1993 Legislative Session: 2nd Session, 35th Parliament HANSARD

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

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

THURSDAY, MAY 6, 1993

Afternoon Sitting

Volume 9, Number 19

[ Page 5939 ]

The House met at 2:03 p.m.

E. Barnes: I have the pleasure of introducing seven of the interns who will be starting their duties in 1995. They are here with the program director, Mr. Paul Tennant. The students are: Nicole Boyer, Kim Chan, Lisa Dumbrell, Wayne McIlroy, Gian Paolo Panusa, Sarah Reder and Caroline Welling. I would like the members to join me in making them welcome.

Hon. A. Petter: I rise to welcome to the House some of the 146 high school students from the Sacramento Adventist Academy who shared their beautiful voices with us today in the rotunda from 1:00 to 1:15 p.m. This choir from Sacramento is on a performing tour through the western United States and western Canada. In particular, I'd like to welcome Robert Thornton, the choir director, and Richard Carey, the school principal, who arranged for the performance of the choir. I hope they have a wonderful trip through British Columbia. I would ask the House to join me in welcoming them.

L. Reid: I have the distinct privilege this afternoon of recognizing the birth of the newest Jarvis in the clan. Emily Jarvis is the newest granddaughter of our MLA from North Vancouver-Seymour, and the sixth generation of Jarvises in the province of British Columbia. I wouldd ask the House to please make her welcome.

S. Hammell: I rise to introduce Ansa, Claudio and Dino Bulfone, constituents who are visiting Victoria with Ansa's sister, Gunnel Noren, who is from Sweden. Would the House please make them welcome.

J. Pullinger: On behalf of my colleagues from Parksville-Qualicum and Nanaimo, I would like to welcome a couple of good friends -- good New Democrats and really good golfers -- who are with us today in the gallery: Betty and Owen Kennedy. Would the House please help us make them welcome.

Introduction of Bills

INDEPENDENT SCHOOL AMENDMENT ACT, 1993

Hon. A. Hagen presented a message from His Honour the Lieutenant-Governor: a bill intituled Independent School Amendment Act, 1993.

Hon. A. Hagen: The amendments to the Independent School Act include both substantive and technical changes. One significant amendment provides for the elimination of funding for group 3 independent schools. Group 3 schools will be joined with group 5 schools to form a new unfunded group 3 classification. In addition, the

preamble is amended, and changes are made to clarify the powers of the minister with respect to grants, materials and services provided to independent schools.

I move the bill be read a first time now.

Bill 20 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

SCHOOL AMENDMENT ACT, 1993

Hon. A. Hagen presented a message from His Honour the Lieutenant-Governor: a bill intituled School Amendment Act, 1993.

Hon. A. Hagen: This bill provides for a number of amendments. The

preamble is amended to more fully reflect the government's education principles and goals. There are a number of miscellaneous amendments dealing with such matters as: entitling parents to receive a copy of a student record; authorizing administrative officers and superintendents of schools to suspend students in accordance with board policies; provision of a standard provincial school calendar; the tax status of school board properties; coordination of planning for school facilities between school boards and local governments; and various other house-keeping amendments.

Hon. Speaker, I move the bill be read now a first time.

Bill 19 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

Oral Questions

CORPORATE CAPITAL TAX

F. Gingell: The Premier, when in Hong Kong recently, stated that the corporate capital tax was giving British Columbians "a sense of hope." Other than being a city at the far eastern end of the Fraser Valley, would the Premier please define hope?

Hon. M. Harcourt: Yes, it is east of Chilliwack, and yes, it is a town in Arkansas. I think what the people of this province are seeing in this government is the politics of hope. We'd hope to get on with the politics of hope if the opposition wouldn't stall one of the great initiatives in this province, which is B.C. 21, so we can get building the transit systems, the highways, the bridges, the courthouses and the schools that this province wants to see.

F. Gingell: The Premier in Hong Kong was also quoted as saying the tax is a swell idea, that it might remain after its debt reduction purpose has been achieved. In view of our need for economic development in this province, and on behalf of all British Columbians, will you please bring in recall legislation?

[ Page 5940 ]

BUY B.C. ADVERTISING CONTRACT

F. Gingell: My third question is still on the question of economic development in this province, and is to the Minister of Agriculture. First of all, I would like to apologize for our critic asking him a question on Tuesday, but today is Thursday, and I certainly hope that he is now briefed, in all senses of the word. Will he now allow Palmer Jarvis to make a submission and an offer on the Buy B.C. advertising program?

Hon. B. Barlee: Palmer Jarvis was in this equation. They were one of the four companies; they were given a reasonable chance.

This question rather surprises me for several reasons. First of all, if you had checked with the minister's council, which is 16 individuals ranging from the business community right down to the unions, every one of those people is on side. That was my privilege to overrule their recommendation. This is a Buy B.C. program; it's good for business, it's good for the farmers, and it's good for the consumers of British Columbia. I think it has to remain that way. We have submitted 12 contracts so far.

Out of those 12, 11 of them are B.C.-based and B.C.-owned companies, small and medium-sized companies that deserve our business. This program is designed to keep money and jobs in B.C., and everyone who is on my board agrees with it.

LABOUR RELATIONS BOARD APPOINTMENT

G. Farrell-Collins: My question is to the Premier. I would like to quote from the NDP election platform, which he touted around this province. I know he's forgotten what it says. It says: "You won't need an inside track to get fair treatment from a Harcourt government." Did the manager from the 1991 campaign write this, and does the Premier agree with it?

Hon. M. Harcourt: I'm glad that the hon. member from Langley is finally starting to get some good ideas from the New Democrat platform. They would probably be able to ask some better questions if they were to now pass that on to their researchers.

[2:15]

G. Farrell-Collins: If that's the best defence the Premier has of his election campaign, we're in really bad shape.

I do have a very serious question for the Premier. His Minister of Labour has made an appointment to the Labour Relations Board that has the potential to seriously damage the credibility and the independence of that board. In the best interests of labour relations in this province, will he order his incompetent Minister of Labour and Consumer Services to rescind that appointment today?

Hon. M. Harcourt: The answer is no.

G. Farrell-Collins: We are reaching a point with the Minister of Labour and Consumer Services where not just the opposition but the public at large are losing confidence. Will the Premier please -- I plead with him -- do his government and the people of this province a favour by removing the Minister of Labour from his responsibilities and appointing somebody who can do the job properly?

J. Weisgerber: My question is to the Premier as well. Hans Brown is simply an NDP hack, and he should never have been considered for an appointment to the Labour Relations Board. Does the Premier understand what he has done? Does the Premier understand that this appointment has absolutely destroyed the independence of the Labour Relations Board in everyone's eyes in British Columbia?

Hon. M. Harcourt: I think the Leader of the Third Party is aware that this government has attempted to appoint British Columbians who have the qualifications to be on either the Labour Relations Board or the Vancouver Stock Exchange. Yes, sometimes they are New Democrats in background, as Hans Brown is; and yes, they are Social Credit sometimes, as Mel Couvelier is on the Vancouver Stock Exchange.

J. Weisgerber: This appointment demonstrates an appalling lack of judgment and good sense by the Premier. What special power does Hans Brown have over this government and this Premier that he would risk the independence and neutrality of the Labour Relations Board in order to satisfy his demand for a patronage appointment?

Hon. M. Harcourt: I'm sure that the Leader of the Third Party is aware that Mr. Brown has an extensive background in human resources, has worked for two of the largest organizations in this province which are important and complex areas of activity. He is one of the leading experts in Canada on human resource classifications and on a number of other areas involving human resources. He is a person who has the qualifications for the role he's now playing.

J. Weisgerber: Last spring this government fired five totally competent, independent vice-chairs of the labour relations council for entirely political reasons. The severance pay for those five chairs cost the taxpayers $1 million. Can the Premier tell us what Hans Brown's conditions of employment are, what kind of severance arrangements he has and who negotiated his contract?

Hon. M. Sihota: There are a number of errors in the argument put forward by the Leader of the Third Party. First of all, with regard to the five people who were dismissed last year, those decisions were not based on political biases; they were based on personnel evaluations. Secondly, with regard to the contract that has been provided to Mr. Brown, it is a standard contract that applies to all members of the Labour Relations Board. Thirdly, I want to make it abundantly

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clear that Mr. Brown has had 13 years of labour relations experience in this province.

