2011 Legislative Session: Fourth Session, 39th 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)

Monday, March 26, 2012

Afternoon Sitting

Volume 33, Number

ISSN 0709-1281 (Print)

ISSN 1499-2175 (Online)

CONTENTS

Page

Routine Business

Introductions by Members

Tributes

Merritt Centennials hockey playoffs win

H. Lali

Introductions by Members

Statements

(Standing Order 25B)

Cassidy Megan and Purple Day

R. Cantelon

Port of Prince Rupert

G. Coons

Avalanche awareness and North Shore Rescue

J. Thornthwaite

Epilepsy awareness

G. Gentner

Bear safety programs

J. Slater

Teck initiative for reduction of nutritional zinc deficiency

K. Conroy

Oral Questions

Changes to federal legislation on fish habitat protection

A. Dix

Hon. T. Lake

R. Fleming

Impact of power project on Ashlu Creek fish stocks

M. Sather

Hon. T. Lake

Release of media correspondence with government to Eminata Group

M. Mungall

Hon. N. Yamamoto

J. Horgan

S. Simpson

Jumbo Glacier resort proposal

N. Macdonald

Hon. S. Thomson

Catalyst mill operations and workers

N. Simons

Hon. P. Bell

C. Trevena

S. Fraser

Personal Statement

Resignation from caucus

J. van Dongen

Orders of the Day

Introduction and

First Reading of Bills

Bill 27 — Supply Act (N o . 1), 2012

Hon. K. Falcon

Second Reading of Bills

Bill 27 — Supply Act (N o . 1), 2012

Hon. K. Falcon

B. Ralston

Committee of the Whole House

Bill 27 — Supply Act (N o . 1), 2012

B. Ralston

Hon. K. Falcon

Report and

Third Reading of Bills

Bill 27 — Supply Act (N o . 1), 2012

Committee of the Whole House

Bill 20 — Auditor General for Local Government Act

Hon. I. Chong

H. Lali

B. Ralston

K. Corrigan

V. Huntington

Proceedings in the Douglas Fir Room

Committee of Supply

Estimates: Ministry of Aboriginal Relations and Reconciliation (continued)

Hon. M. Polak

S. Fraser

B. Simpson

J. Kwan

Estimates: Ministry of Agriculture

Hon. D. McRae

L. Popham

[ Page 10329 ]

MONDAY, MARCH 26, 2012

The House met at 1:35 p.m.

[Mr. Speaker in the chair.]

Routine Business

Introductions by Members

J. Horgan: Joining us in the gallery today is someone that was renamed by my colleague from Kootenay West as St. Ellie. That would be my spouse, Ellie Horgan, the only woman I've ever met that is able to overlook all of my failings day after day after day. Joining her from the great state of Alberta are her brother, Rick Mast, and his able and charming wife, also able to overlook shortcomings, Aileen Mast.

Would the House please make my in-laws and my lovely spouse very welcome.

R. Cantelon: My better half — certainly, by far my better half — is joining me in the gallery today. It's a very special day for us. I've loved her and she's been with me now for 18 years. It's our anniversary today, so please give her a special welcome.

V. Huntington: It gives me great pleasure to introduce two long lost relatives of mine, who I've only discovered today. Andrew and Robert Orr are in the gallery to see this wonderful question period. I hope the House joins me in making them very welcome.

G. Gentner: It's an honour for me to introduce family members in the House as well — my mother, who is a constituent of the member for Delta South, Doreen Gentner, a renowned drummer. Now she is taking up the ukulele. She is a great artist. With her is my sister Karen, who got all the good looks. She's a constituent from Chilliwack-Hope. She is a public nurse, and she is also a dairy farmer.

Beside her is her daughter, Teresa, a student of the Fraser Valley University. She is also a senator of the university. It's hard for a New Democrat to admit that he has a relative who is a senator, but she was elected.

Would the House please make them welcome.

R. Hawes: Today is Purple Day, which is a day to remember epilepsy, to think about epilepsy.

Today in the gallery are some people from the Fraser Valley, from my riding. First, Laura Yake is with the Fraser Valley Epilepsy Society. Belinda Robertson is from Chilliwack who, on behalf of our member from Chilliwack, I'd like to also mention. Lastly, Ted and Janis Downey are the parents of my son-in-law, who I actually got a chance to introduce earlier today.

I know there are other members that the Minister of Health is going to introduce shortly, but for them, please may the House make them welcome.

E. Foster: In the House today we have several guests visiting from around the world, actually. My wife Janice is here, always supporting me. Janice and I, as I have mentioned in the House a few times before, have taken in international students for many years.

My good friend and now the mayor of Lumby — he took my job there — His Worship Kevin Acton is with us. His soon-to-be wife, Jen James, is with us, and their daughter Phoebe. Visiting from Mexico we have Liz Degraro; from Japan, Aska Taganashi; from Bolivia, Delsa Lanos; and from Korea, Min Hoy Kim.

I would like the House to please make them very welcome.

S. Fraser: I know there are some students from the University of Victoria visiting today. I don't know if they're here yet or not, and I actually don't know him to recognize one student, Stephen Frampton. I have spoken him with him on the phone, and he is due here today.

If you are here, Stephen…. I'm very impressed with his knowledge and interest in politics, and I'd like to make him and the other students from UVic feel very, very welcome.

Hon. T. Lake: Today in the precinct we have a number of folks from an umbrella organization called Organizing for Change that hosted us at lunch today. We thank them for an opportunity to discuss environmental issues with them. Leading the group is Lisa Matthaus.

[1340]

We also had John Bergenske and Casey Brennan from Wildsight; Tom Hackney of the B.C. Sustainable Energy Association; Sarah Cox from the Sierra Club of B.C.; Matt Horne from the Pembina Institute; Josha MacNab, also from Pembina; Matt Takach from the Dogwood Initiative; Christianne Wilhelmson and Ruby Berry from the Georgia Strait Alliance; Nicola Hill from the Canadian Parks and Wilderness Society; Jessica Clogg and Andrew Gage from West Coast Environmental Law; Joe Scott from Conservation Northwest, Pierre Iachetti from ForestEthics; Stephanie Goodwin from Greenpeace; and Sean Nixon from Ecojustice.

Thank you very much to the group for their discussion today, and I would ask the House to please make them welcome.

Tributes

MERRITT CENTENNIALS

HOCKEY PLAYOFFS WIN

H. Lali: The Merritt Centennials, the Junior A hockey team out of Merritt, is actually the longest continu-

[ Page 10330 ]

ously running B.C. Hockey League franchise in British Columbia. I want to say, and I would ask in particular my two colleagues from Prince George to join me in congratulating the Merritt Centennials, as they swept the Prince George Spruce Kings four games to zip to go on to the next round of the playoffs in the BCHL. Would the House please congratulate the Merritt Centennials.

Introductions by Members

Hon. M. de Jong: In addition to Ted, Janis, Laura and Belinda, who are from the Fraser Valley, taking

part in Purple Day for epilepsy awareness, from Victoria and the south Island are a group of individuals who dedicate themselves on a daily basis to highlighting the challenges people who suffer from epilepsy face and challenge all of us to assist in research and finding an elusive cure.

Katriona Johnson; Vanessa Isherwood; Roxanne Moore; Lise Anthony — and Lise is here with India, her beautiful Lab assistance dog; Terry Beaton; Lindsay Beal; and Nathan Lampbert are all from the south Island, all in the gallery. All, I know, will feel welcome in these precincts.

R. Fleming: I want to join my colleague from Alberni–Pacific Rim, who jumped me in the queue to introduce 24 students, in fact, from the UVic NDP Club here today. There are a few of them that I know especially well: Raizy Marmorstein, Leah Ritch, Dylan Sherlock and Darcy Lindberg. They will be taking in question period and then meeting with the Leader of the Official Opposition and several caucus MLAs following question period.

Then something of a tradition now for visiting university groups, they will get a tour by the member for Powell River–Sunshine Coast of the buildings, of which the historical accuracy of the content of his tour cannot be verified at all. Nevertheless, would the House please make all of these guests welcome here today.

Statements

(Standing Order 25B)

CASSIDY MEGAN AND PURPLE DAY

R. Cantelon: Every year on March 26 people across the world wear purple in support of those living with epilepsy. Epilepsy is a brain disease that is characterized by recurrent seizures, and it affects approximately one in 100 people. There are about 300,000 Canadians and 40,000 British Columbians living with epilepsy.

Cassidy Megan of Nova Scotia is one of them. She's also the founder of Purple Day for epilepsy awareness. In 2008 nine-year-old Cassidy decided she wanted to help raise awareness about her disease. She wanted to dispel any myths about the disease and help connect people living with epilepsy to support networks, treatments and services.

She approached her principal with the idea for Purple Day. Cassidy chose the colour purple because the international colour for epilepsy is lavender, and lavender is a flower often associated with solitude. But Cassidy wanted people with epilepsy across the world to know that they are not the alone and that we support them.

Taking

part in Purple Day can be as simple as wearing a purple T-shirt, a purple tie — I see much purple here today, which is wonderful — or taking time to learn about epilepsy and the people that it affects.

Our healthy communities depend on everyone supporting each other, and I hope all members will join me in celebrating Purple Day this year.

[1345]

PORT OF PRINCE RUPERT

G. Coons: Safest, deepest, closest to Asia. To what am I referring, you ask? My hometown, specifically the Port of Prince Rupert. We are blessed to have one of the safest harbours in North America with a proud track record of securely moving ships to and from the Pacific Ocean — one of the deepest ports, making it a natural choice as a gateway for the dramatic growth in trade with Asia. As every member in this House knows, we are the closest port to Asia by up to three days over other ports.

In the '70s the first deep-sea facility, Fairview Terminal, was opened as a break-bulk facility. In the '80s Ridley Island's coal and grain terminals were developed. In 2007 the port developed a whole new industry, containers shipped out of the Fairview Container Terminal. The growth is so impressive that plans to double capacity have started.

The impact on B.C.'s prosperity is clear. Over 2,000 people from Prince Rupert and other northern communities work at transporting cargo through the port. The direct economic impact last year was over $120 million in wages and $270 million in GDP, and new planned expansions will unleash billions more in forestry, mining and other B.C. resource investment — all this while maintaining their commitment to sustainability and engaging with First Nations and communities to create a new standard in viewing their development and operations through a long-term lens.

Mr. Speaker, 40 years ago Prince Rupert was designated a national harbour, and I'm excited about the next 40 years. I'm proud of my city's contribution to our nation's

[ Page 10331 ]

well-being. It is truly an honour to call Prince Rupert home and represent this amazing community.

AVALANCHE AWARENESS AND

NORTH SHORE RESCUE

J. Thornthwaite: British Columbians are truly blessed to live in a region with extraordinary natural beauty. I, like many British Columbians, enjoy a variety of outdoor recreational activities in B.C.'s mountains. I am particularly fond of Mount Seymour. However, these activities can come with a real danger of avalanches. This winter has been filled with many tragic stories of avalanches across our province and has regrettably resulted in numerous fatalities. There have been close calls and injuries as well.

This past Saturday, for instance, four hikers needed rescue on Grouse Mountain. On the North Shore we are privileged to have North Shore Rescue to provide assistance to people in distress. North Shore Rescue, a team of approximately 40 dedicated volunteers, conducts roughly 90 search and rescue operations on the North Shore mountains each year.

