1995 Legislative Session: 4th Session, 35th Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

WEDNESDAY, APRIL 19, 1995

Afternoon Sitting

Volume 18, Number 25

[ Page 13457 ]

The House met at 2:05 p.m.

Prayers.

Hon. M. Harcourt: It's a great pleasure for me to introduce to the House the Deputy Governor of Hebei Province, which surrounds Beijing. He is here from China with members of a very distinguished delegation that is here to carry on some of the discussions we had during the Team Canada trip to China. The Deputy Governor's name is Mr. Guo Shichang. His delegation is here with him from April 17 to April 29, seeking partners for over 120 investment projects and promoting investment opportunities. Would you all join in giving a very, very warm welcome to the Deputy Governor, Mr. Guo Shichang.

L. Reid: In the gallery today is Mr. Ken Morris, the secretary-treasurer of the Richmond School District. He and I have worked together for at least a decade, and I would like the House to please make him welcome.

G. Campbell: I'd like the House to welcome two enthusiastic young parliamentarians visiting us today in Victoria. Mark Karjalvoto is a member of the British Columbia Youth Parliament and a student at the University of Victoria, and Ryan Willoughby is joining him today. I hope that our actions today will encourage them both to seek public office and to serve in this Legislature. I hope we'll make them welcome.

D. Schreck: In the precincts today are Barbara MacLellan, chair of the North Vancouver School Board, Keith Denley, president of the North Vancouver Teachers' Association, and Mike Hocevar, president of CUPE Local 389. They are here to meet with the Minister of Education today. Will the House please join me in making them welcome.

A. Warnke: In the gallery today is a school board trustee from the Richmond School District, Ms. Chris Evans. Would everyone please make her quite welcome.

N. Lortie: I'm very pleased to have visitors from my constituency, Delta North. This entire balcony is filled with 54 grade 11 students and three adults from Seaquam Secondary in North Delta, led by their teachers, Mr. Hardy, Mr. McLeod and Mr. Schuman. Would the House please make them welcome.

D. Symons: As Richmond is inundated with portables, some members of the Richmond School Board have transported themselves to the Legislature seeking a more permanent solution to the classroom crunch. Would the members please welcome Sylvia Gwozd, who is the vice-chair of the Richmond Board of School Trustees.

D. Lovick: Mr. Speaker, on your behalf I would like to welcome a group of students from the Brethren Heritage School in Modesto, California. I would ask my colleagues in the chamber to please join me in making them welcome.

Hon. D. Marzari: Hilda Symonds has been introduced to this House on many occasions. Today I want to make special reference to the fact that she is here to witness something that she has worked very hard on over the last number of years -- that being the growth strategies act, which will be introduced today. I'd like to commend Hilda for her efforts, for her experience and for what she has brought to this bill. I'd like the House to welcome her today.

Ministerial Statement

WORLD WILDLIFE FUND'S ENDANGERED SPACES PROGRESS REPORT

Hon. M. Harcourt: I rise to draw the attention of the House to an announcement that was made this morning that should be a source of pride to all British Columbians. Today the World Wildlife Fund released their 1994-95 Endangered Spaces Progress Report. This national report card grades the federal, provincial and territorial governments on the progress they've made toward protecting wilderness areas and maintaining biological diversity.

Hon. Speaker, I'm very pleased to inform you that this report awarded British Columbia an A minus rating, which was by far the highest rating of any jurisdiction in Canada. I think the next highest was Prince Edward Island, which received a B minus rating. Furthermore, we were the only jurisdiction to be upgraded from last year. All the others have received much lower marks, most ranging from C's down to an F -- nearby to British Columbia.

Hon. Speaker, I have already gone on record saying, as you are aware, that in the years to come, this period in our province's history will be looked upon as a time when British Columbia's most spectacular natural areas were set aside for permanent protection: areas such as the Tatshenshini, the Khutzeymateen, the Kitlope, and the old-growth rain forest in the upper Carmanah and Walbran valleys on Vancouver Island -- over 100 new protected areas in all since 1991.

This A minus rating is a recognition of that achievement. I can tell you that the report card was first of all run by the Minister of Education to make sure it was done in simple, cogent language, as the report cards are now done in British Columbia. It's indeed a recognition of the tremendous progress that we've made towards meeting my government's commitment to doubling the park and wilderness areas in British Columbia.

It's a recognition, I believe, of everyone -- the companies, small communities, workers, environmentalists and government representatives who have invested a tremendous amount of time, energy, thought and commitment into land use planning to achieve solutions that meet both the environmental and the economic needs of British Columbia.

By working together for this land use certainty, we are creating jobs and investment in B.C. New parks and protected areas are also creating some direct economic benefits -- as a matter of fact, $9 in visitor spending for every $1 that's spent in parks, according to a Coopers and Lybrand report that was released yesterday, for a contribution to our gross domestic product that is now over $400 million per year. This shows what we can achieve when people set aside conflict, sit down, roll up their sleeves and work together.

I believe that all British Columbians can be proud of the example we're setting not just for Canada but for the world. British Columbia is pioneering a new way of bringing predictability, certainty and sustainable prosperity.

[ Page 13458 ]

Interjections.

Hon. M. Harcourt: I can say that I am sorry to hear a few people in this House who once again are questioning the value of what we're undertaking here in British Columbia. Hopefully, now these people will understand, as we have always understood, that jobs and investment flow from working together on sound decision-making, which not only enhances British Columbia's reputation for environmental protection -- as you can see in the A minus mark we got this year, and we hope to be upgraded again next year with more designations and for years to come with the new park and wilderness decisions we're going to make -- but will also validate our approach to economically sound sustainable development.

[2:15]

G. Campbell: Certainly we can all take a moment to congratulate the people of British Columbia for an A minus rating. We would certainly want to pursue an A plus rating, and I think there are ways we can do that which will provide for the long-term sustainability of the province. The fact of the matter is that, unfortunately, the Premier has not listened to the voices of many communities of British Columbia who have pointed out that while there may be some tourism jobs that have been generated, there are many, many resource area jobs that have been lost.

An Hon. Member: Name one.

G. Campbell: I'm glad to name many. I can name you the mills from Creston. I can name you the hundreds of workers who have lost their jobs in Tahsis. I can name you the hundreds of workers who have lost their jobs in northern Vancouver Island.

Interjections.

The Speaker: Order, please.

G. Campbell: However, the purpose of the statement that I understood the Premier to make was that we all, indeed, do recognize the importance of our natural environment in British Columbia. I think one of the important things that the government has often forgotten is that every British Columbian is an environmentalist, every British Columbian is willing to work to protect and preserve the natural environment of their community.

However, what British Columbians are concerned about is that the government has consistently turned a deaf ear to the cries of communities to be listened to when they talk about economic activities, when they talk about sustainable jobs and when they talk about long-term security for their families and for their homes.

I also think it's time for the government to listen to the voices of the communities in the Kootenays and to learn from the voices of the communities in the Cariboo, who said quite clearly to the government: "Do not impose solutions on us. We are willing to work with you. We are willing to show you how to accomplish our goals as British Columbians." Had we pursued that route, I believe we would not have just received an A minus rating this year. We would have got an A plus, because we would have protected parks and wilderness, and we also would have protected British Columbians' jobs and their communities.

J. Weisgerber: In responding to what I suspect must have been a ministerial statement -- although there was never any indication of that -- the first reaction is that the most endangered species in British Columbia today is the NDP. I suppose we might hear an announcement about a park or a protected area in a few key constituencies around the province where that endangered species might thrive and survive.

In listening to the Premier read his speech, one is tempted to pose the question: author, author? But I suppose, given the events that have occurred in British Columbia over the last few months, everyone would know the answer. Looking seriously....

Interjections.

The Speaker: Order, please.

J. Weisgerber: In order to have an author, you have to have some notification of an event occurring, and that has failed to become the practice in this House recently.

To get to the issue, it's an important achievement for British Columbia to have an A minus rating in the area of wildlife. But we must recognize that it can't only be through the creation of parks and protected-areas strategies that we protect wildlife habitat. As a society we can't continue to set aside single-land-use designations. We've got to work -- and should be working -- towards better multiple-use, multiple-user activities on Crown land. It should be with that goal in mind that we recognize that there is both the need to preserve habitat and the need to maintain an economic base.

Communities in the northern part of Vancouver Island and across the interior are recognizing that the approach taken by this government, which is ever-increasing set-asides, is threatening their economy -- indeed, is causing them to become endangered species in their own communities. We have to work more effectively and more cooperatively, and use our land base to better advantage.

So I'll applaud the government for having achieved a goal, a plateau. But I don't believe that we can continue to depend on the creation of ever more parkland in order to preserve wildlife habitat. This province can't sustain an ongoing growth in park size and in protected-area size.

The Speaker: The hon. member for Okanagan West rises on what matter?

C. Serwa: On a point of order, referring to Parliamentary Practice in British Columbia, the ministerial statement of the Premier doesn't qualify under the code. There is no new or altered policy, which is a requirement; there is no matter of urgency; and the statement should be brief, factual and specific. A licence and a latitude have been given that are not warranted or authorized.

Hon. G. Clark: I have a point of order to raise. I have reviewed the Blues from yesterday, and the Opposition House Leader stated very clearly: "...it's been the New Democratic Party, and this Premier in particular, who have been smearing the province of British Columbia all over the place with their misappropriations of funds in Nanaimo." This is incorrect, slanderous and clearly unparliamentary. Yesterday, when asked to withdraw his statement, he denied making it. From

[ Page 13459 ]

reviewing the Blues, it's clear that he did, and I now ask him to withdraw it fully.

The Speaker: The matter was addressed yesterday by the Chair in that the hon. member was asked if he intentionally intended to impugn any member, or words to that effect. After being given several opportunities to withdraw the offensive remark, the hon. member chose to accept the penalty of being removed from the chamber, which is the remedy we have had in the past in matters such as this. While the Blues do confirm the fact that an offence was committed, it was addressed yesterday, and it would be inappropriate for the Chair to revisit that matter.

Hon. G. Clark: I say respectfully that the member opposite was perhaps under a misapprehension that he did not impugn the integrity of the Premier. The Blues confirmed that he did. I would say, hon. Speaker, if this is your ruling, that this side of the House would be prepared to give leave to that member to make a statement in the House to apologize to the Premier and to withdraw his remarks.

The Speaker: The hon. member for Okanagan West rises on a point of order?

C. Serwa: Yes. The point of order is that you have made a ruling in the matter and your ruling is not to be questioned in this Legislature. That's a fundamental rule.

G. Farrell-Collins: As the Speaker ruled, the case stands. I will not deny the findings of the court. I will not deny the truth, and I don't know why the Minister of Employment and Investment would ask me to do so.

Interjections.

The Speaker: Order, hon. members. Just a moment. Before....

Interjections.

The Speaker: Order, please, hon. members.

The submission by the hon. Opposition House Leader was not on the topic that we have before us. We are not here to debate the issues that have been raised from time to time respecting questions of concern. What we are talking about now is a ruling made yesterday respecting comments by the hon. Opposition House Leader in question period which he refused to withdraw. The Blues indicate that the member was indeed in violation of decorum. He chose, however, not to withdraw, and that matter was addressed by asking the member to leave the chamber for the remainder of the day.