We as a government will not exclude qualified people from consideration simply because they have been active in our democratic institutions. In the case of Mr. Brown and others, they are qualified to do the job, and they ought not to be eliminated for consideration simply because they did what every citizen should do, which is to get involved in the political process.

CENTRA GAS NEGOTIATIONS

W. Hurd: I have a question for the Minister of Energy, Mines and Petroleum Resources. Can the minister confirm whether her ministry is involved in negotiations with Centra Gas for relief from an estimated $10 million in penalties for non-performance in connection with the Vancouver Island natural gas pipeline?

Hon. A. Edwards: No, I will not confirm that.

W. Hurd: Given the fact that the B.C. Endowment Fund owns 8 percent of the shares in Westcoast Energy, which is a fully-owned subsidiary of Centra Gas, is the minister prepared to have her ministry step back from these negotiations and urge some sort of third-party process that wouldn't compromise the position of the Endowment Fund, given the M-B purchase investigation by the Securities Commission?

Hon. A. Edwards: I have not confirmed that any negotiations are going ahead. That's what I said after the first question.

W. Hurd: Westcoast Energy has acknowledged that Centra Gas is involved in negotiations directly with some arm of this government regarding rate relief on the natural gas pipeline. Given that Centra Gas is in the energy business, can the minister tell us, in her view, which ministry of government they might be negotiating with?

EFFECT OF THE BUDGET ON THE AUTO INDUSTRY

R. Chisholm: Last week the Minister of Economic Development stated that anybody laid off in the aggressive auto industry will be able to find employment. This is to the Premier. Does the Premier have any hot job tips for the employees in Abbotsford who will not be working in a new $3.5 million dealership that has been delayed because of this budget?

Again to the Premier. Auto sales are down by 40 percent; subsequently, your revenues will be down by the same amount. Corporate capital tax revenues are down. Provincial sales tax revenues are down. Employment and income tax revenues are down. Will the government reverse this destructive policy before this whole province goes down?

Hon. G. Clark: I'm happy to answer that question because employment growth in British Columbia is two and a half times that of the rest of the country. Our economic growth is twice the rest of the country. This province is doing better than anywhere else in the country, the prospects are brighter than anywhere else in the country, and this government can take some credit for the strong growth we see coming over the next few years.

LABOUR RELATIONS BOARD APPOINTMENT

L. Hanson: In researching some of Hansard, I came across an interesting fact. The Minister of Labour told this House that personnel matters and matters of contractual arrangements with those who are working with the Industrial Relations Council, are dealt with through Mr. Lanyon's office. The question I have for the Minister of Labour is: why hasn't Hans Brown's contract been negotiated in the same manner, through the Labour Relations Board? Would the minister let this House know what personal involvement he had in the negotiation of Mr. Hans Brown's salary and terms of employment?

Hon. M. Sihota: Negotiations with regard to salary and terms of employment have not taken place between this minister and Mr. Brown. Any negotiations with regard to salary and terms of employment -- I take it you mean by that benefits and that kind of stuff -- are all matters that are negotiated between Mr. Lanyon and Mr. Brown. Secondly, I want to make it abundantly clear that this is an inclusive government that welcomes British Columbians from all walks of life to be active in public service. We welcomed Mr. Brown to be involved on the Labour Relations Board in much the same way as we welcomed Mr.

Couvelier, the former Social Credit Minister of Finance, to be involved on the Securities Commission, and in much the same way as we welcome Mr. Gordon Gibson, the Liberal leadership aspirant, to be on the B.C. Trade and Development Corporation.

Ministerial Statement

SECURITY DEPOSITS FOR INCOME ASSISTANCE RECIPIENTS

Hon. J. Smallwood: As minister, I believe it is critical that the Ministry of Social Services apply the highest standards to managing the income assistance system. British Columbians who need assistance for themselves or their families must receive the full support to which they are entitled by law. At the same time, taxpayers must have confidence that benefits are only going to those who are legally eligible. Concerns have been expressed about security deposits provided to people on income assistance.

We are working to bring immediate remedy to any abuse, and are actively reviewing legislative changes with the Minister of Consumer Services. In this time of economic hardship for many of us, I am angered and outraged by the attempt of abuse or of fraud of the welfare system.

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Fraud wastes taxpayers' dollars. It brings the entire welfare system into disrepute. With thousands of British Columbians who legitimately find themselves in need of help, it reduces the funds available to people in need and victimizes people who are living in poverty. It places extra pressure on the ministry's hard-working financial assistance officers around this province.

As the welfare caseloads have grown, ministry workers have been on the front lines providing help to those in need of help, counselling and supporting people to move from welfare back to work, and defending the system against fraud by screening out any false applications. I wish to assure this House that the ministry's financial assistance workers are doing a massive and difficult job, and they are doing it well.

Over the past year the ministry has introduced many new tough measures to crack down on welfare fraud. Computer technologies identify claimants applying for income assistance at more than one of our offices. Electronic monitoring tells us the number of income assistance cheques being delivered to any one address. Canada Post now returns cheques to our offices to be identified and reviewed, rather than forwarding them on to new addresses. Any of these actions will trigger an investigation.

We are working with Employment and Immigration Canada and the Workers' Compensation Board to identify double-dippers -- those individuals who claim income assistance in addition to benefits from other agencies. We're working with the provincial vital statistics division to ensure that false identification papers are much harder to obtain. Staff are receiving extra training to help recognize counterfeit documents. Unique characteristics have now been built into our welfare cheques to make them extremely difficult to counterfeit.

[2:30]

My ministry employs 35 investigators who, in conjunction with various police forces and regional Crown counsels, investigate and prosecute cases of alleged fraud at locations across this province. Every allegation is reviewed, including anonymous complaints from the public. In 1992 the ministry's fraud detection program recovered $4.7 million from those who attempted to defraud B.C. taxpayers. During the first month of this year, for instance, we concluded investigations on 646 cases.

Ministry investigators are now providing me with a monthly investigation report which outlines major causes of fraud and investigations and charges initiated during the month. I wish to thank the many police and RCMP officers who are daily working closely with my ministry's investigators to safeguard the integrity of the B.C. welfare system. But sophisticated technologies are increasingly available, making crimes like counterfeiting easier to perpetrate and more difficult to detect. This problem is not confined to the B.C. income assistance system.

Technologies such as laser printing and copying are posing even greater risk to the unemployment insurance system, passport control, and banks and credit card companies.

Today I am announcing the formation of an additional five-person special investigations unit which will be based on the lower mainland. Working closely with the police, this unit will focus on major fraud investigations involving income assistance clients who collect benefits under various names, and it will cooperate with our field investigators on major cross-jurisdictional crimes.

Moreover, we have reached an agreement with my hon. colleague the Attorney General to provide a senior Crown prosecutor, associated with the Attorney General's crime unit, to work with my ministry to expedite and ensure effective prosecutions of those alleged to be defrauding the income assistance system. This person will work closely with a special investigations unit to address significant major prosecutions, such as the recent laser counterfeiting of government cheques.

As caseloads rise, the challenge of safeguarding the system grows. Ministry staff and resources have been stretched to the limit to meet this challenge, so we have upgraded our computer technologies to provide staff with immediate, on-line provincewide databases. My ministry has implemented new procedures which can identify errors or misunderstandings affecting the level of benefits to which clients are entitled.

We will continue to deliver the highest quality service to those individuals and families whom our legislation is designed to help. We are committed to ensuring that those people get their full entitlement as they try to weather the storm of economic restructuring and recession, and move again from welfare to work. Be assured that we will be vigilant in addressing any allegations of abuse or fraud, and we will take necessary action to ensure the integrity of British Columbia's social assistance network.

V. Anderson: I rise in response to the ministerial statement. Over the past weeks and months there has been growing concern about the ability of this ministry to manage the program. There has been a concern about its ability to meet the needs of those who must rely on this ministry for support and at the same time provide the kind of support which corrects the abuses that the system itself seems to generate.

We commend the opportunity to detect where there is abuse and to correct this abuse. But we're angered and outraged -- as even the minister has said -- when some of the abuse -- in fact a great deal of it -- comes from the management of the ministry itself. We hope the ministry will be looking inwardly as well as outwardly, because I am sure they will discover that many of the causes are within the system itself.

This past week people have contacted us, and we are concerned about how the minister defrauds those who should be receiving help from their spouses through maintenance payments. When these payments are paid in arrears rather than when they are due, the minister takes from those people the very payments which are rightfully theirs, instead of working them out over the months when those payments should have been properly paid. This in itself is a victimization of the people in the province who are having the most difficulties: single parents with families. They have already had a breakup and expect the government to

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support them, not continue the victimization. Maybe they will look inside when they are undertaking these.