In addition, this remarkable team engages with the public and civil authorities by sharing their knowledge and experience. I regularly speak with Tim Jones of North Shore Rescue. He reinforces just how busy this season has been, conducting helicopter rescues on the north shore slope.

I was a guest on a Talon helicopter, actually, with North Shore Rescue in 2009, and that was an exciting experience. As this winter has demonstrated to us, we all need to be avalanche aware while we enjoy our beautiful outdoors. To learn more about how to safely enjoy our mountains, I urge everyone to visit websites such as avalanche.ca or northshorerescue.com. Additionally, I encourage all British Columbians to consider supporting their local search and rescue organization.

EPILEPSY AWARENESS

G. Gentner: I remember the day it happened. We were just kids then, just hanging around, about four or five of us standing at the end of my driveway. I think a cigarette was being passed around when Rob took it, and he fell backwards. His eyes rolled to the back of his head, his head struck the jagged rocks in the driveway, and his body twitched and shook. We really didn't know what to do. We didn't take him seriously, because Rob was always the prankster. We thought it was another one of his jokes. We knew something was wrong, but before we could do anything, Rob got himself up, dusted himself off and asked that we wouldn't say anything to anyone, including his parents.

But I took it upon myself to talk to his parents anyway. His mother — I remember it well — while leaning against the kitchen counter, said: "Oh, not my Rob." His father, Sid, with a T-shirt and suspenders, sat on a chair at the table and buried his head in his hands. He looked at me and said thank you, and took me to the front door.

I or none of my friends — we didn't see Rob much anymore. It didn't have to be that way, because epilepsy can be treated. Today is Purple Day, a day dedicated to increasing awareness about epilepsy, a disorder of the brain function that takes the form of recurring seizures. It is more common than you may think.

[1350]

It's time to understand and dispel the myths and inform those with seizures that they are not alone. There is reluctance to talk about it, particularly when I grew up. The Epilepsy Foundation provides support, and it's time to reduce the stigma and create a more welcoming and inclusive society.

I heard recently that Rob had died about 15 years ago, and no one knows of what or how. But on behalf of my chums and myself, I hope that you forgave us, Rob. We were just kids then, and we really didn't understand.

BEAR SAFETY PROGRAMS

J. Slater: The signs of spring are popping up all around us. The days are longer. The tulips are starting to come up. The campgrounds are open, and Yogi and Boo-Boo are waking up.

Every year you hear of the troubles with the bears in campgrounds along streams, rivers and more now in our neighbourhoods. In order to keep our families and properties safe, the British Columbia Conservation Foundation has created a guide, the Bear Safety at Home pamphlet, that is distributed throughout the province to educate homeowners on how to keep bears out of our neighbourhoods, how to keep families safe and prevent the unnecessary destruction of bears.

Brenda Lacroix, who is the executive director of the Christina Lake Stewardship Society, and her team of volunteers have been conducting a very active Bear Aware program over the years throughout the community. In 2011 they distributed 1,051 Bear Aware packages, delivered eight press releases and spent 762 hours educating the residents, businesses and visitors on how to be bear-proof.

Feeding or allowing bears to access human food sources leads to bears being killed. There is enough food for bears in the wild.

At the annual general meeting of the Christina Lake Stewardship Society held last week, Brenda Lacroix and the society received an appreciation certificate from the conservation officer services of the Boundary-Kootenay for their work and dedication in educating the community and visitors on Bear Aware. I, too, would like to send my congratulations to Brenda and the society for doing a great job in keeping Christina Lake safe and in keep-

[ Page 10332 ]

ing our bears alive.

TECK INITIATIVE FOR REDUCTION OF

NUTRITIONAL ZINC DEFICIENCY

K. Conroy: Here are some concerning facts, Mr. Speaker. The number of people worldwide who are not getting enough zinc through their diet, two billion; the number of people who die annually from zinc deficiency and related disorders, 800,000; and the number of children who die each year from zinc deficiency, 450,000.

As a significant producer of zinc, when Teck first learned of the devastating impact of zinc deficiency, it recognized the role that it could play in finding solutions to this global issue. In fact, the amount of zinc required annually for zinc supplements to treat all cases of zinc deficiency is less than 2 percent of Teck's production and less than 0.1 percent of global zinc production.

The challenge the world faces is not producing more zinc; it is getting zinc into the diets of people suffering from zinc deficiency. This requires education, better distribution networks and greater awareness of the dangers of zinc deficiency.

Teck's zinc and health initiative is aimed at helping address these issues by raising awareness about zinc deficiency with the goal of helping to save children's lives. Teck has set up zinc and health captains at all of their operations to help spread the word. In Trail, Capt. Catherine Adair has ensured each of her over 1,500 colleagues on site have learned about the zinc and health awareness campaign.

Teck has also joined with the highly successful We Days in Vancouver, Toronto and Montreal, where over 40,000 youth, educators and special guests plus a large on-line presence learned about the global issues of zinc deficiency. They were also encouraged to bring household batteries for recycling. A standard double-A battery has enough zinc inside it to save the lives of six children. Thousands of batteries were collected, and all of them were recycled at the Trail operations, reducing landfill waste and allowing zinc in the batteries to be recovered and reused.

It's a wonderful initiative not only for our environment but ultimately for saving children's lives.

Oral Questions

CHANGES TO FEDERAL LEGISLATION

ON FISH HABITAT PROTECTION

A. Dix: Last week it was revealed that the federal government intends to make significant changes to the federal Fisheries Act. In particular, there's a proposal to delete protection for fish habitat in

section 34(1) of the act.

[1355]

A former federal Fisheries Minister, a Conservative, John Fraser, has said that to take habitat out of the Fisheries Act is a serious error because you can't save fish if you don't save habitat.

I want to ask the Minister of Environment if he agrees with Mr. Fraser. What consultations have taken place between the province and the federal government on these proposed changes?

Hon. T. Lake: Thank you very much to the Leader of the Opposition for the question. The federal Minister of the Environment and I have a very good working relationship, and we have been discussing some of the changes that are contemplated federally.

I would say to the member opposite that this government is committed to protecting fish habitat, to making sure that environmental sustainability is at the forefront of all the policies that we do here in British Columbia. We will continue to make sure that that is the policy going into the future.

Mr. Speaker: The Leader of the Opposition has a supplemental.

A. Dix: If the minister in fact believes in protecting fish habitat in the Fisheries Act, then surely he would agree that taking it out would be a bad thing. And 625 scientists have said so in a letter they've written to the Prime Minister.

If the minister has had discussions, has he communicated the strong and, I think, passionate view of all British Columbians of all political stripes in favour of protecting the fishery? Has he communicated that view, and does he oppose taking specific protection for fish habitat out of the Fisheries Act?

Hon. T. Lake: Well, as I mentioned, it's critical to ensure that we have environmental sustainability in all decision-making here in British Columbia. These changes to the Fisheries Act are very recent, as the member has suggested. We will have opportunities to discuss, with both the federal Environment Minister and the minister responsible for fisheries, those changes and how they impact sustainable environmental commitments here in British Columbia.

I will say again to the member opposite that this government is committed to environmental sustainability, to making sure that we develop our resources in a way that all British Columbians are proud of, and we will continue to do that.

Mr. Speaker: The Leader of the Opposition has a further supplemental.

A. Dix: Well, hon. Speaker, the minister will know that it has been suggested that these changes will be brought in, in two days, connected with the federal budget, which

[ Page 10333 ]

means that the concern is immediate. I think he would agree with that. The government in Ottawa has a majority, and they may intend to push through that legislation rather quickly. Two former Conservative Fisheries Ministers…. Mr. Fraser, of course, says there's "no justifiable excuse" for these changes, and Mr. Tom Siddon called these changes "a very serious error."

If, as the minister suggested, the government is committed to the protection of fish habitat, will he make it clear today and plain today to the federal government that the B.C. government does not support changes that weaken

section 34(1) of the Fisheries Act?

Hon. T. Lake: Mr. Speaker, on this side of the House we actually like to base our decisions and our discussions on evidence. At this point the changes that the member opposite is suggesting have not been made. We will evaluate any changes that impact the environmental sustainability of this province and have discussions when that evidence is presented, rather than jumping to the answer before we have evidence in front of us. This government will make decisions based on evidence, and that's what we will do in this circumstance.

R. Fleming: The problem with what the Minister of Environment just said about discussions is that nobody has asked the province of British Columbia about these proposed changes. We know there was no testimony by the province to the government's review. B.C. was either not invited or not interested in what has become a sweeping and hugely controversial change to the Fisheries Act.

My question is to the Minister of Environment. Having learned that his federal counterparts plan on completely compromising the requirements to study and review impacts on fish habitat and ecosystems that are part of an environmental assessment process in British Columbia, in Canada now, what is his message to the federal government?

[1400]

Does he agree to go along to get along with his federal counterparts, who seek to turn the clock back four decades, muzzle scientists and ram through changes that strip away the integrity of environmental review in our province, or does he have another view of the matter?

Hon. T. Lake: I rise with some trepidation because it sounds like "The sky is falling. The sky is falling." We will await to see what changes are in store federally in an area in which the federal government has jurisdiction. We will discuss with our federal counterparts any impact that it may have on the environmental sustainability of British Columbia. This government is committed to making decisions and making policies based on evidence rather than speculation. We'll continue to do that.

Mr. Speaker: The member has a supplemental.

R. Fleming: We've just heard from the Minister of Environment that the time to talk about British Columbia's position is after legislation hits the floor of the House of Commons. That's what he said is good enough for him and his government here.

The proposed revisions are out there. They will disable the pillars of environmental protection in Canada and make it almost impossible to ever trigger an environmental assessment in B.C. again by the federal statutes. A former 32-year veteran of DFO, a senior scientist, says that this will put Canada where we were in the pre-1976 era, when there were no laws to protect fish habitat.

So my question, again, to the minister: has the minister contemplated how this will burden his own ministry, the environmental assessment office here in British Columbia — an agency that the Auditor General slammed for failing to monitor completed projects, many with sensitive fish habitat areas? And will he stand here in the House today and call on the federal government to delay any changes to the Canadian Environmental Assessment Act until British Columbia has its chance to make its views?

Hon. T. Lake: It is with great interest that I see the member's new-found enthusiasm for environmental issues, like perhaps CO 2 , that he's just finally realized is a problem in the world today. This side of the House is concerned about environmental sustainability, to make sure that this province is in fact left in a state that our children and grandchildren can be proud that they have the same opportunities for life that we have had. The only way to do that is to protect the environment. I am committed — this ministry is committed; this government is committed — to protecting the environment in British Columbia.

IMPACT OF POWER PROJECT ON

ASHLU CREEK FISH STOCKS

M. Sather: Unfortunately, the sky literally is falling for the fish in Ashlu Creek. Our recent FOI, freedom-of-information, requests have shown a real disturbing pattern of fish kills in the Ashlu at the private power project.

My question is to the Minister of Natural Resource Operations. Can the minister explain what steps this government has taken, in the three years since this project has been in place, to eliminate the killing of fish? And has this government increased monitoring at other projects in light of these revelations?