The Government House Leader's suggestion that, with leave, the member would have an opportunity to withdraw is a matter which I have to leave to the assembly itself.

Hon. G. Clark: I obviously respect your ruling, hon. Speaker. I would ask the member, then, to withdraw his remarks in the chamber today which clearly implied a confirmation of his remarks of yesterday, which he did not withdraw. So I ask him to withdraw his remarks today, and I also ask here in the House that he repeat those words outside the House, where he can be sued for slander.

Interjections.

The Speaker: Order! Order, all hon. members.

Hon. members, the matter is settled as far as the Chair is concerned, and if members wish to take any further action, this would be their prerogative.

Introduction of Bills

GROWTH STRATEGIES STATUTES AMENDMENT ACT, 1995

Hon. D. Marzari presented a message from His Honour the Lieutenant-Governor: a bill intituled Growth Strategies Statutes Amendment Act, 1995.

Hon. D. Marzari: Rapid growth is the single most powerful force propelling economic and social change in our province. Communities throughout British Columbia, particularly in the fastest-growing regions, are struggling with urban sprawl, air pollution, loss of green areas and agricultural land, traffic congestion and lack of affordable housing. They're struggling because these problems transcend the local boundaries of municipalities, and British Columbia's local government planning system does not support integrated planning at the regional level.

This legislation will provide the foundation for a better, more practical relationship between the province and local governments, so that we can pool our resources and coordinate our efforts to capture the positive benefits of growth. Clean air and water, livable and safe communities, green space and parks, efficient services and jobs are the goals we are all pursuing, and this legislation will take us one giant step in that direction.

I'm very proud that this bill provides explicit recognition of the vital role that local governments play in developing long-term solutions to the growth-related challenges we all face. I'm also very proud that this bill is the product of close cooperation and consultation with local governments. It responds very closely to their needs as they have been expressed to me over the last year and a half.

Bill 11 introduced, read a first time and ordered to be placed on the orders of the day for second reading at the next sitting of the House after today.

[2:30]

Oral Questions

WCB REGISTRATION OF BABYSITTERS

G. Campbell: On March 22 the Minister of Skills, Training and Labour rescinded his decision that the minimum wage would apply to babysitting in British Columbia. We have now been informed that the WCB has decided that single parents and families who have to hire babysitters for more than 15 hours a week are required to register with the WCB, pay assessments and have their homes open for inspection.

My question is to the Minister of Labour. Will the minister act today to rescind this ridiculous intrusion of the WCB into the lives of British Columbians?

[ Page 13460 ]

Hon. D. Miller: The WCB is run by a board of governors that is representative of the employers and the labour community of the province, and has two public interest governors. Those decisions are made by the board of governors; they have responsibility for their decisions. If the member has opinions with respect to decisions made by the board he should convey them to the board.

The Speaker: Supplemental, hon. member.

G. Campbell: My supplemental question is to the Premier. Unfortunately, the minister still doesn't get this. Single parents spend enough time and make enough effort to ensure that they have adequate child care for their children without having to waste their time filling out innumerable WCB forms and submitting their homes to unnecessary inspection. Once again NDP ideology has run roughshod over common sense.

Will the Premier direct his minister and the minister's deputy minister to instruct the WCB to rescind this order and to act to protect the families of British Columbia?

Hon. D. Miller: Last year the Liberal critic for WCB made a very declarative statement that there should be no political interference in the operation of the board of governors of the WCB.

Interjection.

Hon. D. Miller: I repeat: if there are members on the board who would be open to any ideas or complaints that the Leader of the Opposition has.... I would urge him to contact the representatives of the B.C. Business Council or the small business coalition who are on the board, and perhaps they will take up his concerns.

PAYMENTS BY PREMIER'S OFFICE TO U.S. POLITICAL ADVISERS

F. Gingell: Conflict-of-interest commissioner Ted Hughes believes that the Premier's office funnelled payments to the American spin doctor Karl Struble through Ron Johnson's NOW Communications to intentionally mask the true recipient of these taxpayer funds. When, Mr. Premier, did you first learn that the staff in your office, staff under your direction, were using this devious charade to deliberately deceive the citizens of British Columbia?

Hon. M. Harcourt: We have just had a very extensive and expensive review of this issue by the conflict-of-interest commissioner. He made two very important findings: firstly, I was cleared entirely of any conflict, real or perceived; secondly, he went on to say that, unlike the allegations that have come from the opposition, NOW Communications obtained any contracts that they have through merit and through existing government policy. This is according not just to what Mr. Hughes had to say but to what the existing industry had to say. Mr. Hughes made a couple of observations.

He expressed some opinions that right now are part of a review by the auditor general, who is going to be dealing with just these questions.

The Speaker: Supplemental, hon. member.

F. Gingell: Agreed: no conflict -- but a deliberate intention to deceive. When will the Premier advise this House that he and his party have finally learned the simple lesson that masking payments of taxpayers' money -- or charity money, for that matter -- is wrong, whether the masking takes place in the Premier's Office or in Dave Stupich's office in Nanaimo.

Hon. M. Harcourt: I have said that I was unaware of the details of the contract until the details came out in the study that was done by Mr. Hughes, and Mr. Hughes made that very clear. The opposition may not want to take the wax out of their ears or get their sight checked. If they read Mr. Hughes, he made it very clear that I had no knowledge of these contracts or of the details of this contract. I should say to the Leader of the Opposition and his cohorts that people who live in glass houses shouldn't throw stones.

J. Weisgerber: My question is to the Premier. Mr. Hughes has implied that the Premier's advisers did not tell him the truth about the deliberate attempt by the government to mask the payments to Karl Struble. Any reasonable person would take it from Mr. Hughes's comments that the Premier's staff essentially deceived him under oath. How can the Premier have any confidence in the people in his office who were responsible for that activity?

Hon. M. Harcourt: Mr. Hughes, I repeat, said there was no conflict, real or apparent, as far as the Premier was concerned. He said that NOW Communications obtained their work through merit. He expressed some observations and an opinion about a matter that is clearly in the jurisdiction of the auditor general, who is at this time reviewing the question of these particular contracts. On the administration of the series of contracts in the relationship with Karl Struble, I have said that the issue of more transparency of who was involved in those contracts and the details of those contracts are areas I intend to take up with my deputy and with the auditor general.

LINKS BETWEEN PREMIER'S OFFICE AND U.S. POLITICAL ADVISERS

J. Weisgerber: When I specifically asked for copies of memos and correspondence between the government and Struble-Totten, I was told that none existed. Yet Karl Struble testified that he did communicate so-called "work product" that included "notes on memos" and "memos they generated off conversations," with "they" being the Premier's staff. Can the Premier tell me why I, along with Ted Hughes, was deliberately deceived by members of his staff? Will the Premier commit today to table the information that I requested and that Karl Struble has now confirmed exists?

Hon. M. Harcourt: What we should table here today is something from the leader of the Reform Party for wasting many tens of thousands of taxpayers' dollars on an unfounded, unfair and politically motivated conflict inquiry that took up a lot of taxpayers' money to come to the obvious conclusion that I said from the beginning would take place. I think that's what should be tabled in this House, instead of the opposition of smear and fear -- whichever day it is they're up making their wild statements. I think we should be dealing with the real issues that are important to ordinary British Columbians: job creation and defending medicare from the right wing in this province and this country.

G. Farrell-Collins: Given the comments from the Premier, I assume he personally will be picking up the tab from

[ Page 13461 ]

the city of Vancouver for their driftnet fiasco and freedom of information there, where they tell nothing -- nothing.

My question is to the Premier. On the list of persons interviewed by Ted Hughes during his investigation, there is no mention of an interview having been conducted with Johanna den Hertog from his office, in spite of the fact that Struble-Totten was used by den Hertog in her September '94 trip to Europe. Did or did not the Premier inform Mr. Hughes about the personal relationship between Johanna den Hertog and Ron Johnson and the financial relationship between Ron Johnson and Struble-Totten and the use of Struble-Totten by den Hertog in her Europe trip?

Hon. M. Harcourt: The opposition are indeed running dry; they are indeed running dry.

They're quite prepared to waste this House's time and the taxpayers' money instead of dealing with the great accomplishments that have taken place in this province over the last three and a half years -- including an A minus rating from the World Wildlife Fund that we're going to improve on, including some magnificent land use changes that are bringing security and prosperity to British Columbia and creating more jobs than in any other area of Canada, and including the fight that we will carry on to preserve medicare from these people who want to cut and slash and have a two-tier health care system.

Those are the issues which we should be debating in question period instead of these spurious questions.

Interjections.

The Speaker: Order, please.

Hon. member, the supplemental question.

G. Farrell-Collins: The opposition and all parties are just trying to find the truth in this matter, and day by day it becomes clear that the truth is far from forthcoming.

Interjections.

The Speaker: Order, please.

G. Farrell-Collins: During the period immediately prior to and following den Hertog's European trip, over 50 faxes and phone calls were made to Struble-Totten from den Hertog's office at 999 Canada Place. Can the Premier tell us why he did not explain to Ted Hughes the relationship between Johanna den Hertog, Ron Johnson of NOW Communications and Struble-Totten?

Hon. M. Harcourt: The commissioner is quite capable, with a very experienced counsel, of asking the questions that he believed were important to deal with the issue before us, which is whether there was a conflict or not, and whether NOW Communications received any special treatment.

To now deal with a member of my staff who was an important part of our efforts to preserve the number one industry in this province's market -- that's the forest industry, in case they've forgotten about that in all the smear and fear campaigning they're doing....

Ms. den Hertog, with her knowledge of five different languages in Europe, and her knowledge of some of the key members of the European Parliament Environment Committee, was very instrumental in helping with my very successful trip to Europe, with the forest industry, with forest workers, with aboriginal leaders, to make sure that our forest industry wasn't harmed. That's what Ms. den Hertog was doing, instead of this guttersniping that's happening from the Liberal opposition and Reform.

U.S. PRIOR KNOWLEDGE OF TATSHENSHINI DECISION

R. Neufeld: My question is to the Premier. The Premier stated that Mr. Struble had no inside knowledge of major announcements he helped communicate. Yet Mr. Struble told Ted Hughes that he did get policy briefings from the Premier's advisers, including Chris Chilton, Doug McArthur and Thomas Gunton. Karl Struble said: "If we're talking about communications, you've got to first understand the policies that you're talking about before you can communicate them." Given Mr.

Struble's confirmation that he was briefed in key policy decisions before they were communicated to British Columbians, can the Premier tell us what advance knowledge, if any, Karl Struble had of the Tatshenshini decision before it was announced?

Hon. M. Harcourt: The knowledge that Mr. Struble picked up about policies, quite frankly, was seen by every British Columbian in our platform in the 1991 election. And that was that we would bring in an environment and jobs accord. That is, we would change the way we conducted forestry. That is, we would involve the people of British Columbia in protecting protected areas, in bringing about a new way of carrying out forestry, so that we could increase jobs as we have in this province -- 14,000 new jobs in forestry.