I am delighted that the minister has indicated there will be better staff support, because the staff has certainly been overburdened. Probably the greatest complaint we have heard over the weeks from people who are dealing with the staff is the victimization in their lineups, the victimization in having to meet people who do not have the time or the opportunity to give them the respect they need.

Yes, we do need to correct those people who are defrauding the government. But we are very cautious, because we have a New Democratic Party that very easily may become the new detective police force of this community. We are concerned that in the government's undertaking to correct abuses that are there, the people in the province who are dependent on the system will not themselves be further punished, further victimized, because they will not be given the opportunity to maintain their privacy and will be under the kind of observation and harassment that will deprive them of the very independence they seek.

We encourage the minister, who has responded to the large number of cries in response to the abuse of this system. We're glad she's moving to overcome the abuse, but we hope she will continue to look inward rather than outward for many of the causes.

R. Neufeld: I'm pleased to see that the Minister of Social Services is finally, after about 18 months, responding in a way to allegations about fraud in the welfare system.

It's not surprising to us that an NDP government, a socialist government, would increase the budget over two years by about $900 million, or 40 percent, and then all of a sudden put a light on and say: "Hey, we're going to investigate fraud now that we have the budget way up." But it's obviously time that she listened not only to the opposition's wishes about investigating fraud within the welfare system but the wishes of the people in the province of British Columbia. I'm sure she has received many letters, and so have I. I've read many letters in the newspapers from people who are upset about the social assistance program in B.C. and the fraud that takes place within it.

I want to thank the minister for giving me a copy of her speech earlier. I noticed that she started part way through it and left out: "Misdirected federal policies are part of the problem." It's typical of this government to blame it on everyone else. She also left out: "Ten percent of British Columbians need provincial income assistance to meet their basic needs."

We just listened to the Minister of Finance talk about how many jobs are being created in British Columbia and about the fact that our growth rate is two and a half times that of rest of the country, and everything should be great. But why do we see almost a $1 billion increase in the Social Services budget? I'm not saying that's all fraud, but a socialist government will encourage that type of dependency on social assistance. Creating an economic climate that will encourage investment is the way to get people off of social assistance and back to work.

I assume that part of the reason the minister got up in the House and talked about appointing a five-member task force to help the police and her other investigators look into welfare fraud has to do with the internal report that went from the AG's ministry to her ministry, which told the minister that there was an awful lot of fraud within her ministry. I hope that wasn't the only thing that made her decide to look into fraud in the Social Services ministry. Maybe it was because of pressures from the public, saying that there is fraud within the system and that we have to get it under control.

It's not an easy job. There are those who need assistance, and I certainly agree that we need a system in place to take care of those people and to help them get them back on their feet again. That's what the system was designed for. I hope that this new five-member panel, whoever it's made up of, will be able to work very closely with the police and the rest of her organization to try and quell the fraud within the ministry.

C. Serwa: Hon. Speaker, on a point of order with respect to ministerial statements. While ministerial statements are not contained within our book, nevertheless there are policies with respect to those statements. Taking a little over seven minutes for her statement, the minister far exceeded the content with a lot of platitudes and rhetoric rather than substance. The purpose of them is to describe to the Legislature new or altered policy. The hon. member of the official opposition also took an exceedingly long time.

In the book on parliamentary practice it does state that each of such statements should be brief, factual and specific. I would suggest that the minister be cognizant of this and that the responses be made accordingly.

The Speaker: On the point of order, the Minister of Finance.

Hon. G. Clark: If we were to restrict all comment in the House to substance and not rhetoric, then the opposition members would be silent all of the time.

The Speaker: I want to thank both members for their submissions on the point of order. While the Chair recognized that the minister's statement was perhaps longer than other ministerial statements, the Chair also notes that the response time was also proportionately longer. While there might have been some leeway given in the minister's statement, the Chair hopes that there was equal leeway given in the responses to the ministerial statement.

Orders of the Day

Hon. G. Clark: In Committee A, I call Ministry of Attorney General estimates, and in Committee B, I call the committee stage of Bill 3, the Build BC Act debate.

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BUILD BC ACT

(continued)

The House in committee on Bill 3; E. Barnes in the chair.

[2:45]

section 7.

Hon. G. Clark: I think the leader of the Liberal Party has been briefed by my staff, but the real question is whether moneys can be transferred from ministry votes to the special account. The answer is no, categorically.

Section 20(2) of the Financial Administration Act states: "No sum appropriated by a Supply Act shall be paid and applied to any purposes other than those described in the estimates of revenue and expenditure, or in excess of the amounts contained in the estimates of revenues and expenditure." Since the purpose of the vote description in a ministry does not or would not contain a provision to transfer moneys to the special account, such a transfer could not take place. The purpose of

section 7(

b) is actually to provide accountability to the Legislature. In order to increase the funding in the special account, a vote must come before and be debated by the Legislature.

F. Gingell: I'm a little confused, because when you go through the estimates and you get to page 220 regarding Build B.C., which deals with the $100 million, that's not part of a vote; it's a special account. Under what vote will the $100 million transfer be appropriated?

Hon. G. Clark: That's correct. In future years it will be a vote. That's what I tried to say. In this year, the $100 million is specified by legislation, which is the only way you can do it if you don't have a vote in the House. This $100 million is not part of the Supply Act. This is a special account by legislation. That's why this

section is here. In future years it will require a vote of the House.

F. Gingell: I guess that we have just been given official notification that the deficit budget for this year is not, in fact, $1.535 billion as the minister keeps saying; it's $1.635 billion.

Hon. G. Clark: No, absolutely not. It's part of the consolidated revenue fund. The special account is taken into account. The $100 million comes within the deficit number of $1.535 million.

F. Gingell: I appreciate that we haven't got to

section 8(2) yet, but perhaps this is an appropriate moment for you to explain that.

Hon. G. Clark: Can we leave it until

section 8?

F. Gingell: We can do it then, yes.

I take it then, from these explanations that we have now, that the only money that will be available to the Build B.C. special account for this year is $100 million. There's no other means by which money can be moved into the special account.

Hon. G. Clark: That's absolutely correct.

F. Gingell: All of the things that are dealt with in

section 2, "Purposes," are, I'm sure, greater than $100 million. So

section 2 and the Committee on Building British Columbia's Future will have what seems to be a much greater role in dealing with ministry expenditures and Crown expenditures than they will with the $100 million. After all, the $100 million is less than 1 percent of the total provincial budget.

Hon. G. Clark: It's been my experience that with virtually anything in government there is more demand than the resources applied to it, so you're quite correct that you could spend a lot more than $100 million on these projects. That's why we have the authority of the House to restrict and constrain. It means that the committee and Treasury Board, reviewing expenditures out of the special account, will have to apply a great deal of rigour and prioritization to the competing demands for this money.

But beyond this $100 million, the member is correct in saying that it also means, if the broad agenda of government is to promote training particularly and getting people off welfare and into work -- if that's not the number one priority, then it's a major priority of the government as envisioned in this act -- then any spending plans by other ministries.... The committee may want to review other initiatives to see if there are ways in which we can spend smarter and try to achieve these goals of training and the like in all areas of government.

Realistically speaking, there are four components of this bill. We've talked about them. That will occupy the committee's time, I'm sure, for some time to come. The special account is $100 million for this fiscal year.

F. Gingell: I'm sure you recognize that we agree with the things you're trying to do. We just don't agree with the manner in which you're going about it. We're concerned about the creation of a new bureaucracy. We believe you should be encouraging ministers; you don't need to create another Crown committee for the purposes of doing it.

To state our case, I would like to move the amendment that stands in my name on the order paper, which purports to reduce the amount of the opening balance from $100 million to $1 million. This would cause you to ensure that all these good things that you believe in so strongly would be done within their own ministries and Crown corporations, and that they would be done in the various Crown agencies without creating an additional bureaucracy. I commend that amendment to you, and I hereby move it.

On the amendment.

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J. Weisgerber: To follow through on the intent of the

section as amended, I was under the very strong impression that the purpose of this whole bill, which indeed falls under this section, was to be able to borrow and capitalize.

The Chair: The matter you are introducing is appropriate under a later

section of the bill.