Hon. T. Lake: In fact, the Ministry of Forests, Lands and Natural Resource Operations, the compliance workers and employees…. We are working with those proponents. They pointed out the difficulties that were identified and ensured there were changes that occurred. Hundreds of thousands, if not millions, of dollars were spent by proponents to ensure that those problems were looked after. Again, we are making sure that there is sustainability, that

[ Page 10334 ]

we develop clean, renewable power in this province in an environmentally sustainable way.

Mr. Speaker: The member has a supplemental.

[1405]

M. Sather: I don't know how the people of British Columbia can trust anything that this minister says. The freedom-of-information material also revealed that there were six species of fish in the Ashlu River, while the proponents, when he filed out the environmental assessment, only identified one species of fish.

Can the minister explain how people in this province are supposed to believe what the Liberals say about the environmental impacts of private power projects when there is such a huge disconnect between fact and fiction rubber-stamped by this government?

Hon. T. Lake: Let me quote from Chief Bill Cranmer from the 'Namgis First Nation. "We the 'Namgis expect our children's children to be fishing and recreating on the Kokish River, as their ancestors have. We would not compromise our cultural or environmental values and ethics for this or any other project."

The fact is, Mr. Speaker, the members opposite are against every clean and renewable project in this province — every single one. We believe that developing our resources in a sustainable way, in a way that allows First Nations economic opportunity, that provides clean, green power to this province is the right thing to do, and that's what we're going to do.

RELEASE OF MEDIA CORRESPONDENCE

WITH GOVERNMENT TO EMINATA GROUP

M. Mungall: The recent resignation of the former Minister of State for Multiculturalism concerning a leaked e-mail to a Liberal Party donor and the events surrounding it have called into question the Liberals' ability to work in the public interest. I know the Minister of Advanced Education would like to put this all behind her, but there are still many, many questions that remain.

On Monday, March 12, the minister told this House that she did not share an e-mail from a Province newspaper reporter with Eminata Group. The question is: did the minister know at that time that her ministerial assistant had leaked a hard-copy printout of the e-mail to the Minister of State, who of course has no responsibility for regulating private post-secondary institutions?

Hon. N. Yamamoto: We thoroughly canvassed this issue the last time we were in the House. My office did nothing wrong. The member for Burnaby-Lougheed has apologized. He did the honourable thing, and he resigned from his position in the cabinet.

Mr. Speaker: The member has a supplemental.

M. Mungall: It's a real shame that the Minister of Advanced Education is refusing to answer further questions on this issue. There are many questions, as I said, so I will continue asking those questions on behalf of the public and the public's interest.

On Wednesday, March 14, I asked what the minister had found on the leaked e-mail, and the minister said: "…there has been no e-mail sent by myself, from my office or ministry staff to the organization that the member opposite is referring to."

My question is: did the minister know at that time that the Minister of State for Multiculturalism had leaked the e-mail? And if she knew, why did she hide that fact from the House?

Hon. N. Yamamoto: We have canvassed this issue. I can repeat for the member opposite exactly what happened, but all the member opposite has to do is to look into Hansard . We canvassed this question. Our office did nothing wrong. I was not aware of any e-mail — until I read an

article in the Province newspaper — that had been shared with my minister's office and another ministry.

J. Horgan: My question is also to the Minister of Advanced Education. We know now that her ministerial assistant took a hard copy of an e-mail to the ministry and gave it to the former Minister of State for Multiculturalism.

Our question is a very simple one. When did the minister know that her ministerial staff had taken confidential information and transmitted it to a third party, which ended up in the hands of someone that she regulates? When did that happen? Be specific.

[1410]

Hon. N. Yamamoto: In fact, I do have my Hansard transcript here. I just don't have it in front of me. Again, I would ask the members opposite to look up Hansard . It's been canvassed in the media as well. I stand by my statements.

Mr. Speaker, the Minister for Multiculturalism has stepped down. He has apologized. He did the honourable thing.

Mr. Speaker: The member has a supplemental.

J. Horgan: Again, to the minister: the minister's staff member, her ministerial assistant, took information — and gave it to another minister — that ended up in the hands of a body that's regulated by that ministry. Surely to goodness, at a minimum, the minister has taken some steps with that staff member. Perhaps she could elucidate the House and advise us what she's doing to try and get

[ Page 10335 ]

control over the regulatory responsibilities of her ministry.

Hon. N. Yamamoto: As I've already mentioned to the members opposite and to the media, there are circumstances and there are times that ministers share information with other ministers. That is not unusual. On this side of the House we work as a team. We expect confidentiality.

I know it's hard for the members opposite to understand that. They haven't been in government for a while. We do this sharing of information with the ministries, and we're expected to do that.

S. Simpson: My question, again, is to the Minister of Advanced Education. Will the minister tell this House whether she inquired of her ministerial assistant as to why he made the decision to provide the e-mail to the Minister of State for Multiculturalism, and will she tell this House what the response was?

Hon. N. Yamamoto: We have canvassed this issue in the House. My statement is in Hansard . My ministerial assistant…. The office has not done anything wrong. The only issue was the sharing of this information with somebody outside of government.

Mr. Speaker: The member has a supplemental.

S. Simpson: The minister is accountable for what goes on in her office, and her performance today says she doesn't know what's going on in her office.

The minister has not told this House when she found out. She has not provided that information. She has not told this House what the explanation for her ministerial assistant choosing to give that e-mail to the Minister of State for Multiculturalism was. Will the minister get up in this House, provide some disclosure and tell us why that happened and why the ministerial assistant did what he did?

Hon. N. Yamamoto: I do have my statement, which I stand by. This is what I said two weeks ago, I believe, in the House.

"I want all members in this House to know exactly what happened. On Monday I became aware of an

article that was written in the Province newspaper. In that

article they indicated that a representative from Eminata was in receipt of a copy of an e-mail that originated from a reporter that had been sent to my Advanced Education communications department.

"The reporter had asked for a response to some questions regarding a private post-secondary institution. An e-mail was sent back to the reporter, with a response to those questions for the article. So just to be clear, that is the e-mail that is in question.

"After finding out about this — and in the newspaper — I did take steps to find out exactly what had happened. So later that day I was advised that a printout of the e-mail was passed along to the office of the Minister of State for Multiculturalism. That was done by my ministerial assistant on February 20, and I was not aware of that, nor did I direct that.

[1415]

"I have since learned that the Minister of State for Multiculturalism passed it on to a representative from Eminata. That was wrong. Yesterday the Minister of State for Multiculturalism acknowledged his error in judgment. He has apologized for that."

That was what was recorded in Hansard . I think the issue has been fully canvassed and answered.

JUMBO GLACIER RESORT PROPOSAL

N. Macdonald: Well, let's see if we can do better with answers than that. Let's go to the minister responsible for the decision on Jumbo. Every measure of public opinion in the Columbia Valley for the past 20 years has made it clear that people who know that project the best have been against it.

I'll just remind the minister of some of the indications of that: 91 percent actually against it in the environmental assessment process; Invermere mayor and council consistently against the project; 79 percent opposed in a referendum; the Ktunaxa First Nation is strongly opposed.

After all the petitions, all the demonstrations, all the letters, the minister has chosen to ignore the residents of the Columbia Valley and instead impose a development. It's no wonder, I suppose, that the minister hid away as far as he could from the Columbia Valley when he made the announcement.

The question I have for the minister is: does the minister seriously think that the people in the Kootenays are going to quietly sit by while he attempts to impose a development in Jumbo Valley?

Hon. S. Thomson: This is a project that has had the most extensive review process, the most extensive consultation process in history — over 20 years, as the member opposite referenced. This is, again, a pattern that seems to be developing — opposing economic development projects that have been through processes, a change in policy. Again, the member referenced 20 years.

I know they don't like to be reminded of the past, but let me read a letter of support from former leader — and former Premier — of the NDP Mike Harcourt to the proponent of this resort. He says: "I hope that you will be able to proceed on this project and that one day we may see this international venture realized." That day is now 20 years through the process, through a legitimate process with environmental assessment. It was time that the decision was made, and we're proud that we've made that decision.

Mr. Speaker: The member has a supplemental.

N. Macdonald: Well, I mean, these are projects that are best understood locally. The minister quotes a former mayor of Vancouver. The fact is that, consistently, people who have been there have understood the projects.

[ Page 10336 ]

If you look at Kootenay communities, if you look at the Ktunaxa, you will consistently have…

Interjections.

Mr. Speaker: Members.

N. Macdonald: …individuals who know these projects well. They have developed resorts in the area. What they are doing is they are looking at this. They understand that if you're going to develop a resort, it is important that it fit in with a long-term plan. This project does not fit in with a long-term plan. Residents from the area, who best understand that, have told this minister that repeatedly.

I have a question for the minister. Is the minister presenting an honest picture to potential investors? Are they being told about the strong local opposition and the First Nations' objections, or are B.C. Liberals again misleading investors?

Hon. S. Thomson: Maybe I'll just correct the member opposite. That quote was not from the former mayor of Vancouver. That quote was from the former leader and the Premier of the province at the time. That is a quote from an official communication from the Office of the Premier.

Let's be clear. This project has been through an environmental assessment process with 195 conditions on it — an environmental assessment approval following the interim agreement that was provided in the 1990s.

[1420]

Again, a master resort approval. The proponent in this case has met every test through the process and complied with all the conditions and all the agreements. The master development agreement ensures that those conditions are met in the master development agreement — again, 20 years. We're pleased to have made the decision. It was time for the decision to be made, and we look forward to the project proceeding.

CATALYST MILL

OPERATIONS AND WORKERS

N. Simons: The livelihoods of hundreds of workers in Crofton, Port Alberni and Powell River are hanging in the balance as Catalyst is in bankruptcy protection. Under the Liberals more than 35,000 jobs have vanished from the forest industry. These coastal communities have depended on forestry for their survival for generations, and this situation could be devastating without the involvement of government.

My question is to the minister responsible. Can he tell us what steps he has taken to help stabilize this situation?

Hon. P. Bell: As the member opposite knows, Catalyst is currently in a CCAA protection process. That involves all different groups coming together to work with Catalyst to try and find an opportunity for that company to come out of protection and be a viable company again. The provincial government is playing a role in those discussions. It's an important one, and we're looking forward to, hopefully, getting a successful outcome in the Catalyst situation.

C. Trevena: This doesn't just impact the workers who still have jobs in the forest sector. Catalyst pensioners across the coast, in Campbell River, Powell River, Alberni and in the south Island have serious worries about what's happening. Catalyst's pension plan is underfunded by as much as $75 million. That means retired workers could lose nearly half of what they expect to get in their retirement earnings.

So I'd like to ask you, Mr. Speaker: does the minister have any assurance for those retirees that they're not going to be the latest victims of this government's failed forestry policy?

Hon. P. Bell: Perhaps the member opposite isn't aware of the process that a company under protection goes through, but that clearly is not an appropriate question to ask while Catalyst is in that process. The process involves a number of different parties coming to the table. If the member opposite is thinking that the sole responsibility for the underfunding of the pension should be borne by the provincial government, I'd suggest she stand up and say that.

S. Fraser: You would hope that the government and the minister would do something. Workers are at stake here. Pensioners are at stake here — their livelihoods. Communities are at stake here. They've done everything right. They've worked hard. They paid into their pension plans, and they believed it would be there when they needed it.