The investment of forest companies in the forest industry has gone up from $1.4 billion to $1.8 billion, showing their confidence in forestry in this province. And that is the information that Mr. Struble had access to, which all of the members had access to, and which we won the last election on.

The Speaker: The bell terminates question period.

Presenting Petitions

D. Mitchell: I would like to present to the House today a petition signed by 15,000 British Columbians -- I don't have them all here; they're in a couple of boxes over there in the corner. It states: "As B.C. MLAs enjoy gold-plated perks and benefits that are a gross double standard compared to what is available to the province's taxpaying citizens." Therefore, your petitioners respectfully request that the honourable House "reform the following MLA perks": the MLA pension plan, the clean-office policy, tax-free allowances and the MLA severance plan. There are 15,000 signatures that say we should do that.

[2:45]

R. Chisholm: I'd like to present a petition on the prisons in the Chilliwack valley. At this moment, 3,067 letters are being taken to the Premier's office. The people of the valley are protesting the increase of prisons in the valley, and there is a new $17 million prison planned at this moment. They have asked me to petition this House to look into this drastic situation that they are very, very appalled by.

Orders of the Day

Hon. G. Clark: I call Committee of Supply A for the purposes of discussing the estimates of the Ministry of Small

[ Page 13462 ]

Business, Tourism and Culture; and in the House, I call committee stage of Bill 7.

COLUMBIA BASIN TRUST ACT

The House in committee on Bill 7; D. Lovick in the chair.

section 1.

D. Mitchell: I have a question on the procedure on this bill. Do you propose to deal with the

preamble last, or do you want to deal with the

preamble now?

The Chair: Normal procedure is to deal with the

preamble last. Unless there are compelling arguments otherwise, we'll do that.

D. Mitchell: Fair enough, hon. Chair. We'll save the

preamble till last. I do have a question on the

preamble itself. Not every bill brought before this committee has a

preamble, and I'd like to ask the minister for some clarification on one aspect of that.

section 1, which deals with the

interpretation and

definitions in this act, I do have a couple of brief questions under "Interpretation" for the minister. First of all, the first definition offered in the

interpretation

section deals with "corporation." The minister has been on record as talking about the trust as a regional corporation. He's also referred to it, I believe, as a quasi-Crown corporation. He's also said this is a corporation that has unprecedented autonomy. He's made a number of rather grandiose comments about what this trust in fact is.

I would like to ask him, because the definition isn't really very explicit under this act, if he could tell us very clearly what this trust is. Is it a Crown corporation? Is it a quasi-Crown corporation? Is it a trust? Is it a utility? Can you please define it for us?

Hon. G. Clark: It is not a Crown corporation in that sense; it's not an agent of the Crown. It is a corporate entity which we have a role in and a share of, but it is not a Crown corporation.

D. Mitchell: Could the minister, then, just be a little more forthcoming about this? If the corporation is not a Crown corporation and not an agent of the Crown, but it's an entity that we as the province of British Columbia have some interest in, how would we describe it then? Are there any other models he could point to, so that we could say this trust is like something else that's clearly established already in the province? Or is it unique?

Hon. G. Clark: It is unique. There is no other precedent. It's not a Crown corporation or government corporation, because even though it has one share -- and the Minister of Finance owns the share, as you'll see later on in the bill -- it's not a voting share. That makes it quite unique and quite distinct.

We wanted to try to develop something unique with the people of the region which would give them control over this entity but which would still have the reporting requirements, legislation and transparency requirements that the government would bring to it. That's why we.... There was a lot of debate about this -- how many members of the board of directors the government of B.C. should have, and all those kinds of questions. This was arrived at in consultation with the communities of the Kootenays and the Columbia Basin.

G. Wilson: Hon. Chair, I have a question of procedure that I'd like your ruling on. Because this Columbia Basin Trust Act is so heavily implicated by the memorandum of understanding with respect to the Columbia Basin accord, which.... The minister is shrugging his shoulders. I'd say that $500 million is a fairly significant implication, along with about a 25-year commitment beyond that. I'd like some ruling as to the extent to which we can canvass that accord in relation to the sections as we go through them.

The Chair: Member, I guess that all I can do is invoke the normal rule governing committee -- namely, that debate must be strictly relevant to the

section under discussion. Clearly, you make a case prima facie that there is that connection, and it would seem to me that a reasonable canvass of the issue you refer to would be appropriate -- not, however, having a debate about the advisability of that other mechanism. I hope that clarifies a little how I will be guided in this.

G. Wilson: I'm certainly not suggesting that anybody is going to try to play politics with this question, but I think it is of significant interest to people -- in the Kootenays in particular, but also to all of British Columbia -- as to how this trust, which is a new creature in this province, is going to work, given that there is already, de facto, an agreement with respect to funding and how that funding is going to be applied. I think it is a relevant matter, and I would appreciate that latitude.

The Chair: I think we'll work on the assumption that we do indeed have an understanding. If I might just add one final caution for everybody's benefit, however: we have had a second reading debate on the principle, so if we talk about the existential premise of the memorandum, we're clearly straying far afield. If, however, we're talking about its impact on this bill and particular sections, we are within order, it seems to me.

Hon. G. Clark: I was going to say that that leaves me out of the debate, but.... Sorry.

I would like to introduce my staff today: Blair Redlin, who is the assistant deputy minister for economic policy in the Ministry of Employment and Investment; and Michelle Poirier, who is the project officer in the employment strategy branch of the Ministry of Employment and Investment.

D. Mitchell: We're still on

section 1, under the

definitions. The minister has indicated that when it comes to the definition of the trust as a corporation, this is a unique entity; there is no model for it; it is unprecedented. The minister also said that this entity will have unprecedented autonomy in terms of its ability to deal with investments in its region.

Hon. Chair, I guess there's another question of procedure here that we could raise: the fact that this announcement was made outside this House, before the government ever brought

[ Page 13463 ]

the bill to the assembly. There is a question of the cart being put before the horse -- a question of presumption -- and a question, I suppose, of legislative privilege in terms of us being consulted after the fact.

Having said that, the minister has indicated that the corporation itself is going to receive a significant share of public funding. Yet the minister has said clearly that it's not a Crown corporation; it's not a quasi-Crown corporation. In fact, the government has a share in it, but it's a modest share. Can the minister tell this committee today whether or not we, as legislators who are being asked to approve this measure today, should have any concern about the unprecedented autonomy of this corporation, which is going to be funded largely by the public purse?

Hon. G. Clark: This is part of the debate we had with the region, to be candid. The region would ask -- many of the civic leaders, regional district politicians or average folk who attended literally dozens of meetings on this question -- how much autonomy there was versus how many provincial government strings attached, etc. The way we resolved it was that this corporation is created by

an act of the provincial parliament. It does give unprecedented autonomy, and that's certainly what we intended; but because it's created by

an act of the Legislature, the Legislature at all times has the opportunity to revisit the legislation at some future date. I think there is a balance between how much local autonomy there is and the role of the province in this question.

The role of the province, I think, is intact and significant, in that it's created by legislation; legislation can be changed by future governments. There is a third of the board of the directors, so the province is always informed of the decisions being made; there's a very close informational relationship there. The regional representation on the trust is made up of elected politicians or people appointed by elected politicians in the regions. You'll see later on in the bill that there's a certain accountability in public input requirements.

I think that that should give members some comfort that, while there is an unprecedented amount of autonomy, there is a significant investment being made in the region, and there is real local control.

There are sufficient safeguards for the province as a whole -- for the public interest as a whole in the province -- to be protected by virtue of our share of the seats on the board, by virtue of the openness and accountability in the bill, by reference to the fact that the elected politicians in those regions will have some control, and by reference to the fact that, at the end of the day, the corporation is created by statute of this House and can therefore be changed by statute of this House.

D. Mitchell: I think that, given the record of this government on accountability or the lack of accountability of Crown enterprises -- whether it be Crown corporations or other agencies -- we should all be concerned as legislators. Even members of this committee who support the principle of this bill, who may have spoken to that during second reading debate and who believe that some kind of investment or endowment of a legacy fund should be made in the Columbia-Kootenay region, should be concerned when the province -- this government -- wants to create a new entity with unprecedented autonomy.

It's a unique corporation or trust. I don't think the concerns about accountability have been adequately addressed. We'll have a chance to canvass them a bit more later on in the bill.

Hon. Chair, I'd like to ask the minister one other question about the

interpretation section. There's something missing here: a definition of the minister. Throughout the bill, in many other clauses, the bill mentions the minister; it says that the minister may do this and the minister may do that. But under the

interpretation section, under the

definitions, the minister is not clearly defined. I'd like to ask if we can be told today in committee if it's implied that it's always the Minister of Employment and Investment that is being referred to, or whether or not the minister is referring to the Minister of Energy, Mines and Petroleum Resources or other ministers who may have an interest in this.

Hon. G. Clark: When the minister is not referred to specifically, it means the minister who sponsored the bill in the House. The Minister of Employment and Investment is the sponsoring minister, under whose name the bill stands. It's not necessary to refer to that title in the text of the bill. Only if there were another minister who, for some reason, had some authority being granted under the bill would you have to define it as another minister.

W. Hurd: Just a further series of questions, then, on how we're going to deal with the Columbia Basin accord, which is wrapped up with this bill. Clearly, there are a number of obligations from the parties. In fact, if we look at the Columbia Basin accord, we see reference made to a partnership and the investment of some $500 million. Can the minister clarify whether or not the existing accord has any force in law, or does that only come into effect when this bill is passed, creating this corporation? I think that's an important clarification.

There must be some way in this act that we can review the expenditure of some $500 million and examine the nature of the partnership between the trust and the province. I would just ask for clarification on this point: is the Columbia Basin accord, which is an agreement between Her Majesty the Queen and the Columbia River Treaty Committee Inc., a legal document, or will it only come into force of law when this bill proceeds to royal assent?

[3:00]

Hon. G. Clark: That might well be a question of legal

interpretation. For all intents and purposes -- from my perspective, speaking on behalf of the government -- it's a document that we intend to fulfil. It is binding on the part of government. We entered into it freely, and we signed the memorandum of understanding.

The memorandum of understanding does refer to a subsequent legal document to be engaged. That is my recollection, in any event. We could certainly refer to that; I'll have my staff refer to it while we're discussing it. My understanding is that it refers to a subsequent legal document. I will say that it may well be more of a political commitment at this time, at least until the bill is passed by members of the House.

Just in making a general statement, if the members opposite are opposed to investing this kind of money in this fashion, they should vote against the bill. That's the debate in the House. I welcome the members opposite to oppose the bill.

I might remind members that in the memorandum of understanding -- given the latitude the Chair has given to discuss these questions -- there is a share from the province

[ Page 13464 ]

and from, in this case, the regional trust. I look forward to much discussion during my estimates about the provincial contribution. That might be a more appropriate place to have a full debate and discussion. Under estimates, the province is an equal contributor, and therefore there is full accountability with respect to how that's spent.

W. Hurd: This is an exceedingly important issue. The memorandum of understanding is clearly an agreement between Her Majesty the Queen, in the right of the province of British Columbia, and the Columbia River Treaty Committee Inc. It is signed by the Premier of British Columbia and Mr. Josh Smienk, chairman, on behalf of the Columbia River Treaty Committee. Is it a legal document or is it not? Does it come into legal force as a result of us eventually approving Bill 7? I think it's a very good point, because the Columbia Basin accord contains all the information that will bind the parties over a ten-year period.

