, which is the primary band in Fort St. James. Beyond that, he ended up working, I think, as vice-Chief of the Carrier-Sekani tribal council located in Prince George. I've been fortunate in that I have maintained those friendships and relationships, which extend back some years.

           A couple of questions, if I may. I know I have raised this on one occasion with the minister in question period, but I'd like to re-cover some of the background as well as raise another point I didn't have the opportunity to raise in question period. By way of review, then, the budget to this particular association, the Native Courtworker and Counselling Association of British Columbia, was cut in 2002 by $400,000. Further, for this fiscal year, they have been advised there will be an additional cut of $700,000, which in total means that the budget for this particular association will be cut by more than 50 percent. It's a very dramatic cut in the budget to this group.

           At the same time, aboriginal people requiring services by this association have risen by 48 percent from 2002 to 2003, which is certainly problematic not only for this association but for those they service. This is all, of course, in the context of previous cuts to NCLOs and other legal and social programs to aboriginals. In fact, the office I had been working at and supervising is no longer functioning as a native community office, as their budget, rather, was…. Well, their office was closed through Legal Services and the office of the Attorney General.


           I know, while having worked as the supervising lawyer, that we had budgetary concerns and constraints. I had done things as the supervising lawyer such as cutting back on the law library and on travel and other things, in an attempt to make things work. Again, under the current government through the office of the AG, those NCLOs were closed, as well as various other legal aid offices throughout the province, including northern and central British Columbia.

           I think any discussion with respect to the native courtworkers and the people they service has to be taken within the context overall of the cuts that have been made in terms of assistance to those requiring help when working through the criminal justice system, particularly, but in the family courts and so forth as well.

           I guess what I'd be interested in knowing from the minister, then, is: are there any discussions, consultations — whatever you want to call them — with the Native Courtworker and Counselling Association and/or other first nations groups or associations, given that this is an association that is strongly supported in its position by the major aboriginal organizations in British Columbia — for instance, the First Nations Summit; the Union of B.C. Indian Chiefs; the Métis Provincial Council of British Columbia; and the Assembly of First Nations, B.C. region? All have signed a letter, as I understand it, to the Solicitor General, the minister before us, expressing concerns about the cuts and requesting a meeting with the minister.

           The Chair: Minister, would you introduce your staff for this morning, please?

           Hon. R. Coleman: Acting Deputy Minister Tony Heemskerk; Assistant Deputy Minister Kevin Begg, also the director of police services; Jim Crone, ADM, management services; and Bert Phipps, acting assistant deputy minister with Corrections. Earlier I had the director of gaming and somebody from the Lottery Corporation.

[ Page 9894 ]

           The evolution of this file has been in discussion with the native courtworkers over the last couple of years. Last year we did our matching contribution, and there were some additional dollars that brought it up to where their funding level was higher. This year, with basically what the federal government is prepared to put up, which is about $400,000 less than last year, our match is $400,000 less than last year. That actually would have put the number for the native courtworkers at about $982,000. We've issued them a letter saying we'll guarantee them $1.3 million. We will have to pay that whether the federal government comes to the table or not or gives us any additional matching funds, which would also go to them.


           They have made two proposals to us with regard to how they want to operate under this new restructuring. Either of the two proposals is acceptable to us, and we'll be communicating that to them so that they can proceed. We're also going to provide them with a transition grant this year so that any transition in additional money from that can help them transition into their new business case.

           That is an ongoing discussion and a working relationship between us and the corrections branch. They still do want to stay independent. We thought there could be some additional savings found for them by sharing offices and programs with Corrections, but they wish to stay out of that side of it. Like I said, they've made the two proposals, which are two options they see that they would like to work with, and we're saying either one is fine by us.

           P. Nettleton: That's helpful.

           Just one further question, if I may, for my benefit. In my discussions with the Native Courtworker and Counselling Association in recent weeks with respect to their budgetary concerns and constraints, they also made reference to the fact that responsibility for them and their funding was moved from the office of the Attorney General to the office of the Solicitor General. What was communicated to me, at least, was that in fact not only had there been no consultation with respect to that move, they didn't seem to have any sense as to why that move to the office of the Solicitor General was made. Again, as I say, just for my own benefit, perhaps the minister could provide some insight as to why that move was made.

           Hon. R. Coleman: At the time of the change of government and the new duties to ministers, a decision was made that it would stay with wherever the program was. The program was under community programs, and community programs came to the Solicitor General. There are other community programs in that package.