Now, thanks to circumstances entirely beyond their control, they're being let down by this government. This is now the third Forests Minister — the third one in the last six years — to shrug his shoulders and say: "Sorry, there's nothing we can do." Not good enough.

Will the minister finally take some action and ensure that these workers and retirees won't be left behind by this government's failure in the forestry sector?

Hon. P. Bell: I find it a little bit rich listening to the member opposite lecture us on forestry when we have witnessed the biggest single meltdown in the U.S. housing market ever — ever — in the history of the globe. It's this government and this leadership that charted new waters into the Chinese marketplace, into bioenergy, into new opportunities around tall building construction — really innovative strategies that have led to thousands

[ Page 10337 ]

and thousands of people going back to work.

What the problem is, is that the member opposite doesn't believe that anything beyond British Columbia can possibly impact us here. The difference on this side of the House is we go out and find the opportunities for our forest industry.

[1425]

[End of question period.]

J. van Dongen: I rise and ask for the attention of the House to make a personal statement.

Mr. Speaker: Proceed.

Personal Statement

RESIGNATION FROM CAUCUS

J. van Dongen: For almost 17 years I have risen in this chamber to represent the best interests of my constituents and the best interests of all British Columbians. I have done so as a member of the official opposition for six years, as a member of cabinet for eight years and as a private member for three years.

Throughout that time I have been keenly aware of the privilege and the responsibility that comes with being an elected member of this assembly. I have always tried to conduct myself in a manner consistent with the expectations of those who entrusted me with this office. I am by no means a flawless individual but have strived for personal and political integrity. I've always taken ownership of my own shortcomings.

I had hoped that there would have been renewal in my party and in government, but in the last 12 months I feel that has not happened. Indeed, every week constituents question government actions and issues that I am not able to defend.

What I believe people expect from political leadership are core values that include integrity and a genuine commitment to public service. Integrity includes honesty, ethics and personal character. Integrity is non-negotiable. It is foundational for a strong organization, and most importantly, integrity includes full accountability.

To this day, there are still serious unanswered questions regarding the writing off of $6 million in legal fees in the B.C. Rail case, contrary to government policy — questions I have been asking for a year and a half, and questions the Auditor General is seeking answers to through the courts. Most recently, the unexplainable cancellation of a $35 million naming rights agreement with TELUS is, in my view, another example of failed leadership.

There have been other lapses in proper accountability, and I expect more to come. When more and more decisions are being made for the wrong reasons, then you have an organization that is heading for failure.

Today I rise because I can no longer carry on with my duties as a member of government. I have decided to resign as a member of the B.C. Liberal government caucus, and I'm cancelling my membership with the B.C. Liberal Party.

I believe the people of B.C. deserve a government that will look in the mirror and honestly contemplate what it sees, a government that people have trust and confidence in, a government that models true accountability for its actions.

To my colleagues in the government caucus as well as those in opposition and those who sit as independent MLAs: I celebrate each of you and your willingness to serve the people of British Columbia. This is not an easy job, so to all of you who continue to strive for excellence, I applaud your efforts.

To my constituents: in the coming days and weeks I look forward to speaking with you and further discussing the decision I have made. Indeed, I do have much to share and will in the coming weeks make it clear that while this was not an easy decision, it was the only decision I could arrive at in good conscience.

To the government caucus staff, constituency assistants and party staff: it has been a privilege to work with you.

To all those public servants who I have had the honour of working with: rest assured that my work with you to accomplish the goals and policies that were right for all British Columbians has been one of the most meaningful aspects of my time in public office.

To my family and friends: thank you for standing by me through some difficult times. In particular I wish to thank Sherri and Lukas for their continued love and support.

In closing, Mr. Speaker, looking forward, I will do what I have done for the past 17 years. I will put my time, energy and talents to serve my constituents and the party that I believe can best provide British Columbians with a broadly based, credible, free enterprise option in the next provincial election. Therefore, I am pleased to announce that I will now be sitting in this House as a member of the B.C. Conservative Party.

[1430]

I look forward to continuing to work for all my constituents in Abbotsford South and for all British Columbians.

Thank you, hon. Speaker, and thank you, Members.

Orders of the Day

Hon. R. Coleman: In Committee A we'll be continuing the estimates for the Ministry of Aboriginal Relations and Reconciliation. Following that, should we get done, we would move to the Minister of Agriculture. In this House we will be moving to interim supply. Following that, we would be moving to municipal auditor general,

[ Page 10338 ]

if we should get there. So interim supply.

Introduction and

First Reading of Bills

BILL 27 — SUPPLY ACT (N o . 1), 2012

Hon. K. Falcon presented a message from His Honour the Administrator: a bill intituled Supply Act (No. 1), 2012.

Hon. K. Falcon: Mr. Speaker, I move that Bill 27 be introduced and read a first time now.

Motion approved.

Hon. K. Falcon: Bill 27 will provide interim supply for government operating expenses for the first nine weeks of the 2012-2013 fiscal year. Bill 27 will provide interim supply for 50 percent of the year's financing requirements for voted capital expenditures and loans, investments and other requirements. It also provides supply for 100 percent of the year's requirements for revenues collected for and transferred to other entities.

By leave, it is the intention of the government to proceed with all stages of Bill 27 this day.

Leave granted.

Mr. Speaker: Continue, Minister. We've had first reading on the bill.

Second Reading of Bills

BILL 27 — SUPPLY ACT (N o . 1), 2012

Hon. K. Falcon: I move that Bill 27 be read a second time now.

[1435]

Mr. Speaker, existing voted appropriations will expire on March 31, 2012. Bill 27 will provide interim supply until the 2012-2013 estimates have been debated and final supply is voted upon in this assembly. This will ensure the continuation of government services until final supply is in place.

Interim supply for ministry operations and other appropriations is based on the voted expense as presented in 2012-2013 estimates. The interim supply period for these appropriations has been set at nine weeks, which reflects the current legislative calendar for debate of the 2012-2013 estimates. Interim supply for financing transaction requirements is based on the voted requirements set out in schedules C and D of the 2012-2013 estimates.

These disbursements are not evenly distributed throughout the year. Additional appropriation is required to accommodate project timing. Therefore, interim supply for these transactions is set at 50 percent of the combined voted amounts in schedules C and D of the estimates.

Schedule E of the 2012-2013 estimates outlines the revenue collected for and transferred to other entities.

As there is no impact on the deficit, borrowing or debt resulting from

schedule E financing transactions, 100 percent of the year's requirements is being sought in this supply bill. These interim appropriations are based on the accountabilities outlined in the 2012-2013 estimates. They are not outside of the scrutiny of Committee of Supply. The final supply bill to be passed by the Legislature will incorporate these amounts to ensure that the estimates currently in committee reflect the total voted appropriation to be given to government in 2012-2013.

B. Ralston: I rise to speak briefly to the bill. The supply act will authorize spending for what is described as nine parts of 52 of the total amount of the votes of the main estimates. In other words, it would authorize expenditure according to the main estimates until the first week of June, by my calculation. As the minister has mentioned, the House is scheduled to rise in late May, having completed the budgetary process.

Beauchesne's Parliamentary Rules says that: "Interim supply provides the government with money to meet its obligations during the time before the main estimates are approved." It's also clear in Parliamentary Practice that "approval of interim supply does not authorize spending by the government on new programs. It only authorizes spending in accordance with the main estimates."

So the only additional thing I would say is a reference to the capital spending, which is fully proposed to be one-half capital expenditures in clause 2(c). Ordinarily, most of those expenditures are construction. Ordinarily, construction in British Columbia, given the nature of our weather and geography, begins in the spring and is usually completed in the late summer or early fall. So it's important that those projects get underway and be funded and that there be no impediment to them.

Obviously, the opposition reserves its right to carry its questions through the estimates process and reserves its judgment and its vote on the budget at the end of the process. But in order to keep the government running and to pay employees and all the other things that government does in the next nine weeks, we are prepared to support the bill.

Mr. Speaker: Seeing no further speakers, the Minister of Finance closes debate.

Hon. K. Falcon: I move second reading of Bill 27, Supply Act (No. 1), 2012.

Mr. Speaker: Thank you, Minister. We're just being certain that we passed the first reading. So if you want to

[ Page 10339 ]

put a motion forward on that, we'll move to second reading and then move through.

Hon. K. Falcon: Again, I move that Bill 27 be introduced and read a first time now.

Motion approved.

Bill 27, Supply Act (No. 1), 2012, introduced, read a first time and ordered to proceed to second reading forthwith.

Hon. K. Falcon: I move second reading of Bill 27, Supply Act (No. 1), 2012.

[1440]

Motion approved.

Hon. K. Falcon: I move that the bill be referred to a Committee of the Whole House for consideration forthwith.

Bill 27, Supply Act (No. 1), 2012, read a second time and ordered to proceed to a Committee of the Whole House for consideration forthwith.

Committee of the Whole House

BILL 27 — SUPPLY ACT (N o . 1), 2012

The House in Committee of the Whole (Section

B) on Bill 27; L. Reid in the chair.

The committee met at 2:42 p.m.

section 1.

B. Ralston: Can the minister explain how the calculation was made? I understand that this will carry the expenditure of government to the first week of June, by my calculation. Firstly, is that correct? Secondly, a brief explanation of how that calculation was made.

Hon. K. Falcon: This represents the voted expenses appropriation totalling $35,225,725,000 times nine, divided by 52 weeks — so that's the nine weeks of the year — which gives you the total of just over $6,096,760,000.

Section 1 approved.

section 2.

B. Ralston:

Section 2 refers to the

schedule C in the main Estimates , and the dependent clause at the end is: "…being substantially 1/2 of the total of the voted amounts referred to in those Schedules to the main Estimates."

Can the minister explain how the figure of one-half is arrived at?

[1445]

Hon. K. Falcon: I'm advised, Member, that the one-half rule has been standard for the last dozen years. It's especially important for school districts so they can get going on their capital programs and not be concerned about the dollars not being there or having a hiccup.

In terms of how the figure is arrived at, under

schedule C and D you will see the totals there, the voted appropriation totals. Under

schedule C, for capital expenditures, you see a total of $425.827 million, and then under

schedule D — under "Voted appropriations," disbursements — you will see $374.944 million right at the top of the page there. Those two are added up, and then the 50 percent rule applies. So when you add those up you get $800.771 million, and 50 percent of that is $400.386 million.

B. Ralston: I'm looking at

schedule D. It's referred to in the main estimates as "Financing Transactions — Loans, Investments and Other Requirements." Can the minister explain the purpose of including this in subsection 2(b)?

Hon. K. Falcon: I'm advised that the reason why these are included is simply because these are financing requirements for the year that are going to have…. We want to make sure there's going to be no interruption.

For example, you can see under there that things like the StudentAid B.C. loan program…. You want to ensure that there will be no interruption in that whatsoever. My understanding is that this is standard operating procedure over at least the past 12 years. I'm not as familiar with it prior to the previous 12 years.

B. Ralston: Looking at the

schedule again in

schedule D, the minister has referred to the StudentAid B.C. loan program. There is a reference to receipts and disbursements. I understand the need to disburse to continue the program. What are the receipts that are referred to in the first column?

Hon. K. Falcon: Those would be loan repayments that are being made by students.

B. Ralston: Similarly, in the "International fuel tax agreement (Motor Fuel Tax Act)," there is a column for receipts and there's a column for disbursements. Can the minister…?