J. Weisgerber: Okay. I'll defer my comments until that time.

I was responding to a comment by the minister that the only money it would have available to it is the $100 million referred to in subsection (a). But without wanting to enter into a debate, obviously, if the corporation can borrow money, then it has available to it $100 million plus whatever it goes out and borrows.

Hon. G. Clark: Just briefly I'll try to explain it. We've had a lot of discussion on this. Any money borrowed by the Transportation Financing Authority will be done by the board of directors of that Transportation Financing Authority for the purposes of highway construction or the like, which will be determined by priorities of the Ministry of Highways. The Committee on Building British Columbia's Future will be establishing training criteria and other criteria which, working with that Crown corporation, they will apply to it.

The committee also has, in addition, $100 million in the consolidated revenue fund -- part of our fiscal plan -- which they will make recommendations on how to spend. This is totally separate and distinct from the Transportation Financing Authority.

J. Weisgerber: Fine. I wanted to make sure that there was no misunderstanding around the amount of money and the sources of revenue that were available to the corporation under this legislation.

Hon. G. Clark: It's not a corporation, it's a committee.

J. Weisgerber: Well then, perhaps I do require some further clarification. The minister says that we're not talking about $100 million being available to a corporation, the Build B.C. corporation. We're talking about $100 million being available to the committee to prioritize spending in line ministries. Is that what the minister is saying?

Hon. G. Clark: That's closer, yes. They are not going to actually spend the money, but they'll make recommendations to line ministries on spending the money. The Transportation Financing Authority this year has the authority to borrow $80 million for transportation initiatives. The role of the committee will, then, be simply to scrutinize the spending to see whether it's possible, without any incremental cost, to impose training and other criteria on that spending initiative.

J. Weisgerber: Fine. What I understand, then, is that we're setting up a form of contingency account, giving the committee the authority to recommend spending out of it, and that it's peripheral to the core issue around Build B.C.

Hon. G. Clark: It's not peripheral at all. It's the key component of Build B.C. in the way you've described it -- as a separate special account. Ministries can access or bid on or compete for it to achieve the purposes of this, which are, again, regional diversification, getting people off welfare and into work, training, apprenticeships and those kinds of things. Then the committee will adjudicate competing requests from ministries and, in fact, attempt to foster their own. But it is not a corporation. It's a committee which is composed of members of cabinet as well as members of the Legislature.

G. Wilson: Simply one comment. I think the minister would recognize that the amendment is beneficial, that we now have an opportunity to have a better system with respect to the allocation; also, that the question of expenditures from this special account, which we get into in the next section, would benefit by the amendment as it is proposed. So it's a perfectly sensible way to proceed.

Hon. G. Clark: If this amendment were to pass we could not do innovative new programs within the base budgets of ministries. We have tried to.... We will do some, and within existing plans....

Interjections.

Hon. G. Clark: The members are correct, but what the members are saying by this amendment is they are not in favour of any spending coming out of this special account this year. I understand that position. I disagree with it. This is incremental, targeted funding for regional diversification, for regional development, for getting people off welfare and into work, for dealing with training initiatives and education initiatives around the province, and for dealing with silviculture -- new programs, again, targeted to social assistance recipients. The members are saying they are opposed to that. That's fine. I'm glad it's on the record.

G. Wilson: I don't want to have the last word battered back and forth ad infinitum. I think what the minister misses saying is that.... Yes, that's true, you couldn't spend out of this account, but all of those programs that he's talking about can and should be done through line ministries. This opposition is not stopping expenditure on those innovative programs. What it's saying is: be innovative within line ministries. This amendment does that and allows for it.

Amendment negatived.

Section 7 approved.

section 8.

[ Page 5946 ]

F. Gingell: I have an amendment to propose.

[SECTION 8, subsection (1) to be amended to read:

Subject to the approval of the Legislative Assembly, and on the recommendation of the chair of the committee, money may be paid out of the special account for projects and initiatives that are consistent with the purpose of this Act including without limitation

(

a) community level capital projects,

(

b) employment and job training initiatives,

(

c) resource enhancement initiatives,

(

d) infrastructure initiatives, and

(

e) costs associated with the administration of the special account and committee.]

We are concerned about the reporting process involved here. We don't think the money is being voted in the normal course of events -- through a supply vote -- but is being created by this bill. We think it is important for all members of this Legislature, particularly those who live in the less urbanized areas, who are concerned about regional development.... We are trying to encourage you to create as much reporting process between the committee and this Legislature. After all, it is the legislators that are elected to be concerned about these issues.

The most practical and easiest way is to allow the Legislature, through a series of votes, to authorize these expenditures. When we deal with the estimates of the Ministry of Finance or the Ministry of Agriculture or any of the other ministries, we have the opportunity to get into very specific discussions about what those ministries' programs are. The intent in this amendment is to cause you and the committee to actually bring the proposals forward to this Legislature.

[3:00]

I appreciate that you're not going to have all the i's dotted and all the t's crossed, or the trees planted. But it would require you to have it thought out before you started off, rather than just saying: "Here's $100 million. We're going to put $17 million into this and $20 million into that, and we'll see what we'll do in the future with the other $63 million." You would bring it to the Legislature, get it approved in general terms, let us all understand what is going on, and proceed from there.

Hon. G. Clark: The member is actually arguing against some of the positions he has taken, and I'll explain why. The member said at the outset: "Why don't you just give more money to the line ministries to pursue these functions?" If we had done that, there would not be any legislative scrutiny -- as there isn't in the House. When members of the House approve a budget for a ministry, they don't approve, within that budget, how much is spent on micromanaging the funds. The members of the House don't decide on the allocation of resources within a budget; that's done by ministry management personnel and ministries, and you can question them.

The way this is designed gives more scrutiny to the House than the way you suggest, because now there are two approval mechanisms. The Build B.C. committee must approve expenditures from the account or recommend approvals. Then it goes to Treasury Board to be approved. By removing Treasury Board's approval and bringing it to the House, you're saying that every microdecision and any expenditure decision made has to be with approval of the House, and no ministry goes through that.

This gives better tests, because we've isolated it as a special account, and you can ask questions every year on just the details of that $100 million. If the Minister of Finance or Treasury Board gave another $20 million to the Ministry of Social Services -- so instead of being $2 billion, their budget was $20 million higher -- it would receive no extra scrutiny from members on the other side of the House. But now we've taken that out and put a specific fund in place, a special account that has to be approved by the House every year. Every year you can ask questions in the House of the minister responsible.

If operational expenditures from the special account had to come here every time for approval, it would hamstring the organization. It would be bureaucratic; it would not be functional. And furthermore, the Financial Administration Act requires Treasury Board approval before expenditures. So I say with respect that you're talking out of both sides, hon. members. If you want to do it by line ministries, then we could do it that way -- the member is correct to some extent -- but it would have less scrutiny than the way we have designed it, which requires legislative approval and questions in the House every year on this initiative.

F. Gingell: That's fascinating because if an expenditure can be made by a line ministry, it is in the vote and we have the opportunity to question those things, as we do every time. Now we can go into the estimates debate and get very specific answers about the way money's going to be spent. That's where the problem is when we ask questions in this particular case. There's $17 million going back to the small business forest enterprise program: there's going to be $20 million expended on the special silviculture program.

I understand you're going to spend quite a bit of money on a whole bunch of Build B.C. 21 signs -- the paint is dry; they are all ready and just waiting to go. I presume you're going to start one of the employment programs to have people go and dig holes to stick up all these wonderful signs. That's probably what the announcement is about -- you want to make them. Well, we're not able to get any answers about the remaining $63 million, and....

C. Tanner: It's a pig in a poke.

F. Gingell: A pig in a poke -- thank you. So some other process that does allow us to have a much better feel for the way government's going to spend the taxpayers' money would be better.

C. Tanner: The minister just made reference to the Financial Administration Act, and in this very

section that he's talking about, he's overriding the Financial Administration Act. The

section he's overriding says: "Where a supply act and another act each contain an appropriation of the same purpose, no money should be paid out...."

[ Page 5947 ]

Interjection.

C. Tanner: Well, it's appropriate to what the minister is saying. He justifies what he's doing by saying that there's a better perusal of the accounting in another place. But that's not true. You won't tell us what you're spending the $63 million on. You've gone to a lot of trouble to override the Financial Administration Act -- written to protect the public's funds -- and that's the only way you can get this new bill into place.

Hon. G. Clark: Well, I don't mind dealing with

section 8(2) as well, although it's not quite on the amendment, but we could do it all at once.