There are totals of revenues mentioned that will be advanced to the treaty committee. If we are prevented from engaging in any review of the basin accord during this discussion, then we're clearly being denied an opportunity to properly scrutinize this bill.

The Chair: It sounds to me like the member's comment was suspiciously like a point of order. Let me try again to clarify, if I might.

By the rules of this chamber and by the rules governing committee, we are empowered only to deal with the specific sections of this bill. The larger questions about the advisability of the bill and other attendant documents or agreements are for a second reading debate. I think the minister tried to clarify the legal question the member posed, and on that basis I said that for clarification we'll let that proceed. To have a debate now about the accord, however, I think is entirely out of order, with all due respect.

I would say to the member, however, that as the minister pointed out, the member and other members will indeed have an opportunity to canvass those sorts of questions in the minister's estimates. Having said that, I'm going to caution all of us, then, to stick to

section 1.

Hon. G. Clark: I want to make just one further point on that. Members should be reminded that the trust can still proceed even if the accord didn't. So the linkage that the members want to make.... I appreciate the discussion. This bill stands separate and apart from any political decision, if you will, that the government has made to provide funds to the trust. That's a separate debate, which I know members opposite may well want to oppose. This trust creates an entity which in itself is debated here in the House, not what the government may choose to bring forward to that trust.

Having said that, I have just one further point. If they'd like, I will certainly undertake for members a formal -- I shouldn't say formal; that's too expensive -- or informal opinion, if I can gather one from my ministry, in terms of the legal question. It's irrelevant to me whether it's legal or not; there's a political commitment made with respect to the accord that we fully intend to live up to. If members opposite don't want to live up to it, then they can campaign in the next election saying they're opposed to living up to it. I welcome them to it, and I fully expect they'll do that.

But for technical clarification for members -- even though it's off topic, Mr. Chair -- I'd be happy to ask staff to give me a sort of legal quickie, a verbal legal question, which I'll relay to members opposite.

W. Hurd: I would at this point settle for an assurance from the minister that the committee will have the opportunity to examine the partnership arrangement between the province and the trust during some aspect of this bill. Having received that assurance, I think we can deal with a number of other funding-related issues. I would ask direction from the Chair as to in which

section of the bill it would be appropriate to canvass those particular issues. I suspect that it might be

section 4, the purpose of the corporation, or the

preamble. But the wording in

section 4 is mysteriously like the wording of the partnership in the basin agreement. But I'd certainly happily settle for a ruling on that or some sort of....

The Chair: With agreement, we'll say

section 4, in the event that we get to

section 4 before we have that legal opinion. I don't know if that will be the obstacle. If that isn't the obstacle, then we'll deal with it under the

preamble. But we'll assume

section 4. I hope that's satisfactory.

J. Tyabji: In

section 1 we see that the definition of tribal council' means -- and my pronunciation might not be great -- the Ktunaxa-Kinbasket Tribal Council. I'd like to know how the tribal council is decided. Who are the voting members who make up this tribal council? And to what extent does the province have any jurisdiction?

Hon. G. Clark: I'll try the pronunciation first; I think it's Ktunaxa-Kinbasket Tribal Council. The tribal council, unlike the other delegates on the Columbia River Treaty committee, actually.... The delegates that were at the table in negotiations with the province did not have the authority to sign any agreement until they went back to the tribal council for a full democratic vote, which they did. We did not supervise that vote.

We were fully cognizant of the tribal council's jurisdiction in that regard, and we were quite prepared to accept the wisdom of the delegates to the CRTC on the basis of their processes. My understanding is that they had a vote at the tribal council, and the vote was unanimously in favour of agreeing to sign on to this historic agreement.

I might just say, if I can, that the process we went through was exhaustive, and the role of the delegates from the tribal council was really outstanding. I think there was real leadership in the community, among the Ktunaxa-Kinbasket people, and it was just a pleasure in terms of the negotiations and discussions and the process that they undertook. I was personally always a bit nervous when it went back to the people of the tribal council -- even though I was quite confident -- and it was very heartening that the vote was unanimous in favour of this agreement.

I think that demonstrates yet again the tremendous support and the process we went through to arrive at this historic agreement, which culminates in the act today.

J. Tyabji: How many voting members are there in the Ktunaxa-Kinbasket Tribal Council? If the province does not supervise the vote, is that done with some federal supervision? What is the accountability process for that? Is there a provincial appeal mechanism or input for the members directly to the province?

Hon. G. Clark: No. I don't know how many members there are, and nor does it concern me. Secondly, there's no provincial and no federal monitoring role, I believe. Frankly, I find it just a hair paternalistic or offensive that you might

[ Page 13465 ]

suggest there should be some kind of role. My own view is that this tribal council, in a very mature way, took it back to their people for a full discussion. My understanding is that it was a full and exhaustive canvassing, discussing and debating that arrived at a consensus position, which is quite common. I wouldn't support, frankly, any intervention on the part of the province. At the end of the day, you know, these things can only be supported if there is support.

Not to make a tautological observation, I think there has to be a sort of community of good will and support from the people of the tribal council, and there is that. If at some future date there isn't, then I'm sure the tribal council will have the appropriate remedies as a nation in British Columbia to handle these questions on their own. I don't anticipate any provincial interference in any process that they might set up.

J. Tyabji: I think it's interesting that the minister feels that any senior level of government monitoring an election, which is supposed to be due process, is perceived to be paternalistic. When municipal or regional district governments have their local elections, I don't know that the government's ensuring that there is due process is considered to be paternalistic. I think that's called due process. So what the minister is saying, in effect, is that he has in the definition the words "tribal council." We know that later on in the bill there's a serious impact.

We know that there's a large issue in the area with the tribal council arbitrarily moving the boundaries so that suddenly they have greater jurisdiction over the future of this. We know that there's an aboriginal treaty negotiation process ongoing with the tribal council.

The minister doesn't know how many people there are, what process they followed, when it was done or even if there was due process. But he's comfortable allowing them to arbitrarily change their boundaries so that they have greater jurisdiction over a $1 billion series of hydro projects. I find that to be a very interesting approach. If this provincial government is going to ensure that the public's trust, including the aboriginal public trust, is protected, I think there is a cooperative effort that ensures due process for all members, not just the delegation that happened to come to the table.

If there is no method for the province to have any kind of dialogue with the membership of the tribal council directly, to what extent is this definition going to relate to the aboriginal treaty negotiation process, to the talks that are ongoing with the Ktunaxa-Kinbasket Tribal Council? We see that it is directly tied to both the bill and the memorandum of understanding.

Hon. G. Clark: First of all, I don't think aboriginal people would accede to the idea that there is a senior level of government, being the province or the federal government. They would argue that their level of government, which was here first, of course, has jurisdiction to discuss among themselves how they wish to participate. Secondly, let's put it in context that the tribal council here gets two out of 16 seats on the board of directors. They have no authority to act without the support of at least, I guess it is, seven other directors supporting them.

So one shouldn't get too carried away about the role of the tribal council to act unilaterally in this matter. They have a role: it's an entrenched role, but it's not one that they can exercise in and of themselves. So I don't think it's all that significant that they have two members of the board of directors, that they choose them and that the province is not going to have any say in how they choose them. That would be my very strong view.

In addition to that, I don't understand the.... I know there's a question of accountability; we'll get to that later. This corporate entity and the individual components of it is where there's the question around accountability. We leave to the tribal council the accountability of the two members of the board from the tribal council; it's to the aboriginal people themselves to choose that. I have no problem with that. If the member does have a problem with that, then quite correctly she and her party should vote against this legislation.

G. Wilson: Maybe I could come at this from a slightly different angle, given that we are on

definitions here. We're trying to focus down. My colleague raises an extremely valid point that the minister wittingly or unwittingly -- I'm not sure how much wit he has about him today -- somewhat avoided. We notice in the definition of region that you have defined in (

a) through (

e) each of the regions that is then represented in

section 5(

a) through (

e) as having a land jurisdiction.

Essentially, you've argued in the definition that it's the Regional District of Central Kootenay, that there's the Fraser-Fort George Regional District or a very small portion.... And I'd like to talk about how you came up with that, because if you look at the map, it's interesting that you sort of crossed drainage divides and a few things, which we'll talk about in a minute. Then you talk about the Columbia-Shuswap Regional District, the Kootenay-Boundary Regional District and the East Kootenay Regional District. So it's very specific with respect to the regions in terms of the authority granted the ten regional directors who are going to be appointed under

section 5 of this bill.

[3:15]

But there is no mention, in terms of the provision of region, as to what we're dealing with concerning the Ktunaxa-Kinbasket Tribal Council in respect of the territory or region over which they have some authority or jurisdiction. We know that this definition is going to be critical, because a parallel process is underway. I don't mean to get into that debate at this point, but I do mean to raise or flag it. Under the Treaty Commission process, there is a parallel process that's going to greatly impact on this definition in terms of jurisdiction and authority over this particular entity.

In fact, if the minister is correct and there is no recognition that there is some kind of law subjugated to those of the province and the federal government, and if this is a first nation that stands almost in a sovereign state, then it may render this entire bill completely redundant at the end of that process. The downstream benefits may not even go to a British Columbia entity but may in fact go to a first nations entity, which is another debate.

The question, then, directly on this specific issue on the regions is: where in this definition is the defined territory that would be the purview of the two members from the Ktunaxa-Kinbasket Tribal Council, given that every other member has their region very clearly defined?

Hon. G. Clark: The member has deduced from this bill an excellent point, in that there are members from the region who represent the region geographically, and then there are two members who do not represent a defined geographic region necessarily but rather are interest-based representation on the board. Therefore if this definition here overlaps with the traditional territories of the Ktunaxa-Kinbasket Tribal

[ Page 13466 ]

Council, it clearly overlaps. This is the geographic region as a whole. It refers to the legal

definitions as such, because of the basin itself and the legal structures that exist -- mainly regional districts. The region agrees with this.

The tribal council is dealt with on a without-prejudice basis for representation of aboriginal people in the region in an interest-based way. I certainly have no problem with how they choose to define that. Everybody up there, if you will, in the region knows that the tribal council has an administrative structure. They are aboriginal people up there, and we felt very strongly that aboriginal people should be represented in this process.

Aboriginal people, I'm delighted to say, joined in this process, even though they are not in control of the process. They joined the process as part of it, as opposed to being separate and distinct. Every discussion with aboriginal groups -- and I would do the same thing if I were them -- is without prejudice to any negotiations in the future with respect to their legal entitlements.

If you look at the accord, Mr. Chair, I am sure it says "without prejudice to any future land claims negotiations." If it doesn't, I'd be very surprised. So we would not be very smart to try to define the region for which the tribal council is represented geographically when it's the potential subject of either litigation or future negotiations. In fact, we gave two seats out of 18 on the board -- I think I said 16 earlier -- to the tribal council on the basis that aboriginal people should be represented as a sector, if you will, as an interest-based representation as opposed to a specific geographically-based representation.