[1450]

The receipts vastly, according to this table, are greater than the disbursements, yet there's a figure on the right-hand side, $9.305 million, which doesn't have brackets around it. I take it that is positive rather than negative, and no further disbursement is required. Is that correct?

[ Page 10340 ]

Hon. K. Falcon: I'm advised that the difference is largely a timing differential reflecting the cash flows, as the cash flows are estimated to be coming in as receipts and going out as disbursements.

This is under the international fuel tax agreement. This is largely the commercial transport industry. We have tax agreements with the United States, for example.

It gets quite complicated, but essentially it comes down to what percentage of the driving you were doing within a jurisdiction. There's a calculation made, and then you receipt or disburse based on all of that. There's an important timing differential that can take place here, and this is an estimate for the year ending March 31, 2013.

B. Ralston: At the bottom of

schedule D, under the Ministry of Labour, Citizens' Services and Open Government, there is a line item entitled "Release of assets for economic generation — development and sale of surplus properties and buildings," and disbursements of $3 million are required. Can the minister explain why that is included in this

section and this schedule, rather than simply being a part of the main estimates? It doesn't seem consistent with what has been said so far.

I note at the top of the page that the explanatory note says…. Just for the sake of clarity, I'll read it:

"The allocation of the total voted disbursements among special offices, ministries and other appropriations or among categories of loans, investments and other requirements is shown for information and planning purposes only." The money disclosed for special accounts is "subject to the available spending authority within each account. Treasury Board may reallocate the total voted disbursements among special offices, ministries and other appropriations. No reallocation may result in the total voted disbursements set out in this

schedule being exceeded."

[1455]

Perhaps he could clarify why this amount of $3 million…. I understand that the minister…. This will be the subject, perhaps, of some questions when we come to the minister's estimates, but in the budget speech he did signal his intention, not in this fiscal year but in next fiscal year, to reap some anticipated revenue from the sale of so-called surplus properties. There's a $3 million item of disbursements and no receipts, so I'm wondering why it's in this

schedule and not in the main estimates.

Hon. K. Falcon: These, Member, are costs that are normally netted from revenues on the sale of a property, so they typically are costs that will take place in advance of the sale of the property. These are the kinds of things, like site preparation and advance-marketing costs, that will take effect prior to the sale of the property. Of course, when the property sells, then those costs will all be netted off against it.

What we're doing here is making sure that we've got an allocation for some of those costs that may be undertaken and to ensure we have a voted appropriation for that in the course of the interim supply.

B. Ralston: I thank the minister for that explanation. Then does this signal the establishment of a special account to receive the revenue, depending on what it is, from the sale of so-called surplus properties and buildings? Will that separate special account be open to scrutiny as we go along? I think many people would be interested in that.

Hon. K. Falcon: The answer is no. There's not a special account that's being set up. It, of course, will be operating in…. The Ministry of Labour, Citizens' Services and Open Government has been tasked with this effort. This is just to ensure that they've got the voted appropriation to have the expenditure of those dollars allowed for the utilization of things like site preparation, advance marketing, etc.

B. Ralston: Further up the page, under the Ministry of Forests, Lands and Natural Resource Operations, there's an item entitled "Crown land administration — development of land for sale in future years" and a sum of $5.878 million. Is this also related to the proposed sale of so-called surplus properties and buildings?

Hon. K. Falcon: No, this is the normal operation of Crown special accounts sales, so there's nothing unusual about this at all.

B. Ralston: Similarly, in the same ministry, "Tourism development — development of land for sale in future years" and an allocation of $600,000. Is this related to the final item, the release of assets for so-called economic generation, or is it another account?

Hon. K. Falcon: No, it is not related. If it was related at all, we would have it in that category below.

[1500]

B. Ralston: Given what's said in the explanatory note, does the minister agree — and I think he would have to — that within this total voted appropriation, when it passes, money can be reallocated but it can't exceed the total amount of the allocation? For example, if the development of sale of surplus properties was underestimated at $3 million and $5 million was required, could reallocation be achieved within this voted appropriation?

Hon. K. Falcon: That is correct. In the example the member just gave, you would have to find it somewhere else.

Section 2 approved.

section 3.

B. Ralston: This clause,

section 3, refers to

schedule E

[ Page 10341 ]

of the main estimates.

Schedule E of the main estimates refers to financing transactions, revenue collected for and transferred to other entities. For example, in the Ministry of Finance, the minister's own ministry, there is for B.C. Transportation Financing Authority a receipt of $435 million and a disbursement of $435 million. Perhaps the minister could briefly explain that entry.

Hon. K. Falcon: In this case these are all dedicated dollars that just flow through. They simply come in, and we send them back out, so there's no impact whatsoever on our surplus, on borrowing or on debt. These are dollars that go to post-secondary institutions, for example, or B.C. Transit or TransLink fuel tax — those kinds of things. They flow in and flow out.

B. Ralston: I thank the minister for that explanation. Looking at the entry for the Ministry of Energy and Mines, there are two line items: northwest transmission line — a receipt of $60 million and a disbursement of $60 million; and the Oil and Gas Commission — $31.157 million receipt and disbursement.

I would expect in the Oil and Gas Commission, that came from fees that the commission would collect. Can the minister explain the source of the $60 million receipt that's received for the northwest transmission line?

Hon. K. Falcon: Those are federal dollars that we flow through to B.C. Hydro for the development of the northwest transmission line. The other below — I think the member correctly referred to it. Those are fees that we administer on behalf of the Oil and Gas Commission.

B. Ralston: I think this may be the final question. South Coast British Columbia Transportation Authority — $308.1 million receipt and disbursed. Can the minister explain the source of that $308.1 million?

Hon. K. Falcon: That would represent fuel taxes that are collected and then transferred over to TransLink to finance their operations.

B. Ralston: The British Columbia Transportation Financing Authority — $435 million receipt and disbursement. Is that money borrowed by the province on behalf of the B.C. Transportation Financing Authority and then transferred to TransLink?

Hon. K. Falcon: That's the same as TransLink. It's fuel tax that is generated, collected through the B.C. Transportation Financing Authority and then disbursed.

[1505]

Sections 3 and 4 approved.

Preamble approved.

Title approved.

Hon. K. Falcon: I move that the committee rise and report the bill complete without amendment.

Motion approved.

The committee rose at 3:06 p.m.

The House resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

BILL 27 — SUPPLY ACT (N o . 1), 2012

Bill 27, Supply Act (No. 1), 2012, reported complete without amendment, read a third time and passed.

Hon. I. Chong: I call committee in this House for Bill 20, Auditor General for Local Government Act.

Committee of the Whole House

BILL 20 — AUDITOR GENERAL FOR LOCAL

GOVERNMENT ACT

The House in Committee of the Whole (Section

B) on Bill 20; L. Reid in the chair.

The committee met at 3:08 p.m.

section 1.

Hon. I. Chong: Before we begin, I'd just like to introduce staff who are here. To my right I have Nicola Marotz, to my left Rena Bindra and Gary Paget.

With that, I'll take questions.

Section 1 approved.

section 2.

H. Lali: I want to thank the minister and the staff who obviously will be answering questions for the next few hours.

I want to start off by making a bit of a statement before I ask my question. I want to put it on the record that the NDP supports accountability. We also support transparency in terms of what government does and what ministers and ministries and staff do. I just want to point out that we also believe in consultation. That's also very, very important.

When I was a member of government, having had the chance to sit on the opposite side, I was a member of the government that brought in the Freedom of Information

[ Page 10342 ]

and Protection of Privacy Act that was the flagship for any state or province in North America.

[1510]

We also brought in legislation concerning the conflict-of-interest act for members of this House — some major changes and the accountability aspect of it; and also the new Elections Act, whereby constituency associations and parties have to register with Elections Canada, complete with spending limits and a whole lot of other transparency in terms of reporting. I know the minister and the government want to be able to do that as well.

Also, I want to point out that currently there is legislation. There are also regulations that exist for the provincial Auditor General and other areas. I made some comments during second reading that we believe, as opposition, that this bill actually misses the mark. We will be able to actually ask some questions on a number of the sections that are particularly important. We will do that as the sections come out.

Also, the bill that's before us here at committee stage puts forward the auditor general for local government, which is actually different from any of the other provinces that we have in our Confederation. We'll be asking some of the pertinent questions.

I want to start off on

section

Section 2 sets out the appointment of the auditor general and provides that "on the recommendation of the minister, the Lieutenant Governor in Council may appoint…a qualified individual to be Auditor General for Local Government" for a term of five years.

I want to ask the minister why it is the minister who is making the recommendation to appoint an auditor general for local government and not a select standing committee of the Legislature.

Hon. I. Chong: The objective here is for the minister responsible for the auditor general for local government to make a recommendation to cabinet, based on a recommendation from an audit council that will consist of a body of experts on subjects like accounting, auditing, local and provincial governments. That will, as I say, enable us to use those individuals on the audit council, to have a wide range of opportunities to interview, to find the person that they believe is best suited to act as auditor general for local government.

I expect the audit council to then provide that to myself. Then on that recommendation I would take it to cabinet.

H. Lali: The minister hasn't answered my question. I'm still asking the minister why it is that she felt it would be the recommendation of the minister. My specific question to the minister is: why not put this to a select standing committee of the Legislature? We have select standing committees. They are in place to hire the provincial Auditor General.

This is no small measure, the municipal auditor general. You're looking at basically tens of dozens of municipalities and regional districts across the province. To be able to perform a lot of the same duties as the provincial Auditor General does…. It's not a position, obviously, to be taken lightly, either.

We have a fair process where members sit on the select standing committee, comprised of membership from this Legislature, who are answerable to the people. The accountability is there through the Legislature, through all of the debates that we have here. Why is it that the minister chose a different path — to actually recommend herself for the appointment as opposed to having the select standing committee go through a process, as we do when we hire the Conflict of Interest Commissioner, the provincial Auditor General and other officers?

[1515]

Traditionally, this Legislature is responsible for putting out the ad through the select standing committee, taking in the resumés and CVs and letters of application, going through a vetting process that is fair, open and accountable. It is independent from cabinet or government or from the ministers themselves.

It is a fair process, and it is based on a unanimous recommendation of the bipartisan committee of this Legislature. This is not a small position; it's a huge position. It's a very important, very significant position similar to that of the provincial Auditor General with a lot of duties and responsibilities that we're going to get into later.

I'm going to ask the minister: why was the similar process not chosen or selected by cabinet — that it would be a select standing committee of the Legislature who would look after that, rather than the minister herself?

Hon. I. Chong: I'd like to begin my comments by reminding the member that this position is not a provincial statutory officer. While it may have some of the hallmarks of the same areas of responsibility and accountability of how the office will work, it is not a provincial statutory officer.

The reporting structure for any auditor general does aim, though, to satisfy independence and accountability, and that independence is from the entity being audited. The accountability is ultimately to the citizens.

For the provincial Auditor General — and I just wanted to make this clear — independence from the entity being audited means independence from the provincial government through the Legislature. Accountability to citizens is also satisfied by reporting through to the Legislature. That's where the difference is. The provincial Auditor General, as the member has indicated, is reporting through the Legislature.