Section 8(2) is essentially a technical amendment that does not exempt this special account from the Financial Administration Act at all. It is exempted from one section, and I'll explain why. Technically now, under the Financial Administration Act, you cannot spend money out of a special account until you've exhausted your supply for a program that may be of similar purpose. It means that we could not do a silviculture initiative out of this special account until we'd exhausted all of our silviculture budget in the Ministry of Forests.

Even though it's quite a differently designed program, etc., it has the same generic terms. Technically speaking, we needed an amendment to allow us to spend from the special account coincident with spending in ministry areas under the supply act. So it's really a technical amendment.

C. Tanner: I appreciate what the minister said, and I understand why he's doing it, but I don't like that. In fact, if you were following normal practice and not working with this special bill and special funding source, we wouldn't have this problem; you wouldn't have to override the Financial Administration Act. The Financial Administration Act protects the members of this Legislature, particularly on this side of the House, from the very thing that you're doing. They don't want you to take any money out of this plan until you spend it out of that plan.

What concerns me and the members on this side is that you have to override something as important as the Financial Administration Act to do what you want to do.

G. Wilson: Once again, what we're trying to emphasize here -- and I think it's perfectly rational -- is that we should have a greater degree of accountability. What we're attempting to do in terms of this bill is make sure there is not an opportunity to do an end run around expenditures of taxpayers' dollars without thorough and proper scrutiny by elected members.

The fact that it doesn't happen that way in other ministries or other jurisdictions through different acts is no reason why we should not commence to move in that direction as we now develop this specialized committee to review, direct, reform and -- to use the minister's words -- spend more wisely. Time will tell what wisdom there is in these expenditures. But if that's the general thrust of this bill, one of the ways they might make it more palatable to the Liberal opposition would be to allow this amendment to pass.

That would allow the opportunity -- whether it would be exercised to the nth degree, which the minister says we're going to do.... Who knows? We may. But if we allow, through that amendment, the opportunity for us to have greater scrutiny over expenditures, that would make this bill more palatable and easier to accept, given the newness of the concept and the fear that this Build B.C. special account may -- through topping up, through new allocations in new budget years -- simply become a vehicle for the expenditure of greater and greater amounts of social capital without proper scrutiny.

That's what this is all about, and it seems to me it's a perfectly sensible way to proceed.

Hon. G. Clark: We're opposed to the amendment. But let me try to reassure members opposite that this enhances accountability; it does not detract from it. We have put in a special account -- separate and distinct, aside from all the ministry budgets -- which has to have approval every year in the House. Every year, unlike trying to deal with the apprenticeship program in different ministries, it will be singled out for special treatment in the House. The minister is accountable in the House, and you can ask for justification for every single expenditure made over the previous year and expenditure approved for future years. I think it enhances accountability; it does not detract from it.

[3:15]

Amendment negatived on the following division:

YEAS -- 18

Chisholm

Reid

Gingell

Dalton

Farrell-Collins

Wilson

Stephens

Hanson

Serwa

Tyabji

K. Jones

Jarvis

Anderson

Warnke

Tanner

Symons

Neufeld

d e Jong

NAYS -- 33

Petter

Marzari

Boone

Edwards

Cashore

Barlee

Jackson

Beattie

Schreck

Lortie

Hammell

Giesbrecht

Smallwood

Gabelmann

Clark

Zirnhelt

MacPhail

B. Jones

Copping

Lovick

Ramsey

Pullinger

Evans

Dosanjh

Hartley

Streifel

Lord

Krog

Randall

Kasper

Simpson

Brewin

Janssen

D. Symons: The vote we've just taken amazes me, because there seems to be such great inconsistency on the part of government members in changing their minds on things they stood for so strongly when they discussed the Freedom to Move initiative in this House in 1990. On July 16 of that year the member for Nanaimo said: "It went through Treasury Board, to be sure, but then by what avenue were members of this Legislature informed? When did they vote on that appropriation? As we all know, it's absolutely crucial that at some point this chamber approve those

[ Page 5948 ]

expenditures." The member said that in 1990. That is precisely what we just voted on, but apparently he voted the other way now. There seems to be a great deal of hypocrisy or something in here. Something has changed immensely, and I should hope that it's more than simply moving from this side to the other side of the House that brings this about. I think that's a great deal of the opposition's concern about this particular portion of the bill. It's the part of the bill concerned with accountability.

It's the part of the bill where we feel that legislative authority has been circumvented and they're doing an end run around it as a means of who knows what. So I think it's extremely important that that member's words from 1990 ring in the House today, because indeed they're relevant to today's debate.

He went on further to say: "The problem, however, is that we're worried that this particular measure might enable some funding to be used for highway construction purposes that doesn't really get subjected to the same scrutiny of the Legislature as is normally the case." Again, hon. Chairperson, that is precisely what our problem is.

The bill here sets out various ways that things are going to be funded, various expenditures that can be made, but the one thing lacking is where somebody other than this small group of people within cabinet and Treasury Board, or a select group appointed by that committee, will have an opportunity to see exactly what is going on before the fact. Usually when we're debating in this House, we get some inkling of what's going on, some inkling of what the expenditures are going to be beforehand. This seems to remove that from us.

I don't see anywhere in the bill where that will be the case, where those concerns that were raised before are being addressed.

There's one further comment on that same date from that same member for Nanaimo: "We have difficulty then with this particular measure, because it looks as if what we're giving the ministry is something like a blank cheque to spend hundreds of millions of dollars without detailed legislative scrutiny. I hope I'm wrong, but I'm not convinced that I am wrong." I could not word it any better than the member for Nanaimo did. I ask the minister to respond to his words of three years ago. If that was the position then, tell us where you've now addressed those concerns in this bill.

Hon. G. Clark: I'm delighted to tell the member the principal difference. The difference was that when we were in opposition, we supported the Freedom to Move special account. You'd do well, members of the opposition, to learn from that, because that was a major government initiative to pursue highway construction in the province, and we supported it. We moved an amendment because we wanted in on it; we wanted to be part of it. That's not what's happening here. Members of the opposition are opposed to this initiative.

They're opposed to this initiative to promote diversification and to get people off welfare and into work. They're moving amendments to try to obstruct the purpose and the objectives of this special account. That, my friends, is the distinction between what the member for Nanaimo was saying about the special account a few years ago and what the members are saying today.

D. Symons: I thank the member very much, hon. Chair, for that answer. I think it's a revision of history, however, in the way he's giving it. Indeed, what happened back then was that the government accepted some of the recommendations you made in amendments and therefore it became acceptable to you. Up to that point, as I read Hansard, the opposition at that time was apparently very much against the bill because it had some pitfalls in it. In their wisdom, the government of that day changed the bill to cover over those problems. We are not against, as you say, creating jobs in this province; we're for it.

We're not against the initiative that this bill enables; we're for it. But we're also for having due legislative process and accountability. Those are the very things that are missing in this bill, and they're the very things your members, when in opposition, were criticizing the previous government about. But that government, in its wisdom, made the appropriate changes, and it became acceptable.

I will throw the same challenge out to you. If that is the only problem and if I'm wrong about what you were saying to us a moment ago, then I'm assuming you will make the appropriate changes here so that it will be acceptable. Then we will come on board and support it. If you don't believe that, all you have to do is test us.

You're saying that we have a problem with this because we're against it; I'm telling you that we're for it. In order for us to be for it, you have to make it responsible to the Legislative Assembly, in the same way that you were asking for changes to be made in the Freedom to Move legislation. Make the parallel changes to this, which were made for that program, and we will jump on board with you. I give that to you. Could you respond to that?

Hon. G. Clark: This is typical of the Liberal Party: process over substance every time. Let's have a big, arcane debate about some technical changes, and then they will support the bill. They got up and filibustered second reading. They all opposed the substance of the bill. Now the member says if we make this technical change to give the Legislative Assembly what he says is more accountability -- but which will, in fact, frustrate the intent of the bill and make it inoperable -- then they will support it. The reason they won't be elected is that they spend all of their time dealing with process, not substance.

People want to get on with the job. They want to get people off welfare and into work, they want diversification in the regions, they want highway construction and capital spending, and they want governments to spend in a smarter way. Getting involved in hours of debate on minor technical changes, I submit, is what the public doesn't want. They want us to get on with the job.