G. Wilson: I appreciate that somewhat lengthy but informative explanation. Given that they are interest-based and not geographically defined, one might argue why other tribal councils weren't included that may have overlapping claims. That would be another issue which, again, we're not going to get into in the debate here -- at this time, anyway. There may be an opportunity later with respect to other sections of the bill.

I want to focus on this question of regional allocation, because it ties directly to the region as it is defined above. It talks about moneys paid by the government to the corporation for the corporation's purposes, and that's given the regional allocation. Within this bill it's made very clear -- and that's reinforced under the accord -- that any moneys that come into this corporation do not in any way obfuscate local government from their duties and obligations to perform the normal kind of functions that they have.

I would argue that the bill also says, later on, that any moneys that come into this corporation through this regional allocation do not obfuscate the provincial government's obligation and responsibilities to the larger mandate that it may have to finance.

My question is: given that there is a regional interest only with respect to the Ktunaxa-Kinbasket, and given that the downstream benefits -- according to the

definitions of this bill with respect to the provisions we see in front of us, as well as the accord -- are to provide some restitution or some compensation for alienated lands or lands lost, or costs associated with the Columbia River Treaty, will this corporation be liable for the payment of any of those compensations with respect to the Ktunaxa-Kinbasket claim? Quite clearly, the moneys going into economic development issues and other sorts of issues that are going to come out of the expansion of the Brilliant and Waneta dams, as well as the Keenleyside project, are going to very definitely be subject to the successful negotiation on that other process.

So my question is: what obligation or liability is this corporation likely to find itself in with respect to taking those revenues, which could quite arguably be claimed under the Treaty Commission process, to be paid then to the Ktunaxa-Kinbasket Tribal Council...? Has that been explored or discussed? That's why I'm asking about the definition, because if it isn't defined with a specific region and if they can talk about it as an interest in the Columbia Basin, it strikes me that they've got a tremendous claim to simply take the assets of this corporation as part of their land claim.

Hon. G. Clark: The problem with this line of questioning is that they are sort of abstract questions which are based on a whole series of assumptions. It's very hard to get into: what would happen if this happened, if that happened, if this happened? This agreement is without prejudice to any aboriginal settlement. I can't comment on what the terms of any future settlement -- if there's a future settlement -- would be. Therefore this corporate entity, this Columbia Basin Trust, will be developing significant assets. And it will presumably be affected the same way anybody else is or is not affected in the region, subject to negotiations.

If I could be cavalier about the question, it seems to me that the provincial government is not likely to enter into any agreement without broad community support from aboriginal and non-aboriginal people. This entity is such a magnificent achievement for the region that I'd be very surprised if a provincial government would want to give or negotiate that away in any future discussions with the tribal council.

It's completely without prejudice. It's a separate issue, and it has nothing to do with this legislation. This is without prejudice to any future discussions.

I gave an undertaking and discussed the question with a couple of lawyers, and although I find it very hard to believe, I gather they agree. I'm sure that if we discussed it with other lawyers, we might get other

interpretations, but our understanding is that the memorandum of understanding is not legally binding, although apparently one might argue the case. It's clearly a commitment on the part of the government, one which I've made repeatedly, and it's currently under public discussion and consideration in the region. Should the Columbia River Treaty Committee go forward and sign the final agreement we are negotiating now, it will be legally binding.

The last point in the trust says that the province and the trust intend to enter into a formal written agreement regarding the content of this memorandum. That's under discussion. When that is agreed to and signed, it will be legally binding. While there's always an argument when it comes to lawyers, our understanding at this point is that it is not legally binding until there's a legal document signed.

G. Wilson: I'll come back to some of those issues under more specific questioning later in the bill. I'm curious to know whether the minister would even be aware that this might be a subject of that negotiation, but I think there is a place later in the bill where we can get to that legitimately without straying too far.

[ Page 13467 ]

I will come then more specifically to the definition of region B. What has been done here is that a portion of the Regional District of Fraser-Fort George has been defined. I've taken the trouble of having the regional district forward me a fairly detailed map of exactly where it is, because there is some dispute as to what the Columbia Basin includes and doesn't include. I don't want to get too specific on each river, valley and mountain, although with respect to the Canoe River boundary, it is interesting to notice how it varies between taking the boundary per se and taking what is called the watershed of Baker Creek and of Canoe River.

I come to the question of watershed because this is likely to be a dispute, and I can see that this might in fact be a legal complication. My suggestion is that perhaps there's an oversight in the bill, in the sense that it would have been useful to have had a definition of the term "watershed" with respect to the Columbia Basin, so that this kind of distinction would have been made and so that geographers such as myself who look at this don't say that this definition doesn't fit what's on the map.

Hon. G. Clark: I have a noted expert, the member for Nelson-Creston, at my side. In my discussions with the region, I have to say to the member that at no time have I had members of the region either writing me, phoning me or complaining to me or members of the government caucus from the regions, saying there is a dispute as to what constitutes the Columbia Basin -- the drainage area that is the Columbia. I think there is agreement on this question. If the member knows otherwise, he could forward it to me.

I will say that

section 31(2) of the bill permits changes to the definition of the region, if the region decides. But I have not heard a hue and cry around this definition. It's generally accepted in the region. I think there is broad consensus on it. In the bill here is a legal definition based on everybody's understanding, as I understand it, at least, of the Columbia Basin. I've heard no representation otherwise, except for the member now saying that there is a dispute as to the territory.

G. Wilson: I'm not trying to be obstreperous here in any way; I'm just trying to define it. The Fraser-Fort George Regional District is a huge regional district -- as this minister, I'm sure, is aware -- that extends from Williston Lake in the north, all the way down through Valemount and into the Columbia Basin. It's only the very, very small portion in the bottom that is included in this definition, yet it has two elected members who sit on this trust, and they will be beneficiaries, presumably, of any revenues that are generated from it.

So the question, then, is: if there is to be money put into employment opportunities, and if this thing works as I would like to see it work and as we would support it to work -- I'm not sure that the government has quite got there yet, but we're hoping to change their mind on a few things -- to what extent is the Fraser-Fort George Regional District the recipient of that proportional share? Or would they be through the trust? Or to what extent are they bound to only that southern region and the boundaries that are very specifically outlined in this bill?

That is a legitimate question, because I even think the minister might suggest that the boundaries actually exclude Valemount, as it's been defined here. We've done a very quick pencil drawing on a map, but according to the wording in this.... And believe me, if the minister has ever been involved in municipal boundary altercations, he'll know there is nothing that gets the sentiment of people whipped up as fast as being either in or out of something they want to be either in or out of, when it comes to drawing the line of a municipal boundary or, in this case, a regional district boundary. So I think the minister might want to comment specifically on region B.

L. Boone: As a representative for that area, I would like to advise the member that Mona Grasdal, the representative for the Fraser-Fort George Regional District, sat on the CRTC, as did Jeanette Townsend, the mayor of Valemount. These two individuals have no question as to where the division takes place and the fact that Valemount is clearly recognized as being the community that's in that treaty and that it has been affected by the Columbia River Treaty. I've never heard from the mayor of McBride, and let me tell you that the mayor of McBride is not someone who would not let me hear from him if he thought that he should be included in that area.

Mona Grasdal, the regional district representative from there, is also very clear as to where the interest is and what part of her region would be affected by the Columbia River Treaty and by this trust company.

[3:30]

There's been such a tremendous cooperative movement by all the individuals who worked with Josh Smienk on this whole area. Just in talking to what the member said in the past with regard to some of the divisions there, one of the things that I think is really important is to recognize that each and every one of these people who sat on the CRTC and were with this area see themselves as representing the whole region, and do not go into a sort of parochialism with regard to their own communities.

If you're concerned about the divisions there, I can tell you that the regional district representative is clear as to where the boundaries are and what area she represents, as is the mayor of Valemount. This process has been very inclusive of everybody there, and I would urge the member to contact these individuals if he's not satisfied.

G. Wilson: I have only one further question. We actually have been in contact with a number of people there. I'm delighted to hear that there's such huge support, because...

An Hon. Member: So will they.

G. Wilson: We might, and they probably will, also.

...we seem to be hearing from people who have concerns, so that's interesting.

But with respect to this, all I'm trying to do is get a clear definition, and I'll come back to one last question in terms of the regional allocation. It seems to me that this is a corporate allocation, which is going directly into this new entity that's coming out.

I want to hear the minister say that the regional allocation that will be made through this -- well, it isn't a Crown corporation -- new strange entity that's being developed is not going to in any way mitigate the government's obligation or responsibility for normal regional allocation that may be found under the Municipal Act or through any other division of assets of this province.

There is concern that what's happened here is that we're going to get three big dams, or an extension of two and the

[ Page 13468 ]

Keenleyside project, and that basically this is a recipe for the government to off-load borrowing to a new entity in the Kootenay area.

Hon. G. Clark: I can certainly make the commitment to the member. I think their MLAs, in particular, but also all the politicians in the region were acutely aware that they did not want to be party to a new corporate entity with access to significant income over time, which would simply displace the province's commitment to the region. The provincial government would no longer fund schools and roads, etc., and would simply say: "Well, you paid for it, and you've got this new entity." That's not contemplated at all. In fact, later on in the bill you'll find that we specifically made reference to the fact that this is not to supplant. In fact, if you read

section 4(2), it says: "Nothing in subsection (1) relieves any level of government from any obligations it might have with respect to the region." We feel very strongly about this. This must truly be incremental for economic development purposes supported by the trust.

D. Mitchell: The

interpretation

section of most bills offers

definitions for clarification. It's interesting that during this discussion we've become increasingly confused about a lot of the terms we're going to be using in this bill. It makes us wonder why we have a

section in here dealing with the region, when the region, as the minister says, is not very specific at all, and it's kind of an abstract concept.

I don't want to pursue this too much further, but I would like to ask the minister one thing. During second reading debate on this bill, the minister will know that it was raised that the Columbia River Treaty, which this bill is pursuant to, was part of the famous two-rivers policy of the government back in the 1960s. The Columbia River Treaty would not have proceeded without the simultaneous development of the Peace River. When we define the region this trust is going to be working with.... Did the government give any consideration to extending that trust to include the Peace region as well as the Columbia-Kootenay basin?

Hon. G. Clark: I think it's fair to say, and I've said it publicly on occasion, that I'm quite sympathetic to looking at the Peace country as separate and distinct in terms of whether there isn't some way of giving people of the region some influence over decisions that affect them, particularly on economic development.

In this case, speaking personally as the minister responsible, I didn't give any consideration to Columbia River Treaty revenue going directly as part of this trust to another agency in the Peace. But as I say again publicly, I'm sympathetic to the notion of working on that question at another time. The return of the downstream benefits has given us a unique opportunity to address the concerns of the Columbia Basin. It's much harder financially -- somewhat harder, at least -- to deal with a similar kind of exercise in the Peace country, which was impacted by the hydro developments on the Peace.

C. Serwa: I guess I have concerns. I've listened to the minister speak in second reading debate with respect to the historic injustices and all of the other concerns he had in the development of this bill. When I look at the definition of "region," it's hard to relate the areas that are included with such historic injustices. For example, Rossland is included; it's perched way up high on the mountain just next to Red Mountain and Granite ski hills, yet it's included in this.