For the auditor general for local government we are establishing a separate reporting structure — that is, an audit council. That will ensure the independence from

[ Page 10343 ]

the entities being audited while also reflecting the principle that local governments are a separate order of government. They are elected by and directly accountable to their communities.

Local governments are not accountable to their citizens through the Legislature. It's for that reason that this is how the structure of the office and how the reporting requirements and the hallmarks of independence will be determined.

H. Lali: It doesn't, again, entirely answer my question. I mean, the minister went into a sidebar kind of conversation about the AGLG not being a statutory officer of the Legislature.

Municipalities and regional districts are a creation of the provincial government. Municipalities and regional districts collect the property taxes on behalf of the provincial government.

They are so intimately tied to the provincial government, with funding flowing back not only in terms of the property tax transfer but also for various other projects or grants that they may have — for instance, building of water and sewer projects within municipalities and regional districts, the construction of sidewalks and roads, a number of programs that municipalities also deliver, and the grant programs that exist which flow from the community development ministry and other ministries to the provincial government.

There is that intimate tie between the municipalities and regional districts, and the province on the other hand. As I mentioned at the outset of this conversation, municipalities and regional districts are a creation of the provincial government. So it's entirely up to the provincial government to decide whether the AGLG would be a statutory officer of the Legislature or not.

With the two divergent paths, there was a path that the minister chose, that cabinet chose, which was not to make the municipal auditor general a statutory officer of the Legislature. Therein lies my question. Why was that other path chosen? Why not have the position open and accountable?

[1520]

I mean, this whole — and we'll get into it later — lobby that took place…. The now Premier, who was vying for the leadership of the Liberal Party and hence become the Premier, had an agreement with a certain lobby group, if you want to call it, or folks that wanted to support her leadership — the Canadian Federation of Independent Business and the B.C. Chamber of Commerce amongst others who were going to give the Premier support. But they wanted a municipal auditor general in place. They cited issues such as accountability and openness as factors.

So my question to the minister is…. She chose a path which actually deviates from that whole issue of independence. It makes it less accountable — makes it accountable to the minister but not to the people that it's supposed to serve in terms of the municipalities. And a lot of the funding flowing back from the province to municipalities, not being accountable to the provincial taxpayer…. We're all one taxpayer. But at the end of the day, $2.6 million is going to be flowing towards the creation of this office, which gives it that provincial realm.

Why did the minister choose the path of making it less independent and less accountable — that the minister is going to make the recommendation and not a select standing committee of this Legislature?

Hon. I. Chong: Hon. Chair, with respect, the member has mentioned a couple of times for the record — and I will try to correct him — that he feels I have not answered his questions. In fact, I have answered his questions. He may not like the answer, and I accept that.

What I have said is that local governments are not accountable to their citizens through the Legislature. The select standing committees, as we have established for statutory officers, require that accountability to the Legislature. Again, local governments are not accountable to their citizens through the Legislature. It's for that reason that we need to establish a mechanism to allow that degree of independence, and that's the reason why an audit council has been determined as a way to provide for that.

I will also advise the member, through the discussions I have had with UBCM, that their policy paper they provided to me in September asked that the auditor general for local government report through a separate committee composed of representatives of the local government system — those who understand the local government systems in that case. They did not ask for a committee comprised of members of the Legislature. Therefore, citizens would not see that as sufficiently separate from local governments being audited.

I just want to again make it clear that the auditor general is not reporting directly to me. The auditor general has the autonomy to decide what audits are undertaken, and then that will provide the accountability to the public through the audit council. I trust I've made that matter clear for the member. I've answered his questions. He may, as I said, not agree, but that is in fact the answer.

H. Lali: I'm going to try this one more time. The minister is right. I don't like her answer because she's not giving an answer. That's the reason I don't like the answer. There are other reasons as well.

The minister may want to say that municipalities and regional districts are not answerable to the folks they represent through the Legislature. The fact of the matter is there's $2.6 million of provincial coffer moneys that are going to fund the office of the auditor general for local government, and there ought to be that accountability through the Legislature. But the minister has taken on that role.

[ Page 10344 ]

We don't know what kinds of discussions take place, and this Legislature doesn't know. Members on the back bench on the opposite side don't know. They're not in cabinet or privy to those kinds of discussions. We have no idea what kinds of discussions are taking place between the minister and whoever the future auditor general is going to be, as well as the audit council.

The fact is that $2.6 million of provincial moneys are going to fund this office. So we have a right to expect that that accountability would be through this Legislature, not through the minister.

[1525]

So I'll ask a final time. Will the minister agree with me that the recommendation to hire a municipal auditor general ought to be through a select standing committee of this Legislature and not based on the recommendation of the minister alone?

Hon. I. Chong: I would like to address the comments the member made with respect to accountability of the dollars. I do want to advise and inform him that there is accountability for the budget, the $2.6 million. That money is voted through the budget estimates, so there is the accountability for those dollars spent there.

With respect to the establishment of the auditor general as well as the audit council, I just want to again inform the member and this House that this is a relatively new concept in this province — not necessarily new across the country. There is no standard mechanism or standard for establishment of an auditor general.

What I can say is that there are no other provinces in Canada that have auditor generals for local government reporting through to the provincial Legislature. It's for that reason why a select standing committee that reports to the Legislature would not be a good fit for the way that the auditor general for local government is established.

B. Ralston: The minister has spoken of the hallmarks of independence. Does she characterize the following facts as hallmarks of independence?

On her recommendation in 18(2) the Lieutenant-Governor-in-Council "may appoint no fewer than 5 persons to be members of the audit council and must designate one of the members as chair of the council." So the minister recommends the appointment of the council, recommends the appointment of the chair of the audit council. The audit council then recommends to her a candidate for auditor general, who she also selects. So the minister's hand is in this whole process. Is that her definition of independence?

Hon. I. Chong: Let me just provide to the member, with respect to the auditor general for local government, a number of hallmarks of independence, if you will, which are similar to those provided to the provincial Auditor General. They're not identical, but there are some similarities. One of these hallmarks would be a fixed term of office. We are going to establish a five-year term.

A legislative mandate for the auditor general for local government which includes the sole discretion to choose which performance audits to undertake and which local governments to audit is yet another hallmark of independence.

The freedom to publish reports and recommendations without any required approvals. There will not be a requirement for myself to approve those published reports. I play no role in the development and publication of any of the auditor general for local government's reports, and the audit council has no authority to require that the auditor general for local government change the content of any of those reports.

Another hallmark of independence would be the professional independence, as the auditor general for local government must be a qualified auditor. This means that the auditor general for local government is subject to the rules and guidelines of the professional audit association of which he or she is a member, as well as the standards put forward by the Canadian Institute of Chartered Accountants, the Canadian auditing standards and general assurance in auditing standards, standards for assurance engagements other than audits of financial statements.

Another hallmark of independence is a limit to the basis for any suspension or removal of the auditor general for local government. This can only happen for cause or because of incapacity. We also have a legislated personal liability protection. Those are some of the hallmarks of independence which the provincial Auditor General has, and we have provided for that in this legislation as well.

[1530]

B. Ralston: The minister has spoken of hallmarks of independence and has given some comments. Doubtlessly, we will deal with this in later sections. But given that the debate is arising in

section 2 here, one shouldn't let the opportunity go to bring to the minister's attention the fact that the audit council appointed by the minister or by the Lieutenant-Governor-in-Council to cabinet on her recommendation, in 22(4), "must review the proposed annual service plan and, subject to subsection (5), may provide comments and recommend changes to the plan as the audit council considers appropriate."

Now, given that the audit council works intimately with the auditor general and is appointed by the Lieutenant-Governor…. Although the auditor general will be appointed for five years, obviously he has to respond to the audit council. One can see that it's likely that if the audit council recommends changes, the auditor general would be wise to do that. So there's that control and inhibition of the independence of the auditor general.

Secondly, in

section 23, on performance audit reports, it says in subsection (4): "The audit council may provide

[ Page 10345 ]

comments to the auditor general on the proposed final performance audit…submitted under subsection (3)." Not only does the council get to recommend changes to the plan before it's begun; if they don't like the report, they can recommend changes to the auditor general before the report is released.

The minister speaks of the hallmarks of independence. Does she agree that those are not hallmarks of independence?

Hon. I. Chong: I just wanted, again, to reassure the members that one of the hallmarks of independence is to provide that auditor general for local government the unfettered ability to do the job that he or she determines will allow for him or her to publish reports in a way that will provide value to the auditee — i.e., the local government.

When the member suggests that the audit council, under subsections 22(4) and (3) — I know we've hopped a little further into the act — must review the proposed annual service plan and is able to provide comments and recommendations…. There is no requirement that the auditor general take into consideration those recommendations.

The auditor general is free to hear…. There might be some very valid recommendations that the audit council makes to the auditor general with respect to the service plan or to a number of other areas, but there is no requirement that that auditor general undertake those recommendations.

In addition to the reports that the auditor general will be publishing, recommendations can be made. But the auditor general is permitted to issue those and publish those as he or she sees fit, as well as, then, after an audit is conducted, to provide any such report to the local government without any changes that are directly required of that auditor general for it to be published.

I hope that does provide some clarification to the member.

B. Ralston: The minister mounts some kind of a defence to this suggestion that the auditor general for local government will not be independent, but I don't think it's a very convincing one. My experience on the Public Accounts Committee, as a member and as the Chair, is that the Auditor General, who is nominated and selected by an all-party committee, selects his own topics to be audited.

[1535]

There's a power to make a suggestion, but there's no formal mechanism by which he's obliged to consult to put the topics of his audit plan, as opposed to the budget for it, before the committee.

Secondly, the idea that the Auditor General would come back to the Public Accounts Committee with a draft report in camera and receive suggestions about it…. That step doesn't take place. The Auditor General has the control over the production of his report. It is shared with the entity being audited but not with the political direction of the Public Accounts Committee.

Would the minister not agree that this is really a very poor substitute for genuine independence, in the sense that an audit council that the minister and the cabinet appoint will appoint an auditor general for local government? The reports will be scrutinized by that same audit council, based on scrutinizing the plan that the auditor general sets out. So at every step the independence of this auditor general will be fettered. Is that not accurate?

Hon. I. Chong: At this point I think we are actually getting into

section 4 of the act. I don't know if the member wishes to pass sections 2 and 3 for us to get to

section 4, but I will provide the response to his question because it does refer to

section 4, and that is with respect to the selection of audits and limits on audits.

There does need to be a balance between professional independence for the auditor general for local government and his or her accountability to the public for his or her performance, and that's why the audit council has a role in reviewing the service plan. The service plan will not go into specifics as to which local governments will be audited, but it will outline annual objectives, goals and performance measures as well as general criteria for deciding priority themes of audits.

That's not unlike what the provincial Auditor General is also provided — the opportunity to do that, to prepare an annual service plan. Yet he has the sole discretion to select those audits that will be conducted.

There is some similarity with respect to the independence that is afforded the Auditor General. The service plan is provided and is allowed to be reviewed — in the case of the provincial Auditor General by the select standing committee and in this particular case by the audit council. Likewise, with the provincial Auditor General and the auditor general for local government, the selection of audits will be at that discretion of the auditor general.

H. Lali: Under subsection (2) it says: "Before making the recommendation referred to in subsection (1), the minister must consider the recommendation of the audit council under

section 19 (1) (a)." Could the minister explain to me why the word "must" is in there?