D. Symons: I would like to draw it to the member's attention that if he cares to refer back to Hansard, he will see that what we were objecting to in second reading was simply the procedures. You will find that we were

[ Page 5949 ]

not objecting to job creation, as he is saying. We were objecting to the secrecy and non-conformance in bringing things before the House. We were objecting to the very things you objected to in legislation brought in by the previous administration with regard to the Freedom to Move program, and nothing more.

L. Hanson: I suspect that because the minister made the remark about the next election, this bill might be a millstone around their neck in that election. Talking about

section 8, which I guess is what we're still on, maybe the minister could give us some indication of what sorts of things he's thinking about when he talks about community-level capital projects and infra-structure initiatives.

Hon. G. Clark: The expenditures are not limited to the examples given. Those are given largely for illustrative purposes. Community capital projects would be things like sewer and water lines. I think that those would qualify. Small capital projects, such as community centres and the like, would possibly qualify. That would be something we would have to review, but that's just to give you a sense of what we're talking about.

In terms of infrastructure construction, again, as you know, we are providing for highway construction in a different

section of the act. But it may be that some spending around some of the highway infrastructure would be worthwhile if it met the purposes of the bill.

[3:30]

L. Hanson: Obviously there is a fairly in-depth program already in place. The next question that comes from that is: would infrastructure initiatives such as sewer and water, or even community projects, be done through the Ministry of Municipal Affairs, but funds would be allocated out of this fund to assist with that? Does that mean there is some relationship to the municipal revenue-sharing program?

Hon. G. Clark: The municipal revenue-sharing program continues apace. The municipal revenue-sharing fund allocations are in the budget, and they are up for debate and discussion in the estimates. But what we want this bill to do is to allow incremental funding in those areas that fit some of the other priorities we're trying to accomplish with respect to some project.

It's fair to say that sewer and water programs have their own funding source. It's like all ministries of government: the list of demands is much longer than the funding that's allocated. I wouldn't see this as a major supplement to that, but there may be some cases where you could in fact enhance some of the funding from the municipal revenue-sharing fund, if it met some other criteria of the government.

L. Hanson: This is the final question I have. There was a program in British Columbia called GO B.C., which helped some of the capital projects in communities, as well as other things. Would the minister suggest that this might be similar to that? Or will it, in effect, take part of the place of that cancelled program?

Hon. G. Clark: I would say that's not precluded from this bill.

R. Neufeld: I want to continue that questioning a little bit further. I find it interesting that the Minister of Finance talks about water and sewer lines, and little increments here and there, and it's going to help more. Obviously this bill is more far-reaching than a lot of us understood at the start. I guess that's probably why we argued against it so much in second reading.

Could you just explain for me a little more, other than just water and sewer lines, what projects at the community level would be eligible for this?

Hon. G. Clark: We tried to put forward some broad categories, and we'll review submissions from the ministries to see whether they meet those. We didn't want to limit it, but we wanted to give it some sense. I think small capital community facilities, for example, would be most likely to meet that, as long as they met some of the other parts of the purposes. Those would be likely areas we might look to.

We want to make sure we're getting levered dollars, if we can, and matched funding with communities and the private sector, particularly when we look at some of the regional problems like structural unemployment and the like. There may be a good case from time to time for not only schools and hospitals but also other community facilities that the municipal government might be pursuing. That's not well developed, but this bill is permissive in that regard.

R. Neufeld: That's interesting. I think about the GO B.C. program that was in place through lotteries and how a lot of those little programs took place in communities. I was in some communities where they helped very much. I wonder if the minister thinks that getting a Crown corporation in place -- which is not cost-effective but actually is going to cost a lot of money to initiate these types of things -- is more cost-effective than going through the lottery, as we did with GO B.C.

Hon. G. Clark: All members of the Social Credit Party seem to be under some misapprehension. With the greatest of respect, you should read the bill. I hate to repeat again that this has nothing to do with the Crown corporation. There's $100 million in a special account. There was a Lottery Fund special account -- you're correct. Now there's a committee which can adjudicate some spending out of that account. That has nothing to do with the Crown corporation.

R. Neufeld: Excuse me, you're right, it's later in the bill.

Can you explain what type of resource enhancement initiatives you have in mind?

Hon. G. Clark: The one we've already mentioned is a major silviculture initiative that is targeted towards social assistance recipients, as an example.

[ Page 5950 ]

R. Neufeld: If it's only silviculture, can the minister tell me why you wouldn't do that specifically out of the Ministry of Forests? Their revenues are up dramatically.

Interjection.

R. Neufeld: Well, you're going to get more questions on it.

H. De Jong: I know the minister has indicated that it may apply to some similar programs as provided by the Ministry of Municipal Affairs in various communities in terms of the sharing, but he hasn't really said whether the same type of sharing will be required under these capital projects versus those that are already in place under the Municipal Affairs department. Perhaps the minister will elaborate on that in terms of water and sewer lines, and also road sharing. The Ministry of Municipal Affairs has, over the last number of years, shared in certain local road projects with municipalities, particularly those of high growth.

Hon. G. Clark: I want to be very careful here not to raise expectations. There is a municipal sharing fund that the ministry deals with. They have lots of requests, which they prioritize, and a lot of money is spent by senior governments.

This small

section of the bill is permissive, to allow the Building B.C.'s Future committee, if they wish, to perhaps augment some funding in certain communities if they met other criteria that we wanted to pursue. If we tried to accommodate all of the sewer and water requests of every municipality in the government, it would be in the billions of dollars -- not that a lot of it isn't required in the long run, but they are big, big numbers.

This is one part of a bill. We wanted to give an example, for illustrative purposes, of things we would be looking at. We want to give the option to the ministry to apply for augmenting funds if they have some innovative ways to create jobs. It should not be confused in any way as a sewer and water program or a major initiative in this regard. It simply gives more flexibility to try to augment.... Again, when we're looking for a better bang for the buck and for matching dollars, I think municipalities may have ideas in their community, and we want to make sure that the bill allows us to match funding in some areas if it meets the kinds of criteria in

section 2 of the bill.

H. De Jong: I think the statement on community level capital projects is somewhat misleading. Having listened to the answer very closely, it seems to me that it's more a job creation type of project. Am I correct in assuming that?

Hon. G. Clark: Obviously, training and employment initiatives are important, but it's also important that we build the capital infrastructure of the province. That's why most of the funding is in the capital area. But we do that anyway as government, and we're trying to do it smarter by using the money, even if it's community facilities and the like, to lever more training opportunities and more opportunities for social assistance recipients to get work, training and the like. That's the whole purpose of this initiative.

H. De Jong: On these capital projects, then, is the level of required local participation in terms of dollars on any given project going to be similar for every community, or is it going to be different from one community to another?

Hon. G. Clark: That's a reasonable question. In other words, we wouldn't want to set something up here that would be a better percentage of provincial funding to disadvantage other communities. It will not happen, and it's not intended. The revenue-sharing fund will be the major source. If there's any augmentation of that for a particular purpose, then we'll look through it. The criteria have not been established yet, but we'll look very carefully to make sure there's equity across the board. That's a legitimate concern for members, and I'll take that on advisement and try to give you some assurance that that won't happen.

G. Wilson: Specifically with respect to the question just raised, one of the points I would like to have clarified is whether or not, in terms of infrastructure initiatives.... If we're talking about community level capital projects, there are some projects that are relatively small in scope and are often contracted by local contractors, or often available for short-term employment opportunities. Some of those are currently financed under MFA through local government financing. Does the minister envisage the same kinds of employment criteria applied to municipalities?

Is it likely to have an application to municipalities under MFA, if there's to be a matching dollar from the provincial government?

Hon. G. Clark: I don't think so. The focus of this is not municipal spending, but rather provincial. As you can see by my remarks, at this time we have not contemplated saying that matching dollars from the province -- or 25-cent dollars from the province or whatever -- are going to impose all kinds of training restrictions on them, if that's what you're saying. It's fair to say, as we work through it over the next few years, that we'll try to build on some success and see if we can work with municipal governments on that.

It's not really contemplated at this time, and I don't think we're planning on it, but it would be consistent with the thrust of what we're doing. If we are doing it, we would want to make sure municipal government was supportive of it.

We want to be careful that in some remote communities, for example, where there is a contract that's been worked there all the time.... It's not applicable to have a Victoria fiat that's going to apply across the province. That would not be likely. We want to work with municipal governments -- tailor them. It may be that there are things we can do better, but

[ Page 5951 ]

they're not going to all be perfect projects that meet all of our criteria. We are not intending at this time to look at municipal spending and try to impose those restrictions on them.