When you look at the Columbia River Basin, it is a very extensive and broad area, and certainly includes the Okanagan as part of the Columbia River drainage system. It's not directly affected, but it's not any less affected or more affected than a municipality such as Rossland.

It appears to me that when this was drawn up, the utilization of the definition of "region" was for those regions represented by government MLAs, rather than the regions affected. In fact, there was no intent to correct any historic injustice, if it ever was so -- rather, to shore up the current government seats. As my hon. colleague has pointed out, there is no accommodation for similar concern in the Peace River areas.

Hon. G. Clark: At the risk of prolonging debate.... I realize that I shouldn't be sensitive to these questions, but I really do find those remarks offensive, Mr. Chair. I think this is a much longer history than who occupies the seats at this given time. When you look at the debate in the region, this definition came from the people involved in the debate. Those people involved in the CRTC were not all members of the governing party by any stretch of the imagination, nor should they have been. This was something which generally has to have support from the region and from across political boundaries.

We have endeavoured to do that; I believe we've got that. I frankly reject the notion that we've undertaken this simply because we happen to have government members sitting in every seat in the Columbia Basin at this time.

Section 1 approved.

section 2.

G. Wilson: I just have one question that the minister can clear up fairly quickly, I think. This corporation being established, called the Columbia Basin Trust, is a new entity. It's going to have 18 directors, and this spells out how they get appointed, and that's fine. It has share capital, which we see happening in the next section.

It says: "The corporation is not an agent of the government." That's an important point. It will receive virtually all of its funding from the government, and it will also receive a virtually unconditional guarantee from the government with respect to its financing, at least in terms of the dollars that are going to be put into the three dam projects. We learn that from the memorandum of understanding.

So this is a corporation of elected officials who can potentially change every three years through an election, or they can potentially change at the whim of a regional district, which may appoint their representatives by whatever virtues or processes that they decide are appropriate. In a later

section we see that that can be done; the government isn't going to interfere. It doesn't have to be a consistent process; regional districts can do it differently.

So we've got this corporation that is not an agent of the government, and it is going to be handling hundreds of millions of dollars for at least three large capital projects. It is going to have a board of directors that is likely to change on a fairly regular basis within a two- to three-year period. The only appointments that are likely to be consistent are the six that may be appointed by the Lieutenant-Governor-in-Council, and that assumes that there is stability within the

[ Page 13469 ]

government and the governing authority. If they are political appointments, those tend to be somewhat tenuous as elections come and new governments are formed and so on, as we have seen in this province.

I have some real concerns about the consistency and the maintenance of this corporation in terms of its administration. We're talking about billion-dollar projects, or projects of that worth, and we're talking about its directors changing on a fairly frequent basis. That's a significant concern. It is not an agent of the government, and we therefore have to ask where its financial accountability is going to be given when the government has fully underwritten its financial affairs.

Hon. G. Clark: It strikes me that either you believe in giving local control or you don't; you can't have it both ways. In this case, I say this to all members of the House: have faith in the people of the region. We are giving an unprecedented amount of autonomy -- power, if you will -- and money to a regional corporation, which has people of all stripes on its board. All are from the region. If that member is unwilling to say that we should give that kind of regional autonomy, that Big Brother in Victoria should continue to manage the affairs of the region, then that is his prerogative.

It's not our position. Our position is this: this is unique and different, and we are giving the people of the region a significant amount of say in decisions that affect their lives as well as a significant amount of income. That's at the very heart of this bill, and I have no problem defending it. I think to do otherwise is simply not to make the kinds of changes required to really deal with the question of regional control, which has for so long been demanded by members of the region.

I want to go further and say that at the end of the day, this House is accountable to the public. This corporation is controlled by a statute of the provincial House, and any future government can change it. The logic of the member's remarks is that because the members who occupy government change every four years -- well, gee, we'd better be careful what we do because democracy might suddenly intervene and change the people in positions of power. Well, frankly, that may happen here too.

Democracy may intervene, and board members representing particular regional districts may be turfed out of office because they didn't like the way the trust handled a particular issue, and that's good. It's up to the people of that region to take control of that.

Just on this point, nobody in their wildest imagination should suggest that this is going to be easy. No one should be under any illusions that giving control -- a significant amount of power, if you will -- to this entity is going to solve all the problems in the region, nor is it not going to lead to intense debates between communities in that region. Everybody knows that. Everybody goes in with their eyes open. We've been up front about that.

We on the government side have faith in the people of the region to work cooperatively to solve those problems, but it is not going to be without tension or debate at any given time, nor is it not going to be the subject of regional elections from time to time, probably. I say: "Good stuff, let's let the people of the region have a say in their destiny for a change."

G. Wilson: I find it absolutely amazing that this minister would stand up in defence of this

section of this bill in this process and say that we should have faith in the people of the Kootenays. It was this minister who went in and signed a memorandum of understanding, committing the Kootenay region to $250 million and ongoing debt liabilities that are going to be on three hydroelectric power developments, before this corporation, which this minister says we should entrust the people of the Kootenays to determine how it's run, was even set up. I mean, they have set up exactly what this corporation is going to do before they even gave them the authority to determine if it was a good idea. Talk about hypocrisy. It's just unbelievable.

[3:45]

With respect to

section 2(5), the fact that this is not an agent of the government, which is my specific point.... The reason I argue this is that we have created a corporation run by politicians. I don't think that's a good idea. I don't think corporations run by politicians is the way to go. There's an enormous difference....

Interjection.

G. Wilson: I'm getting pulled into another debate by the member for Yale-Lillooet who's suggesting that British Columbia is run by politicians, and I suggest that there's $28 billion debt to show for it.

Having said that, there's an enormous difference between having a corporation established as it's spelled out in

section 2, which provides an opportunity for real investment in the region, run by an independent authority or an agency able to take representation from local governments, to hear from the public and to make sound and sensible investments.... I support that. In fact in 1987 I advocated that as the way we should go. There's a huge difference between that, which would be an agent of the government that would be....

An Hon. Member: The good old days.

G. Wilson: Those were the good old days, and this member should be happy that things changed the way they did, although he may not be in the long term.

The fact is that this entity not being an agency of the government is a problem, because it's run by politicians. The people of the Kootenays have not been widely consulted on this. We had representatives who discussed this issue at the last meeting that you had in the Kootenays, and there were all kinds of questions about how this thing was going to operate and whether or not it was a good idea for the $500 million to go into this thing.

So if we're going to have a change in the way that the directors work, surely the minister would agree that it would be sensible to amend this to provide for some stability in terms of its board of directors so that a board of directors would be appointed who were not politicians, who were not elected members, but who had some expertise in the running of a corporation and in the maintenance and management of investment opportunities.

We would go out and get the brightest and best minds possible to take moneys that would be coming back from the Columbia downstream benefits so that the people of the Kootenays could diversify their economy, could invest in something other than three new dams. This, to me, is a serious problem. I'd like the minister to tell us how he envisages this working if in fact it is a corporation run by politicians, which is exactly what this amounts to.

C. Evans: Leaving all the nonsense, rhetoric and other stuff aside, the member asked two real questions. One of them

[ Page 13470 ]

is how the thing is going to be accountable if it's not a function of the government. I would draw all members' attention to

section 26, which we're going to get to, where they will read that everybody in British Columbia will know everything that happens with every penny because it will be reported out in this room. If it is ever not reported out in this room, the members on the other side will simply stand up and ask how come it wasn't reported out. So the accountability issue is clear; it is not a function of the government....

Interjections.

C. Evans: What's the deal? I stand up and all of a sudden....

The second real question that he asked is how come they're all politicians; or maybe he asked how come they can't all not be politicians. This was the subject of a great deal of discussion -- first in Nakusp over a three-day meeting, then in Cranbrook over a two-and-a-half-day meeting, and then in negotiations between the Columbia River Treaty Committee and the government. It's a great question. It's a really important question. The Ktunaxa-Kinbasket Tribal Council may wish to appoint people. The Regional District of Kootenay-Boundary may wish to appoint people.

Then the Regional District of Central Kootenay might say: "It's important, it's a big issue here, so we want to have an election." They will be allowed to have an election.

When we -- we being the government -- met with the five regional districts and the tribal council, some people made a very articulate case that there should never be an election, because it becomes parochial. When running for office, you tend to say: "All the money should go to my town." Other people said: "If we appoint and the people don't feel there's enough accountability, ten years from now we may wish to have an election." The act was written precisely to address that so that people could choose; they could be appointed or elected.

You'll note from the act that the provincial government can also make that same choice. They can appoint an elected person; they can appoint a non-elected person. It's a very good question, but you'll see that the answer is also in the bill; it's not in the rhetoric.

The Chair: I would remind members that we are on

section 2, "Corporation established," and that the purpose of the corporation and the directors of the corporations are dealt with in other sections of the bill.

G. Wilson: Thank you, hon. Chair, for your direction; I won't make reference to the fact that when the member talks of

section 28 he should then read

section 30, which says that the Offence Act doesn't apply to this act or its regulations, which is another matter. But we'll get to that when we get there. I won't raise that at this point.

My last question, with respect to the underwriting of the loans, is to the member -- or to the minister or to whomever; I think the minister probably would want to answer this. If it is not an agent of the government, can the minister tell us under which statute it can provide the unconditional guarantee of its expenditures and accounts? How is that going to be maintained? In the memorandum of understanding, there is an unconditional guarantee of its financing. If it isn't an agent of the government, under what statute does this government have authority to do that?

Hon. G. Clark: It's a bit off-topic, but what we've agreed to, as I understand it -- and members here who might know more about it could correct me -- is really to make the three.... First of all, I don't think the member is referring to the capital allocation of $45 million and $2 a year; he's referring to the three big hydro projects, I think, which is about $1 billion over ten years, half of which would be equity and half borrowed. To make those viable, one of several things is required. The easiest way to make them viable is to agree to purchase the power at a certain price.

If anybody agrees to purchase the power at a certain price over a certain period of time, those projects are financeable anywhere in the world at any time. We've agreed that Powerex and West Kootenay Power are in discussions now, because West Kootenay Power needs power, and Powerex can sell power in the United States as a result of this agreement and, of course, the opening up of the market in the U.S. At a certain price, both of those agencies are quite prepared to buy all the power generated by all the dams.

If you agree to guarantee a price for the power, the questions then become: is the thing viable, and what rate of return would you receive on your equity? So we can do several things. We can guarantee the projects themselves for the region by borrowing the money on our credit line, and by extension.... We can do that by statute. We can borrow on their behalf, using the provincial government's borrowing power. Or an agent of the government -- in this case, B.C. Hydro or Powerex -- can guarantee without any legislative approval, can buy power from this agency at a certain price.

They do that every day of the week, and they're going to do that from private power producers. This will have the same standing as a private power producer in British Columbia. And they're looking for a long-term, firm price for that power to make those projects viable.