At the end of the day it's the province of British Columbia that's putting forward $2.6 million towards the auditor general's office. But the wording here says, under subsection (2) under this section, that the minister must consider the recommendation of the audit….

So the audit council goes out and finds somebody, and they're going to recommend to the minister, but the minister must consider their recommendation. Are the minister's hands tied in this? I mean, who has the final authority? The audit council? Or is it the minister?

[ Page 10346 ]

Hon. I. Chong: It seems somewhat confusing. At one point the member suggests that I not be involved with respect to the appointment of the auditor general and then, on the other hand, suggests that where it says I must consider the recommendation of the audit council, it goes counter to that.

The objective here, of course, is that the audit council will have the ability to interview possible candidates for the position of the auditor general. The audit council will then provide those recommendations to me, and therefore, I must consider that. Otherwise, it would be indirect, or it would be that I would be ignoring the work of the audit council.

[1540]

So when the audit council provides those recommendations to myself as minister, I am required to consider those. That, therefore, allows me to take into consideration those comments, their deliberations, and then make that recommendation to cabinet. So I must consider what the audit council's work is.

H. Lali: There's no confusion in my mind. If there's any confusion, it's in the minister's mind. The minister has already stated that she's not going to actually have the whole hiring process be put off to a select standing committee of the Legislature — that it's going to be the way it's already put down in the bill.

So we're going onto the next subsections. There's no confusion there. I'm not trying to play one against the other. Under this particular subsection it says that the minister must consider.

The audit council is not a democratic body. The audit council is a body that is appointed. It's cabinet appointees on the recommendation of the minister. They're not an elected body. They're not even a representative body of various stakeholders within the municipal and regional district system or the UBCM. They're political appointees of the minister.

Now you've got political appointees who will make a recommendation that the minister must consider. Again, to the minister: where is the accountability? Where is the independence of the auditor general if a bunch of political appointees are making their recommendation that the minister must consider?

Hon. I. Chong: Again, I want to refer the member to comments I made earlier with respect to the discussion that I had with UBCM and the policy paper that they did present to me in September last year. They felt that the reporting relationship to a stand-alone board or committee — in this case we call it an audit council — would be the most compatible with local government autonomy.

So they have accepted that in order to provide that independence, a committee or board would be suitable, which, in case, we are now calling an audit council. Again, I want to make it clear that the independence of the audit council members will, in fact, be established by way of a number of factors that we're putting in place to ensure that the audit council is a separate arm's-length body.

The legislation does require the minister responsible, myself, then to undertake certain consultations. We have consulted with UBCM — that is one of the requirements — and other organizations that are representative of business, taxpayers and local government professionals. We may also undertake other consultations with other persons or organizations that we believe need to be consulted and, therefore, initiate a process that invites input from UBCM, LGMA, GFOA and the business community. That has been undertaken.

There is also a public process for inviting applicants to be members of the audit council, through the Board Resourcing and Development Office. That is also done as a measure so that members do meet the selection criteria developed in order for them to have knowledge of the work that is required of an auditor general.

As well, all audit council members will need, as I say, to meet the qualifications specified in the legislation. That requires some technical background either in accounting, auditing local and regional governance, or provincial governance.

The audit council, I do feel, has the degree of independence that is required for them to undertake the interview process, which will conclude with a recommendation that I would be able to take to cabinet for the eventual appointment of an auditor general.

Section 2 approved.

section 3.

H. Lali:

Section 3 is about the purpose and mandate of the auditor general for local government. It states here under subsection 3(1): "The purpose of the auditor general is to conduct performance audits of the operations of local governments in order to provide local governments with objective information and relevant advice that will assist them in their accountability to their communities for the stewardship of public assets and the achievement of value for money in their operations."

[1545]

Well, in the ministry's own document, Municipal Auditor General: What a MAG Will Do for B.C. — the pages aren't numbered, but it's on here under "Existing accountability framework" — here's what the minister's own document says:

"The current local government accountability framework is strong. Local government legislation, such as the Local Government Act and Community Charter, sets out financial accountability rules for B.C.'s 188 municipalities and regional districts. These requirements include annual audited financial statements; five-year financial plans updated annually; electors' approval of capital borrowing; limits on the amount of borrowing; public reports such as an annual report; requirement for balanced budgets — no deficit; and the role of the inspector of mu-

[ Page 10347 ]

nicipalities, independent bodies — for example, Ombudsperson, Information and Privacy Commissioner, the courts — and the Municipal Finance Authority."

The only thing that's additional here is the value-for-money audits that the minister talks about in her document here as well. The fact is that there's the existing provincial Auditor General that is in place. We have the inspector of municipalities, who also has a far-reaching role as well.

Why could this not have been done through the existing mechanisms that are in place? I would like the minister to explain why this government went about setting up a separate bureaucracy when already we have various entities that I've mentioned here, not the least of which are the inspector of municipalities and the provincial Auditor General, whose offices that could have been utilized?

Hon. I. Chong: The items that the member spoke about with respect to financial audits that currently are in place are correct. I have indicated in the past and I have agreed that yes, there are financial audits that are required of local governments. They produce those financial audited statements, and they do a number of other reports that are required to provide accountability to their citizens.

However, what is not in place is the opportunity for performance audits, value-for-money audits. That is what this auditor general for local government will be primarily focused on, in terms of its purpose and mandate.

The member also goes on to suggest that the inspector of municipalities would or could be engaged to do some of the work that he envisions an auditor general for local government would do. I think there has been confusion on that part. I'll take this opportunity to put on the record and clarify what an inspector of municipalities is, because it was raised a number of times when second reading debate was ongoing.

The inspector of municipalities' primary role is to approve local government long-term capital borrowing and other financial instruments, such as development cost charges. It could be a perceived conflict of interest for the inspector to approve borrowing for a project and then judge whether the local government has implemented that project most efficiently and most effectively.

The inspector of municipalities' role is supervisory, and it is focused on helping ensure the financial stability of a local government,

whereas the auditor general for local government's role will be advisory, not supervisory. The auditor general's role will be advisory and focused on assisting local governments to achieve efficiency and effectiveness in their operations.

As I said earlier, the auditor general for local government would be independent and would report through the audit council. The inspector of municipalities reports to the minister through the deputy minister of this ministry.

[1550]

B. Ralston: Well, I appreciate the minister clarifying her view on the role of the inspector of municipalities. As she will know, both the Union of B.C. Municipalities context paper on the municipal auditor general and an opinion from a lawyer at Young Anderson, the leading municipal law firm in British Columbia, say that under

section 171(3) of the Community Charter both the inspector of municipalities and every municipal council already have authority to require the municipal auditor to provide reports in addition to the annual financial statements.

Under the charter the municipal auditor "has the power and duty to conduct the examinations necessary" to prepare all such reports. This includes reports on, to use the language of the provincial Auditor General Act, whether the government is operating economically, efficiently and effectively.

Of course, the minister will be aware that just those words are used in subsection (2)(a)(i): "the operations are undertaken economically, efficiently and effectively." It's a little bit of an irony, given that the Union of B.C. Municipalities…. The minister says she wants to defer to the knowledge of those at the local government level. The leading municipal law firm already says that the inspector general of municipalities has those powers. Yet the minister is proposing in this legislation duplication of that very legislative authority.

I know that the inspector general of municipalities is an important position. It was vacant. I understand that there has been a recent appointment to that position, so it obviously has ongoing utility in the ministry and is not a mere appendage or frill.

My question relates to subsection (5). It says: "In carrying out the powers and duties under this Act, the auditor general must not call into question the merits of policy decisions or objectives of a local government." I want the minister, if she can and if she will, to define what "policy decisions" means in this context. Does it mean that if the municipality or the city on its own decides, as a part of their tax policy, to raise a tax or to charge a fee, that cannot be the subject of a performance audit? Is that what that

section is saying?

Hon. I. Chong: I want to again reiterate what the inspector of municipalities' role is. The inspector reports to the ministry by virtue of reporting to the deputy minister through to the ministry, so that does not provide the degree of independence. Again, the inspector role is supervisory as opposed to advisory. I want to put that on the record and really make the distinction, because the inspector of municipalities could not be the auditor general for local government in that regard.

With respect to what the auditor general for local gov-

[ Page 10348 ]

ernment is permitted to do, what perhaps will be easier to explain is what the auditor general for local government will not do. They will not question the merits of local government policy choices or objectives, will not question tax rates or practices, will not make binding recommendations or impose requirements and will not duplicate or displace current financial accountability requirements.

B. Ralston: So in answer to my question, then…. I want to summarize this, so I make very clear that I understand and so it's on the record, because I know many municipalities may be interested in this answer.

The minister is saying this subsection (5), the reference to "the auditor general must not call into question the merits of policy decisions" — not "choices" but "decisions" is the language of the

section — "or objectives of a local government…." That's the

section as it's written. By that the minister means that the auditor general will not, in a report, question a decision made by a municipality or city to raise its taxes or to charge a particular fee. Is that correct?

Hon. I. Chong: What this means is that the auditor general is not allowed to call into question the merits of policy decisions or objectives of the local governments. For example, the audits will not review whether a municipality decision to establish a particular recreation service to its citizens was a good idea or not. However, the audit could examine how that service is being delivered, whether that method of service delivery is efficient and effective and whether the service is achieving the results that council wanted to achieve when it chose to establish that service in the first place.

[1555]

That's just an example of a policy decision that is made by a local government. The auditor general would not be permitted to call that into question but would take a look at that decision in determining the outcomes, whether it achieved the outcomes that the decision was established for it to achieve.

B. Ralston: The minister didn't answer my question. It's an important one, and I want to ask her again. The

interpretation of this subsection (5) — does it mean that the auditor general for local government, if the statute is passed and the office is created, will not be able to call into question the decision of a city or a municipality to raise its taxes?

The reason I ask this is important, because some of the lobby groups, some of the other groups out there seem to think that this office will create a mechanism to attack or question generally the level of taxation in any city or municipality in the province, depending on where they are. There's a sense among some…. These are legitimate questions. I just want to make sure that this is not going to be addressed by this office — the level of business taxation relative to residential taxation.

Those would seem, to me, to be important policy questions for the elected council to decide, and I just want to be clear. I'm sure members of city councils across the province will be interested in the minister's answer, so I ask her to please direct her comments to my question. Does this mean that the auditor general for municipalities will not be permitted to examine a decision by a city council or municipal council to raise its taxes?

Hon. I. Chong: As I've indicated, the objective and the purpose and mandate of this office is to provide value-for-money audits, not to do financial comprehensive audits, not to do other duties that are performed by, for example, the inspector of municipalities. This subsection (5) is very clear in that it does say that "the auditor general must not call into question the merits of policy decisions or objectives of the local government."

In providing the policy paper that we put forward last fall we did also indicate there, for the benefit of local governments that were concerned, that the auditor general would not make or overrule policy decisions of elected officials such as taxation, structure or land use.

Again, I've indicated in my earlier response that the auditor general for local government will not question the merits of the local government decisions, question tax rates or practices. The objective here is to take a look at the decision that has been made and then take a look at whether the particular decision has been delivered efficiently and effectively, and whether or not it achieved the desired outcomes for that decision.