G. Wilson: By the same token, one of the larger areas of capital expenditure that is going to be imposed at the municipal level -- although much of it will presumably be provincial in source -- is in waste management projects and in management of certain projects that are underway to try to alleviate things like landfills. Those projects that are capitally financed principally out of provincial revenue could be subjected through this special account for that kind of training.

If that's so, given that there is a fairly competitive market out there for people who want to get into that field -- because it's potentially a very lucrative field, as anyone who has studied it would know -- was that one of the projects that was envisaged in this particular special account? I know there are a number of applications underway by many groups who would probably fall within the categories outlined under the purposes of this act.

Hon. G. Clark: Not in the special account. We're talking about the special account here, and I don't see that as a source of funding for landfill sites or those kinds of capital projects. I suppose you're right. The bill would permit that, I suppose, if they were to meet some criteria. But I think that's more properly handled by municipalities and by the municipal revenue-sharing fund through the Ministry of Municipal Affairs. I don't think that's contemplated. We have the special account and other capital projects, and I think it's fair to say that we may be looking at other criteria for government spending.

[3:45]

We want to be working with the stakeholders, and in this case the municipal governments. It would be key to see whether it made any sense or not. If you look at the description of what we've got in this bill, we've got lots to do, and I think we'd want to build on that later on.

G. Wilson: On (e), "...costs associated with the administration of the special account and committee," is there any kind of figure on what we're looking at, given that "without limitation" is in the

preamble to (e), under

section 8(1)?

Hon. G. Clark: I've just checked. We don't have a formal budget for that yet, because we're just getting the program up and running, but it will be a modest -- very modest -- initiative. In fact, as you can see, staff in the House today are all seconded from existing organizations. Although Ms. Doyle will be full-time on the project, she is already assistant deputy minister in Housing, and the staff here are from the Ministry of Finance. There will not be a huge administrative burden attached to this kind of coordinated activity, but we don't have the absolute numbers. Next year I could commit to give you some detailed breakdown.

G. Wilson: My last question on this is with respect to those administrative costs. Is there a ballpark figure or percentage base of dollars that have been seconded into this account, given that a silviculture initiative has to be administered, reviewed and overseen somehow, either by Ministry of Forests staff or somebody somewhere, and that we are also talking about potentially complex capital community projects that are going to have to be accounted for? We know what happened to GO B.C. money when there wasn't adequate administration, accounting and scrutiny.

Where is the cost going to be borne in terms of assessment, review and audit? Will that money come out of here, or will it come out of the Ministry of Finance?

Hon. G. Clark: I guess maybe there's some advantage to being the chair of Treasury Board as well as the chair of this. The Ministry of Forests will be administering the incremental spending. We will not be duplicating Ministry of Forests' staff. The program delivery is in the ministries. For the monitoring of it, we'll be using largely existing resources. To give you an example, the Crown corporations secretariat -- as we said yesterday -- will be monitoring the Crown's capital spending based on the criteria set by this committee.

Similarly, if the Ministry of Forests is successful in convincing the Building B.C.'s Future committee to spend, then they'll be required to administer it, again. So there would be some modest -- you're right -- monitoring, but it will largely, if not totally, be absorbed by the ministries or by other central agencies like Treasury Board, Crown Corporations Committee of cabinet, secretariat, etc. So we don't anticipate a huge amount of that. We in Treasury Board -- just for members' interest -- have a new position for reviewing capital spending, for example.

That's in our budget and we're trying to do that very diligently. So this is essentially a screen or another criterion with which you'll be reviewing capital spending.

Section 8 approved on division.

section 9.

G. Wilson: I guess of all the weird and wonderful components of this bill, which reads a little bit like a Lewis Carroll novel, where you don't know exactly what strange event you're about to....

Interjection.

G. Wilson: The minister suggests that's the Liberal Party. I would suggest it's this legislation. Clearly we're now looking at a B.C. Transportation Financing Authority, and we can see that under

section 9 it creates a board, a director, a minister and, effectively, a new Crown agency, which I think the minister would agree by any other definition is a Crown corporation. Would the minister, under

section 9 -- because there is really not much to debate or discuss in terms of the definition of who's going to be on this -- tell us why he feels that under

section 9 the creation of a financing authority is

[ Page 5952 ]

necessary given that the Minister of Transportation and Highways will effectively be able to hand appoint or handpick a board -- which we on this side of the House would call patronage -- so that a group of five, if we can put it that way, can now start to direct financing and capital funding? Why is it that the minister doesn't have adequate staff from within the Ministry of Transportation and Highways, many of whom have years of service and a great deal of knowledge under different administrations as to what works and what doesn't?

Why is it that we have to have a Transportation Financing Authority that gives the minister these new powers under this new Crown corporation? What's the purpose of that?

Hon. G. Clark: The purpose is largely technical. When the decision is made to capitalize highway spending -- the same way we do schools and hospitals -- it requires the creation of an agency to hold the property for the purposes of borrowing money against that property and paying it off over time, in this case with dedicated revenue. The creation of a financing authority or Crown corporation is required for accounting and other purposes. What we've done here, however, is not to create a new Crown corporation without any strings attached.

You'll see through the act we put lots of control mechanisms on it, so it's not necessarily a Crown corporation like other Crown corporations. It's more like a financing authority, although for the purposes of holding property, etc. it has to have a board of directors and essentially many boiler-plate provisions. That's the main purpose of it.

It may have some staff attached to it -- likely seconded from the Ministry of Transportation and Highways -- for the purpose of pursuing that financing vehicle. That's not uncommon when we do hospitals and schools or for strategic planning purposes and the like. But I want to assure the members that this is largely a vehicle -- excuse the pun -- to capitalize highways, which is a source of legitimate public policy debate. We don't want to get off on the tangent that this is somehow a super Crown corporation that's going to be like B.C. Hydro.

This is largely a transportation financing authority similar to that for schools and hospitals, with all board appointments required, and it will have the opportunity for some strategic planning focus if the Minister of Transportation and Highways chooses. The fact that the minister is the chair should, I think, give some comfort that it's really an arm of the Ministry of Highways, as opposed to anything broader than that.

G. Wilson: I think this business of capitalizing highway construction is indeed a valid point for debate. It is something I have not spoken in opposition to. I think there are some capital projects that are properly financed over long term, that do have built into them a certain amortization period to finance the project from start to completion, which currently doesn't happen. I think anybody that's meandered along the goat trail from Gibsons to Powell River will know that there are sections of unfinished highway that have been sitting there for years because of this problem of being able to finance from start to finish.

Having said that, however, I don't think the minister has clearly told us why he has to do it through this particular model. In terms of what this authority will be able to do in the acquisition and holding of property, the Crown can do that now. I would argue the Crown has the capacity to borrow on behalf of the taxpayers through a financing authority under the Ministry of Finance to develop long-term capital financing.

We would argue -- and I've put this forward many times before -- that what's needed is a single spending authority created on an exchequer model which would allow all of that to be under the Ministry of Finance, subject to the full scrutiny and audit of this House, rather than putting it into a Crown agency that's separate from government, or at least at arm's length from government in terms of the proposition of this bill. That's where I have some real philosophical problems with what's being proposed here. I know that we've debated this at second reading, and we don't want to do that philosophical debate....

I think it's an important discussion, because we're going to be saddled with this. I can say with great sincerity that when the Liberals take over government, we're going to have to deal with this thing, and we want to know why we're putting it in place under this model. Why wouldn't you incorporate it through the Ministry of Finance under an exchequer model, which is an agency with the same kind of powers to acquire, hold and borrow against that for long-term financing? It's two quite different ways of going about it.

The Chair: Before I recognize the minister, I think your point about not wanting to stray too far from the rules by which we're bound in committee is well taken.

Section 9 is really a very limited

section with respect to the matters that you've just spoken of. There is a

section that deals with the borrowing of the authority, which can be dealt with at a later point. I would ask that we try to stick strictly with the sections as we go through.

Section 9 approved.

section 10.

G. Wilson: I had hoped that the bait I threw out would have been titillating enough to get the minister on his feet to discuss it, because it doesn't matter whether we discuss it under

section 9, 10 or 11, or under

section 12, which is the borrowing capacity.

I know that the minister is anxious to get out and play ball, and we're going to play ball. We're going to try to get this bill looked after, but I think it's important that we're thorough and that we get a full hearing on this.