So we have two choices. The province has agreed to make these happen because we're satisfied, in terms of due diligence, that either of those options is satisfactory. The price of the power will make sense for B.C. Hydro, for Powerex or for West Kootenay Power, and therefore we've made that commitment. But no statutory requirement is required to make either a guarantee of the borrowing or a purchase price agreement for the power generator.

G. Wilson: It is interesting that these negotiations are underway. So much for local autonomy, local control and trust of the local public -- right? -- because Powerex and West Kootenay Power are involved. But that's another matter.

Interjection.

G. Wilson: Yes, it's an already-done deal which the people of the Kootenays will be pleased to learn about, I'm sure.

I want to come back to that very specific question because the minister actually didn't answer it. It's not a trick question. I'm not trying to cause a political debate to break out here on the merits of this particular.... I'm curious to know from a legal point of view. I don't know the answer to this and I'm not trying to entrap the minister, but if this is not an agent of the government, then how is the government able to provide an unconditional guarantee with respect to financial transactions that this company enters into? Under what statutory authority is the government acting? It's a very simple question.

[ Page 13471 ]

Hon. G. Clark: The Financial Administration Act.

R. Neufeld: The corporation is not an agent of the government, and I appreciate that the minister explained earlier that you want the people of the area to make the decisions. It's been explained quite well how the decisions are being made.

I want to go ahead a little bit, with the indulgence of the Chair.

Section 3(2) is exactly opposite to what.... The corporation is not an agent of the government, yet subsection (2) says: "The share in the corporation must be issued to and registered in the name of the Minister of Finance and Corporate Relations and must be held by that minister on behalf of the government." The shares of the corporation are all registered on behalf of the government, so I can't quite understand how the corporation is not an agent of the government. It doesn't make sense.

Hon. G. Clark: Sorry. We did canvass this earlier, and the member wasn't here, but....

Interjection.

Hon. G. Clark: Oh, I'm sorry. I thought we did.

The share, which refers to

section 3.... I hope we'll get through that quicker if I answer it now, Mr. Chair. It's true that the Minister of Finance owns the share; it's a non-voting share, and the board of directors is two-thirds from the region and one-third from the province. That makes it quite unique and distinct and not a government corporation, because the shares are not exercisable in what would be a Crown corporation sense. That's why it's a corporation with share capital. It's a non-voting share.

D. Mitchell: I would like to ask a question on this. I know we've been spending a lot of time going through this bill, and I've just been passed a note from outside this chamber, saying that the estimates of the Ministry of Small Business, Tourism and Culture that are ongoing in Committee A are in danger of being passed because some of the less competent members of this assembly are possibly going to let them pass. So I want to go over there and participate and ask a few questions. But I have one brief question on this section.

Section 2 establishes the corporation. The minister has told us very clearly it's a unique corporation. We're not really sure what to call it, but he said it's not a Crown corporation.

Section 2(5) says: "The corporation is not an agent of the government." Could the minister tell us what legal requirement compelled him to insert this clause into this section? Why is it necessary for the government to state in this bill that the corporation is not an agent of the government? Is it because, even though this is going to be a publicly funded agency, the government does not want to be liable for any of its actions -- it does not want to be liable for any legal recourse or actions that are taken against this trust for any policies, actions, investments, borrowings or debts that it incurs?

Maybe that would help answer this question. There has to be a specific purpose for the bill to specifically declare that the corporation is not an agent of the government.

Hon. G. Clark: This was part of the discussions with the region. This is to give it more local autonomy and to clearly define that this is not a provincial government Crown corporation. It's not an agent of the government; it is a regional trust -- a unique entity being created, with regional control and regional autonomy.

J. Tyabji: So that we don't have to make up reasons to stay on

section 2 while my colleague looks at the Financial Administration Act, could we stand down

section 2(5)? There was an answer from the minister specifically on the Financial Administration Act. We're doing a little research. The alternative is that I do a bit of a song and dance, and delay it.

The Chair: I appreciate the member's candour. Minister, is it agreeable that we would stand down

section 2? Apparently not agreeable. Let the song begin.

J. Tyabji: I defer to the member for Okanagan West.

C. Serwa: I want to enter into debate on

section 2, with the fact of the corporation established. The reason I want to talk about it -- not so much in the purposes, although I'll probably refer to it at that time -- is that there are two diverse jobs for this corporation to attend to. First are the regional concerns with growth and development and the investment of earned capital. The other aspect of this corporation appears to be the ownership of the expanded hydroelectric facilities.

[4:00]

The reason I enter this at this time is that there is only one corporation contemplated. We have B.C. Hydro, which has the expertise and staff and the ability to assume the ownership. The dividends from that operation could then go to the corporation the minister is striving to establish, which has the regional interests at heart. It seems to be far more efficient to have gone on that pattern and model, with the assurance and guarantee that the dividends would accrue to the regions, and that the corporation could do its job more ably with respect to care and consideration.

But all that we appear to be doing in the establishment of this one corporation is involving redundancy and duplication, and expertise that is already available through B.C. Hydro.

I know there is some concern in the Kootenays with B.C. Hydro. That was evident when West Kootenay Power and Light was taken over by American ownership and the thought of B.C. Hydro purchasing West Kootenay Power and Light was rejected by the residents of the Kootenay area.

Hon. G. Clark: B.C. Hydro bears a legacy in that region which is not particularly popular. Whether one agrees with that or not -- or the debate, etc. -- it was the agent of the government which wrought this change on the region, which has given rise to this resentment and concern. One of the reasons for doing this is to bring some justice and remedy to that historical grievance. I agree with the member. B.C. Hydro is a logical agent, if you will, to construct, manage and assist the trust. I might advise members that Keenleyside will be contracted back to B.C.

Hydro to manage, because Keenleyside has been a Hydro project, and they've done years of work. The member might know that a lot of the work was done before, and it's really shelf-ready.

Waneta and Brilliant capacity projects are expansion projects owned by a new corporation called Columbia Power,

[ Page 13472 ]

which has no real employees other than employees of my ministry. It was formed to hold those assets, because we purchased them from Cominco in return for Cominco rebuilding the smelter.

So it's envisaged at this time, at least with those projects, that Columbia Power will be the government agency that joint-ventures with the trust. Then that gives the trust the capacity to use B.C. Hydro, should they choose to do so, for Waneta and Brilliant expansions, or to go to the private sector.

There are many large corporations around the world that have expertise in this kind of area. Maybe I'm being overly sensitive, but I think the trust might want the option of going to the private sector to build those expansion projects, once they have the operational expertise of the Keenleyside project. I guess that in this chamber I'll be candid and say that I think it makes sense to contract back to B.C. Hydro to build them and to build up some expertise in managing those facilities and in working out a coordination agreement with Hydro, which would be required in any event, and probably with West Kootenay, in terms of managing these assets.

But at this point, I think the historic animosity toward B.C. Hydro is significant. I think the idea of the trust being allowed to pursue a joint venture down the road, perhaps with a different company, is one that we leave open to future discussions and negotiations. So that's the genesis of it.

My sense is that the Keenleyside project will be a bit of a test case to see if Hydro will be managing it, contracted back. They'll be running it, and they'll be working intimately with the trust and with the people of the region. After that, I suspect it will be logical for them to proceed with the other ones. But having a bit of a market test on that is not a bad idea, and I think giving the region some influence over that is a good idea. So that's how I see it unfolding.

G. Wilson: I wonder if the minister might point me to the

section of the Financial Administration Act that he says permits this corporation not to act as an agent of government, which it does. It's very clear -- and the Financial Administration Act is extremely explicit -- that if the government has 50 percent or more of the shares, if it's in owned shares, this is a government corporation. If the shares are to be held 100 percent by the Minister of Finance, which it says under

section 3, this is a Crown corporation. If there is a provision for underwriting the financing and for guarantees to be put in place, this is a Crown corporation, according to the Financial Administration Act as I'm reading it right now. If I'm wrong, then maybe the minister could explain where those sections are.

Hon. G. Clark:

Section 14(2) says: "The Financial Administration Act applies to the corporation as if the corporation were a government corporation."

G. Wilson: If

section 14(2) of this act talks about that in terms of borrowing and the borrowing powers, then I would ask the minister why and under what legal advice. Again, I would like to know why it is that 2(5) is even warranted. In terms of its borrowing, if it acts as a Crown corporation, if it is secured in terms of its financing like a Crown corporation, if the Minister of Finance holds 100 percent of its share equity as per a Crown corporation and if all the other matters of the Financial Administration Act apply like a Crown corporation, then why specifically does

section 2(5) say that it is not an agent of the Crown? What is it that we're putting in there? What is the reason for that to be there?

Hon. G. Clark: Really, part of the discussions leading up to this bill was such that we wanted to give every assurance to the region that this would not be bureaucrats or politicians in Victoria telling the region what would be done. So it's to give comfort to the region that this is not a Crown corporation. It's a different entity, a unique entity, which gives regional control.

But for the purposes of making sure that these investments take place, if we choose to do so, we can exercise the powers and prerogatives of the Financial Administration Act.

G. Wilson: I don't see any consequential amendments that would alter what's in the Financial Administration Act. I haven't heard any assurances from the minister that the statement of this not being an agent of the government, given that all the other conditions that apply to this company are conditions that would apply to a Crown corporation, would even stand the legal test under the Financial Administration Act.

How is it that this government can create a brand-new entity, with the provision to borrow up to $500 million to go ahead in terms of construction of this and in which the government is putting in place a full guarantee that impacts on every taxpayer in the province, and yet say that it isn't an agent of the Crown, when the Financial Administration Act is specific with respect to what the government must have in terms of the provision of those guarantees? I've not heard how this is, in fact, a legal entity. What is it? If it isn't a Crown corporation, exactly what is it?

It certainly isn't a private corporation; it's a creation of government. If it isn't a Crown corporation and it isn't a private corporation and its board of directors are all politicians, it's a pretty suspicious animal to me.

I would again like to reiterate what my colleague from Okanagan East said. I think the minister should permit this

section to stand down until we can get some advice on it. The minister is asking why. The reason is that, if one looks at the act that regulates the borrowing and spending powers of this new corporation.... It's the Financial Administration Act, by the minister's own admission. As I read this act.... I could well be wrong; I'm not a lawyer -- which some people say is to my credit -- but it seems to me, in reading this Financial Administration Act, that there is no provision for the guarantees that this government has given assurances of in an accord that's set up between the people of the Kootenays.

Either the government has pulled the wool over the eyes of the people of the Kootenays and they've entered into an agreement that they know full well they don't have to fulfil, or this is a lot of smoke and mirrors, and they've created a Crown corporation that's going to do a deal with B.C. Hydro and West Kootenay Power and Light to build a few more dams and pretend that the people of the Kootenays somehow had some say in it. Which is it? It's one of the two.

Hon. G. Clark: I don't understand. Normally I'm prepared to stand down for further explanation, but I think we've canvassed this. The explanation is clear. The Financial Administration Act does give the power to government to guarantee or to borrow money; that's what the whole act is about. For the purposes of this act, in

section 14 it is deemed to apply to this corporation, even though it's not a Crown corporation. The member is correct: it's not a private corporation and it's

[ Page 13473 ]

not a Crown corporation; it's a unique entity which we have worked very hard with the community to develop.