           We have had discussions at different times with the Ministry of Attorney General with regard to that. They are still of the opinion that it's more appropriate here because community programs have a larger outreach with regard to other issues in and around the native courtworkers, so that's really why it sits here.

           J. MacPhail: I'm on to a new topic. We've got about five minutes, I think. It's concerning organized crime. I don't know if we need to shift, or should I just start in?


           J. MacPhail: Start? Okay.

           Here's how I view what's happening in the area of fighting crime in the province. We don't know yet when the government is going to be transferring the 75 percent of provincial traffic-fine revenue to fund municipal policing. It was an election promise in '01, and the government has said they'll do it before the next election, but it still hasn't happened. According to my analysis of the budget, the funding for the Organized Crime Agency has been frozen. I'll talk about that in a moment.

           The B.C. Liberal government has made deep cuts to community policing and public safety. The original plan was to cut $20 million out of the public safety and policing services, but I see in that the most recent budget, the '04-05 budget, this cut was reduced to $13.5 million, as I read it. Instead of cutting $20 million, they're cutting $13.5 million. The B.C. Liberal government has already cut the Crown prosecutor's budget by $5.5 million. I can read a letter from David Jardine of the Crown prosecutors into the record from November 2003.

           First of all, can the Solicitor General explain what the latest plan is for the Organized Crime Agency, an agency set up, I think, around 1998 by the previous government?


           Hon. R. Coleman: The Organized Crime Agency is moving to become an organized crime unit, an integrated unit with the RCMP and other municipal forces. It's being moved intact with its governance so that the oversight stays the same with the board as it's structured, with the members of the board comprising, I believe, the commanding officer of E Division, the head of the B.C. Association of Chiefs of Police and two or three others. The move is being made at the advice of the senior management of law enforcement in B.C. — which includes the RCMP and municipal and the B.C. Association of Chiefs of Police — for a number of reasons.

           One is that the integrated unit, where it would be housed with the RCMP, will also share in the national database and information intelligence with regard to things like outlawed motorcycle gangs and what have you. We think that will give them more efficiencies and more assistance with regard to investigations, because they're part of a larger structure that is investigating these types of crimes.

           The other part of it, though, is that by moving it over as part of the provincial unit, it then becomes a provincial policing body. When it does that, it falls under the provincial contract that we have with the federal government, which means, basically, that we pay 70-cent dollars for the law enforcement officer

[ Page 9895 ]

rather than 100 percent dollars. Effectively, we gain another $4 million that we can put into organized crime investigations.

           J. MacPhail: How long has this proposal been in the works?

           Hon. R. Coleman: They've been working on it for about a year and are targeting April 1 as the transition.

           J. MacPhail: To be clear, the new unit…. I think it's called the integrated organized crime unit. Is it now a sole responsibility of the federally managed RCMP?

           Hon. R. Coleman: No, it isn't. It falls under the provincial force, the commanding officer of E Division, who reports directly to the Solicitor General.

           J. MacPhail: Sorry, I couldn't understand that.

           Hon. R. Coleman: It's not the federal force that manages this. It falls under the provincial force, which is the commanding officer of E Division, who reports to the Solicitor General. It's a provincial unit, not a federal unit. That's the structure of its management. As an integrated unit, it will have in it members of the Vancouver city police, Victoria, other municipal police forces, as well as RCMP.

           It actually allows us more flexibility. I canvassed this yesterday with the member for Bulkley Valley–Stikine. It'll actually allow us flexibility if we need to target an area of organized crime. For instance, let's say we have…. We do have an active Hell's Angels operation on the Island. We may want to have some people seconded from there over here to work with local police with the organized crime unit to go after a particular investigation, enhance an investigation or back up intelligence with regard to the integration with policing overall.

           Everybody that's in the management of law enforcement…. It's actually the senior management that brought it to us. It wasn't like I just went and asked them. It was a recommendation that came. They just thought there'd be a great deal of efficiencies in the sharing of intelligence, and they felt this would work very well.

           J. MacPhail: Does the newly created — as of April 1, 2004 — integrated organized crime unit remain part of this Solicitor General's budget, and is it therefore subject to examination in the estimates process?

           Hon. R. Coleman: Yes.

           J. MacPhail: I have several more questions in this area.

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

           Motion approved.

           The committee rose at 11:45 a.m.

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