B. Ralston: I think I understand the minister's answer. She's agreeing with me that the auditor general for local government will not be able to question tax policy. So when a group like the Canadian Federation of Independent Business, which lobbied — and that's their prerogative — for this legislation, complains about residential taxation and taxation for categories 4 and 5, business taxation….

When they complain that they don't agree with the ratios, the minister is saying that that complaint, however legitimate it may be, is a legitimate area for political discussion but that going to this new office with that complaint will not yield anything. The municipal auditor general will not be able to act on that complaint, because it's ruled out by virtue of subsection (5) that we're talking about here. Is that right?

Hon. I. Chong: That's correct.

[1600]

H. Lali: Under this subsection 3(2)(a), and I'll go back a bit to read it into the record, it says:

"A performance audit conducted under this Act by the auditor general consists of (

a) a review of the operations of a local govern-

[ Page 10349 ]

ment, as the operations relate to a matter or subject specified by the auditor general, to evaluate the extent to which (

i) the operations are undertaken economically, efficiently and effectively, (ii) financial, human and other resources are used in relation to the operations with due regard to economy and efficiency."

Would the minister like to explain what that means?

Hon. I. Chong: The purpose of subsection 3(2) and all the other subsections below it specifically establishes what a performance audit consists of. It's a review that focuses on key elements of economy, efficiency and effectiveness. These provisions aim to provide a clear framework within which the auditor general can conduct performance audits.

So, as I say, it is dealing with the elements of economy, efficiency and effectiveness.

H. Lali: This whole idea of a municipal auditor general came because of the lobby of the Canadian Federation of Independent Business. Their biggest beef was about taxes on behalf of their membership. They were saying the taxes were going too high.

The Premier at the time had stated that it's a two-way responsibility — that the provincial government had been off-loading onto municipalities and regional districts for the decade that the Liberals have been in office, that there's a two-way responsibility there, and that the off-loading ought not to occur either. That was implicit in her remarks, as to one of the reasons why the CFIB would have felt that their property taxes were going up on behalf of their membership constituents.

So there's been a concerted, wholesale attack on municipalities and regional districts by the CFIB over the last 18 months or so — specifically during the leadership debate of the B.C. Liberal Party, during that whole debate. Part of it was the attack by the CFIB on the people — the workforce that works for municipalities and regional districts, who tends to the water, the sewers, the garbage, the roads, the sidewalks and the parks and all of the other responsibilities under municipalities and regional districts.

Specifically, they've been attacking the wages and the benefits as something that is way out of whack. But when you look at it across all provinces, British Columbia is in the middle of the pack in terms of the municipalities and regional districts.

There was this wholesale, concerted attack against not only trying to bring down the public sector wages in the municipalities but also to try to get a better deal on taxation. It was for that reason that the Premier, who was the leadership candidate, struck this backroom deal with the CFIB.

So when I see this

section 3(2)(a)(ii), which actually talks about "financial, human and other resources are used in relation to the operations with due regard to economy and efficiency," that raises red flags for me. If this isn't the

section under which the minister and this Liberal government are trying to reward their friends in the CFIB because of the backroom deal that the Premier made with the CFIB and the B.C. Chamber of Commerce…. If this isn't a way to try to look at that whole issue of property taxation and then try to actually have an attack on the workforce that works for regional districts and municipalities….

[1605]

Would the minister like to categorically say that this is not what is going to happen?

Hon. I. Chong: Subsection 3(2) is here to articulate the hallmarks or the requirements of the value-for-money audit. Perhaps I can try to explain it in this way for the benefit of the member. Value-for-money audits generally involve one or more of the following: audit of controls and practices to ensure due regard for economy, efficiency and effectiveness; the audit of resource management, with due regard for economy and efficiency; as well as the audit of effectiveness of programs, operations and activities.

[D. Black in the chair.]

Those three words that I've used — economy, efficiency and effectiveness — are throughout this definition. With respect to economy, that generally refers to spending management, to the acquisition and allocation of appropriate quality and quantity of resources at the appropriate time and optimal cost.

With respect to efficiency, oftentimes people will refer to that as the best bang for the buck. That's just the terminology that is being used. It refers to the use of resource inputs to optimize service outputs.

With regard to effectiveness, it's about doing the right thing. It refers to the achievement of broad social objectives and outcomes.

So as I say, this subsection does provide information that tries to clarify what we are looking at in terms of a performance audit — i.e., a value-for-money audit.

B. Ralston: Just again so we're clear, I'm looking at subsection (5). I appreciate that the minister has given an outline of what a performance audit is.

I suppose that one should mention parenthetically that the office of the provincial Auditor General is regarded across the country as a leader in performance audits. So it is regrettable, indeed, that the decision was made to set up a separate office rather than locate it with the provincial Auditor General, given the expertise on performance audits that resides there. But that's a decision that has clearly been made.

Now, I just want to be clear, and I want the minister to set this out clearly. By a policy decision…. The decision of a municipality to engage into a collective bargaining relationship with a union and the rates of compensation that are set by that collective agreement, and any of the

[ Page 10350 ]

provisions of that collective agreement such as call-out provisions or overtime or statutory holidays….

Would the minister agree that the intention of section (5) is to rule any inquiry into that off limits to this municipal auditor general, as being what would be called the merits of a policy decision?

Hon. I. Chong: Again I want to advise the member that the decisions that a local government makes as policy decisions are those policy decisions and choices a local government makes.

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That is not what the auditor general for local government will be calling into question. The choice to enter into an agreement, the choice to set tax rates, the choice to have recreation services — those are choices that local governments can and will make. What the auditor general will be able to do is to examine the operations of local government in particular. The "operations" have been defined in

section 1, and that means "the design or implementation of the programs, services, policies or systems of a local government and related procedures." So that is to take a look at the operations of that choice but not the choice itself.

B. Ralston: Well, I think we're close to an answer. The minister referred to agreements. By "agreements," I have a very specific term that I'm using, and I want to make sure the minister and I understand each other on this and that the record reflects this. I'm talking about collective agreements.

So is the minister saying that collective agreements — the provisions, the wage scale inside those collective agreements that are negotiated as a matter of policy by the municipality or city with its employees who perhaps have chosen to be represented by a union — are not the subject and cannot be the subject of an audit, a performance audit, by the auditor for local government?

Hon. I. Chong: Again, I think the member has very specifically articulated. The examples that he's given do relate to a matter of policy, a matter of choice that the elected officials make, and I agree with him.

Those are those matters that the local government, the elected officials, are able to make. Those are not what would be called into question by the auditor general. However, what can be questioned by an auditor general is the operations of that and whether or not those policy decisions meet the expectations of those choices.

H. Lali: So in the same vein, could the minister, then, categorically state that under this section, this entire section, the bill does not in any way allow for a revision or opening up of taxation policies of local government?

Hon. I. Chong: I did answer that previously.

H. Lali: I had asked that question previously, before my hon. colleague from Surrey started asking. My colleague asked about collective agreements — right? So I'm asking about the actual property tax rates that are set, the mill rates that are set by regional districts and by municipalities. So my question is different from my hon. colleague's. He talked about collective agreements. I'm talking about the overall taxation policy that municipalities and regional districts are responsible for at the local level.

So I just want the minister to say it. Does this

section allow those policies to come under review and to be opened up — yes or no?

Hon. I. Chong: A few questions ago I did answer that, not just the most recent question. So for the record I will again state that an auditor general would not make or overrule policy decisions of elected officials, such as, which I said earlier, taxation structure or land use.

K. Corrigan: I just want to follow up on the same line of questioning because I still don't understand. I don't fully understand what exactly would be and wouldn't be within the purview of the municipal auditor general. The minister said that, no, the auditor general will not be able to question policy decisions, but then the minister went on to say, I think, that the auditor general could comment on whether or not this was an effective use of tax dollars.

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So just being really specific, could the minister expect that the auditor general may not question the policy but, nevertheless, in a report make the comment or the suggestion that perhaps a municipality would do better to, for example, contract out services?

Hon. I. Chong: What I think is important for clarification is, in fact, that the auditor general for local government will have independence with respect to what he or she decides to audit and where he or she decides to conduct those audits — i.e., which local governments, which regional districts — and that the report the auditor general produces will be one that will provide for comments and recommendations but not a requirement that local governments necessarily adhere to them, not unlike what happens currently with our provincial Auditor General.

So I cannot speculate as to the range of comments that an auditor general may make or what range of recommendations that an auditor general may make as a result of an audit. That is the purview of an auditor general.

But again, what I will state for the record, what the member may not have heard previously when I answered one of her colleague's questions, is the auditor general not being able to call into question the merits of a policy decision or objectives of a local government but that the audits would, for example, review how that particular choice, that particular decision, of that service is being delivered.

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The example I gave earlier was an example of the policy decision being made by local government to establish, for example, a recreational service. The auditor general would not be able to call into question that the local government decided to enter into a recreational service agreement but can take a look at how that service is delivered, whether that method of service was efficient, whether it was effective and whether the service once established is in fact achieving the results that that local government wanted to achieve when it chose to establish the service. That's an example I'm hoping that for the member provides some clarification.

K. Corrigan: I wasn't suggesting that anybody can direct an auditor, and they are to be independent in deciding what kind of work they do. I hope that is the case here as well.

I asked that specific question because I want to understand where the edges of the mandate are. Given that nobody is going to direct where an auditor general is going to go, would it be within or would it not be within the mandate of the auditor general…?

If the auditor general chose to go there, would it or would it not be within the mandate of the auditor general to make a recommendation that it would be more efficient, more effective to contract out a service as opposed to keeping it in-house?

Hon. I. Chong: Again, as I indicated, we have no ability to fetter the range of comments that the auditor general would like to provide. So if the auditor general wished to make comment in that area or provide recommendations, as the member has suggested, that auditor general may do so. As is happening currently with our provincial Auditor General, a range of recommendations sometimes do come forward. It's up to the government, then, to decide how we deal with those recommendations.

K. Corrigan: Well, I'm glad to hear, because I think it's important for us to understand at this point exactly what the mandate is or isn't. The minister has very clearly said that it would be within the mandate of the auditor general, if the auditor general so chose, to make a recommendation to a local government that it would be better to deliver services by contracting out as opposed to keeping those services in-house — not commenting on the process, not commenting on the policy, but simply saying that it was more effective. I believe that's what the minister just said.

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So in the same vein, I'm wondering if…. I would assume, if the auditor general chose, that the auditor general could also, in looking at the operations of a local government, make a recommendation that it would be better for a local government to go by way of what is known as a public-private partnership as opposed to keeping a service in-house?

Hon. I. Chong: Again, I just want to clarify for the member that

section 3, the purpose and mandate, does set out what the purpose of the auditor general is. That is, to conduct performance audits of operations of local governments or to provide those local governments with objective information and relevant advice. That is what it is — advisory.

That's also what I tried to clarify earlier when we had the discussion about an inspector of municipalities versus the auditor general. The inspector of municipalities provides an advisory role,

whereas the auditor general provides advisory…. That is what the recommendations would be in terms of advice.

I don't want to leave the comments that the member has made wide open as to what an auditor general is going to, I guess, dictate what a local government is able to do. Again, the policy decisions that the local government decides to make are those by the local government. The auditor general is able to make recommendations in relation to a particular service or operation that the auditor general — he or she — has just audited