We didn't want a Crown corporation of which the government of British Columbia in Victoria could dismiss the board of directors; we wanted to have an entity which had, by statute, control by the region. We also recognized, certainly with the big projects and the big undertakings we're prepared to commit to, that it required the resources of the provincial government. So we've allowed it to access those resources through the Financial Administration Act. I might remind members that the Financial Administration Act is extremely strict.

Not to belabour this section, but there's a whole

section under "Financial administration" that says that the accounting system must have satisfied the Minister of Finance; that whenever required by the Minister of Employment and Investment, they must submit detailed accounts of its revenues and expenditures to the minister; and that all books and other financial records must at all times be open to the province. There's a whole openness section.

So it is a hybrid. We're not trying to hide anything here; it's completely clear. I've been very straightforward on this. The member is not familiar with the Financial Administration Act. That's nothing this committee can deal with; that's up to the member. It has all the powers of the Financial Administration Act. If it's deemed so, we can apply it to this corporate entity for the purposes of facilitating the investments the province of B.C. has committed to with the region.

J. Tyabji: I think the minister is missing the point. What's at issue is not whether or not the members are familiar with the act but which part of the Financial Administration Act would allow the act before us, specifically

section 2(5), to have a clause that says that the corporation is not an agent of the government, when it's governed under the Financial Administration Act, which has some very specific provisions. My question to the minister is: did the minister or his staff have a legal opinion which said that

section 2(5) was something consistent with the Financial Administration Act?

Hon. G. Clark: Legislative counsel and the Attorney General ministry draft the detailed provisions of the legislation, and it is a constant, iterative process. After discussing with them our commitments to the region and how they would be transformed into legal text, this is their best effort to do that. It's something we've shared widely with the community and elsewhere. I am advised -- and people take comfort in the fact -- that this is not a Crown corporation controlled at the end of the day by Victoria. There are sufficient safeguards so that Victoria can intervene. There is openness.

We have some influence, but it is not a Crown corporation from Victoria; it's a regional corporation, and a regional trust, with control and power in the region.

[H. Giesbrecht in the chair.]

J. Tyabji: It's quite clear that Victoria is extremely involved in this, whether the minister wants to admit it or not, based on the memorandum of understanding. Having said that, why wouldn't the minister have chosen to leave out

section 2(5), given that in

section 5 of the bill the way that the board of directors is constituted is laid out very specifically? Wouldn't that achieve the same thing? If this continued to be an agent of government, which for all intents and purposes it is, and the

section with the directors remained as it was, the minister would have the same effect. The region would still be appointing the board of directors, but we would at least have a

section 2 that was consistent with the Financial Administration Act.

If the minister is wondering why we're belabouring this point, when we were talking about this specific

section earlier, the minister himself admitted that there are negotiations underway with Powerex and West Kootenay Power for purchasing the power, and that there are all kinds of independent negotiations going on. I am assuming that the negotiations he was referring to are occurring through B.C. Hydro; or perhaps they're occurring through this minister, who was setting up the memorandum of understanding. I'm raising that because that was part of the minister's response to

section 2(5) earlier in the debate. We're going after this to find out what the purpose of

section 2(5) could possibly be, given that

section 5 deals with the question of regional representation.

Section 2(5) does not need to be in there. If there's some other reason for it to be there, we'd like to know, and then we can move on.

[4:15]

Hon. G. Clark: I take advice from legislative counsel on the question of what needs to be in or not in. My understanding is that this was required to be in there if we wanted to give the security of the region.... It does seem a bit.... If we wanted to make it a Crown corporation, it would be a challenge to make it a Crown corporation and then give the control entirely to the region. It's not a Crown corporation. It does give the benefits of a Crown corporation for the purposes of the Financial Administration Act -- they're not insignificant; we acknowledge that -- but that's to make these large projects proceed.

I want to tell the committee that I didn't personally write these words; I didn't add this particular

section in there. We have an army of very well-qualified lawyers, legal counsel, who advise us on how to effect our political commitments, and that's why this is here. Frankly, with the greatest of respect to the members opposite, I think I'll defer to the Attorney General's legislative counsel for guidance on these questions as opposed to the members of the Alliance Party.

G. Wilson: We could probably move beyond this point if the minister will give us a commitment today that he will provide -- at least for the members of the Alliance Party, if nobody else is interested -- some written legal opinion from the legislative counsel who put that in as to how this is not a Crown corporation and how it is managed under the Financial Administration Act. As I read this,

section 2(5) has absolutely no weight. This is a Crown corporation. It looks like one, it acts like one, it's financed like one and its shares are held like one -- it is one. The minister might want to tell the people of the Kootenays it isn't one because he may have made a commitment to them that it won't be, but in effect it is one. That's how I read it, and if I'm wrong we'll hear that from the legal counsel. Could the minister perhaps tell us, given that this isn't an agent of the government -- and given that the taxpayers are financing it, however -- who owns any assets that are created through it?

Hon. G. Clark: The trust owns the assets.

G. Wilson: We can look at this in a bit more detail when we get down to disposing of assets and how that's going to

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work -- which I notice is actually not covered in the bill -- and with respect to revenues and the share of revenue and how that's broken out between the two partners. If the trust owns the asset, how is that going to be registered within the province with respect to the construction of the new projects that are going to be put in place? To what extent does the Crown have authority over those assets with respect to their disbursement?

Hon. G. Clark: We'll get to it later.

I don't know if this off the topic or not, but let's be clear. In terms of the three power assets we've been talking about, the trust will own 50 percent of those assets and the other 50 percent will be owned by the government of British Columbia. That's always been our discussion of that question. It's a billion dollars' worth of project; it will be half equity and, of that, half will be the trust and half will be from the government of B.C. The piece that is the trust's is the trust's, and income is shared on the basis of the ownership of it.

So they would receive half the income as well as the province receiving half the income, whether that's B.C. Hydro or Columbia Power or the government of B.C.

We've all been upfront about this. I don't know if that's news to the members; it's not news to the people of the Kootenays. We have now held 12 open houses on all of this, and we've got reports back; we're having intensive dialogue and discussion. All of these details are matters of public domain.

C. Serwa: I'm tempted to make a quorum call, with very little of the official opposition present in this debate. But I'll let it go, even though there is not a quorum present in the House.

On this

section it appears that the explanation the minister is trying to give us is one of deception, or an illusion. First of all, according to the Financial Administration Act, this has to be a Crown corporation. But in order to provide the comfort.... Not only is B.C. Hydro not necessarily in the good books of the people in the East and West Kootenays; neither are governments, traditionally. There is that feeling in the Kootenays that the Rocky Mountains...that many of them would have liked to have been part of Alberta, and most of their commerce is in effect there.

But I think that's the reason for the explanation and the reason for the statement -- and the minister can correct me if I am wrong -- where we are trying to convince the people in the East and West Kootenays that it is in fact their corporation. The reality under the Financial Administration Act is that government does not have the latitude or the licence to enable that concept to be fulfilled. The fact is that the government can pull the strings at any time. That's obvious from the minister's statements that agreements are presently being negotiated and have been concluded with respect to the export sale. I think that's the explanation.

W. Hurd: I have one question on

section 2. It relates to the power and capacity of the corporation to act as a natural person. When you look at the basin agreement, some $1 billion of debt incurred, of which half will be guaranteed by the province for the trust. Can the minister clarify whether, with the passage of this act, the loan guarantee provisions that are in the agreement automatically apply to the new corporation? Will they have any ability to decide they don't want the province's loan guarantee if, for example, they don't want to incur another $500 million in debt?

That leads me to another question. Where did the $1 billion valuation come from for the three projects? If I were a member of this new board of directors and was going to incur a share of the $1 billion debt, I would certainly want to be apprised of the rationale the government had used to come up with the valuation of these assets.

Hon. G. Clark: B.C. Hydro, KPMG, RBC Dominion Securities and Richardson Greenshields were all involved in the evaluation of the assets. Just to clarify, half of it will be equity and the other half will be debt-financed.

Certainly after Keenleyside and, I think, with respect to Waneta and Brilliant, if the regional trust sells the power by virtue of a long-term energy purchase agreement or something like that, at attractive rates, they won't need the province's guarantee. They don't have to avail themselves of the province's guarantee. They could simply borrow the money on the market on the strength of that contract. The province's guarantee tends to allow you to borrow money at a lower rate, so they'll probably avail themselves of it. But I certainly don't see any problem with them doing that if they choose to.

W. Hurd: This is again getting us into issues related to the memorandum of understanding. Clearly, when we look at that memorandum, it says the province will also pay $45 million to the trust. It will be responsible for the cost of guaranteeing the trust's half of any borrowing for the power projects. Clearly, there's an implication there that as soon as this bill becomes law there will be a series of empowerments or entitlements -- if one could use that term -- by both the trust and the province.

So, under

section 2, how can the corporation have the power and capacity of any natural person, when in fact there's a series of encumbrances under the downstream benefits agreement which will take place simultaneously with the passage of this bill into law? This corporation will not have the ability to change any aspect of this Columbia Basin agreement, one would have to assume. They wouldn't have the ability to decide, for example, that while.... "Maybe we want to go back to the province and renegotiate whether we want to be guaranteeing loans or whether we want the province to guarantee those loans on our behalf -- meaning that we will have to incur the cost should the market go down."

A troubling aspect to this whole debate is the fact that we have this agreement that's been signed, for which the minister has pledged to get a legal opinion on whether it has the force of contractual law, and then we have the bill we're dealing with, which purports to set up a corporation with the freedom and the latitude to do anything on behalf of the people in the Kootenays. So I guess my question still stands.

Will the minister assure this committee that the people of the Kootenays who engaged in these public debates were given a thorough and honest accounting of these $1 billion in assets they were acquiring? Were they given the long-term implications of the borrowing and the debt they were incurring? This is the most troubling thing to some members of the opposition. I'm not convinced that the people of the Kootenays who endorsed this know what those assets are worth. If they do know, they certainly haven't received the appropriate level of communication.

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We can safely say, under

section 2 of the bill, that the corporation does have the power and capacity of a natural person only as it applies to the limitations or the encumbrances of the Columbia Basin agreement. It's important to put that on the record, because we are not creating a corporation that -- in my view, anyway -- has the ability to change anything in the memorandum of understanding.

Hon. G. Clark: They can turn it down.

W. Hurd: The minister says they can turn it down. But how? They're legally encumbered to $1 billion in borrowings.

Hon. G. Clark: They don't have to.

W. Hurd: The minister says they don't have to. I'm really baffled by that comment, because I believe that as soon as this act becomes law, the memorandum of understanding -- which was signed by Mr. Smienk, on behalf of Columbia River Treaty Committee Inc., and by the Premier of British Columbia -- becomes a legally binding contract on the corporation. They would have no ability to renegotiate, should they see fit, if the value of the assets had been improperly valuated by B.C. Hydro. The minister assures us that there's $1 billion of equity there.

In fact, with respect to the Waneta and Brilliant dams, there are no assets; it's just the power generation capacity that the trust is acquiring. It's an issue that I'm sure we'll get into in subsequent sections of the bill, but I am somewhat troubled that the memorandum of understanding was not clearly encapsuled within the act to give at least the people of t