Hon. G. Clark: The chancellor of the exchequer idea is, in fact, very close to what we have in B.C., as opposed to other provinces that have revenue -- maybe, you could argue, increasingly so, given that I'm now the chair of Treasury Board, the Crown

[ Page 5953 ]

corporations secretariat and this committee. I can assure you that in the Transportation Financing Authority all borrowing has to be approved by Treasury Board, which is a central agency, and the spending from it has to be approved by a central agency and now reviewed as well by the B.C. 21 committee. So there is very tight scrutiny.

There are two reasons for the financing authority model. One is because it allows us to capitalize spending. The second reason that it's superior to the exchequer model is because we have dedicated revenue to it. This Transportation Financing Authority cannot spend or borrow more money than it has resources available to it for financing. One of the problems in government is that if I, as Minister of Finance, raise the gasoline tax, right now it goes into general revenue, and every year the ministries compete for access to the revenue that's generated from it.

What Treasury Board does all the time is weigh whether we should fund this program or that program, and thousands of very worthwhile initiatives don't get funded.

When I went around the province, people said: "We want more user pay. We don't mind capitalizing highways, and we don't mind paying more in gas tax if it goes to the highways." By putting it at arm's length in a financing authority and dedicating revenue to it, it is no longer possible to subvert it and take the money in-house for other purposes. You can now capitalize over 20 years -- or over the life of the project, as the member opposite said -- and you have revenue that goes to pay for it.

You smooth out the booms and busts of highway construction that we've seen in this province, largely following the electoral cycle, and you now have a financing vehicle with dedicated revenue. It cannot spend unless it's approved by Treasury Board; it cannot borrow unless it's approved by Treasury Board; and by legislation it cannot do either unless it has resources dedicated to it and available to pay for it.

[4:00]

I think that gives a much better measure of control. Members of the Social Credit Party made the point that capitalizing can be seductive because you can go faster. You have to be very careful. In this bill, we've tried to build in all kinds of safeguards to make sure that that doesn't happen. I think the public can take some comfort from that. I think it's good public policy. It's amortized over the time period. You have to pay back the debt, not just the interest costs. It's dedicated revenue from user pay -- in other words, from gasoline taxes.

All the scrutiny doesn't necessarily apply to all other Crowns, where it's really tight in terms of their borrowing authority and spending authority, which is controlled by Treasury Board.

G. Wilson: When he suggests there is a very tight limit to what can be borrowed, because it is tied to your capacity to cover or essentially to secure that money, what the minister fails to elaborate is that there is an open-ended portion in terms of revenue collection through taxation which is a functioning part of this bill. We've got a 1-cent-per-litre tax coming into this. We've got other ways under this bill to amend the social services act, the tax act on rental cars and all that kind of stuff.

It's like in a speech from last night, or maybe it was yesterday morning, where somebody said: "I always balanced the budget." Well, I know some municipal authorities have to balance the budget because the law requires them to. How do they do it? They do it by having the highest increase in taxation in the province. That's the way they do it. We've seen that, and it gives me certain fears because we're likely to see that kind of a proposition here.

The comment made by, I think, the Leader of the Third Party was right on target. He suggested that when you get into capital financing the tendency is to want to do more than you can in fact afford. As a result, you tend to project revenues that don't materialize, locking you into a need to increase taxes. That's the big problem here. I think that would be alleviated under the exchequer model because you couldn't spend it until you had a reasonable assurance of having it in the bag. That's a difference we don't want to get into here. Because it's a philosophical question, I will be ruled out of order. I see that the Chair is getting impatient.

So let me come back specifically to 10(1) and ask: why four members? Why is it modeled with only four hand-picked members to have the authority to involve themselves in the kinds of things we'll deal with under 12? Why not have a board? If you simply want to have an arm of the Ministry of Transportation and Highways, why not establish a small board of directors that might also be a link or a tie to the elected members of this assembly?

Hon. G. Clark: Nothing precludes the Lieutenant-Governor-in-Council from appointing four Members of the Legislative Assembly as board members. Currently the hospital financing authority has, I believe, on its board the Minister of Health, the Minister of Finance, and, I think, the Deputy Ministry of Health and the Deputy Minister of Finance. There are four board members for that financing authority. That may or may not be the decision made on this authority. That option is available to the government.

So I wouldn't say there isn't a connection to members of the Legislature. There certainly is. Unlike any other Crown -- there is no other Crown that a minister sits on, right now -- this Crown financing authority has the Minister of Transportation as the chair of the board.

G. Wilson: I take the minister's point. Not only does it have the Minister of Transportation as the chair of the board, my understanding from earlier comments is that it has the Minister of Finance sitting on it.

Interjection.

G. Wilson: Oh, it's not decided yet. Earlier comments, I think it was some kind of sign language, made me think that he was going to be on this board. Given that, can the minister give us some kind of assurance that it isn't simply a vehicle for patronage appointments, or the appointment of individuals who

[ Page 5954 ]

may have been in one Crown corporation but find themselves unemployed and looking a job in another Crown corporation?

Hon. G. Clark: Certainly I can do that. This is a permissive

section which allows four people to be appointed in addition to the Minister of Highways. There may be a case for a qualified private sector person who has some expertise in transportation planning or something; I'm not sure. It would give members a lot of comfort to know that they will not be patronage vehicles to simply hire people on the basis of their politics. This is a legitimate exercise, and you'll find out in due course who the board members are. I'm sure that members opposite will be more than pleased with the quality of the appointments.

I understand that Mr. Gordon Gibson has given his resignation to the board of B.C. Trade Corporation, which I'm disappointed with. Maybe we can see if he's interested in sitting on this corporation.

G. Wilson: I'm not going to touch that one with a corporate seal.

I have one very simple last question on this. In terms of the interaction of this particular board with the previous committee, is it intended that these committees are going to work in tandem with respect to the allocation and development of the projects that are put in place? I think we need to be very clear on that in this section.

Hon. G. Clark: I think it's too much to say "in tandem." This board will largely be making transportation decisions, and the committee will be reviewing those decisions to see if there are ways in which they can meet the other criteria we've talked about -- regional economic development, training, and the like. Yes, they complement each other; yes, it's part of the same initiative. But they really have very distinctive roles.

L. Hanson: I suppose there's a certain amount of latitude, because the minister's responses haven't really dealt narrowly in the different sections of the bill.

Interjection.

L. Hanson: Who knows?

I know this was raised a number of times in second reading debate, but now we have the minister here to actually answer the question. Nothing in

section 10 that creates the board under this Crown corporation -- and also none of the funding designation, or at least the capturing of that funding under a certain account -- could not have been done under legislation, if that was the desire. I haven't heard a good reason why we need to create this board under a Crown corporation.

Hon. G. Clark: I thought I had explained that in great detail. I'll try not to do it too much again.

In order to capitalize highway spending, it requires the creation of a financing authority or Crown corporation, because it has to hold real property in order to borrow money against it, to pay it off over time.

Secondly, in order to dedicate revenue directly to the servicing of the debt, including paying back principal, it requires a separate arm's-length relationship. So we couldn't capitalize. If you wanted to have general revenue go to this, that could be done. But people have told me over and over again -- and I believe it to be true -- that they want to see the link between paying taxes on gasoline to road construction. This linkage can only be possible with a Crown-corporation-type vehicle, at least if you're coupling it with capitalizing highways, so that's the vehicle for doing it.

It's not a super Crown corporation; it's a vehicle for dedicating the revenue and for capitalizing the cost of it.

L. Hanson: If I understand the minister correctly, he is suggesting that other than dedicated revenue such as gasoline tax or highway tolls and so on, there will not be a contribution out of general revenue to this Crown corporation for the repayment of financing of highways.

Hon. G. Clark: The member is absolutely correct. General revenue is not going to pay debt servicing attached to this. It cannot borrow money. It cannot spend more than the revenue it has at its disposal to pay for the cost of it. That's important for members to know. We did it deliberately to constrain the ability, because I, too, as Minister of Finance, am concerned about this question.

I want to make sure that there is pressure and accountability and that it requires them to go through a lot more hoops before they can spend money: Treasury Board approval for their business plan, and for any borrowing or spending; approval, or at least a review, by the Committee on Building British Columbia's Future, for spending initiatives; they can't borrow more money than they have in revenue sources; and they have revenue sources dedicated in the act directly to the financing authority. So we've tied this up very tightly in order to escape any of the possible problems with respect to capitalization.

L. Hanson: I haven't really seen it here, but maybe the minister could give us some indication as to where in this act there is a restraint on the specific revenues that could be dedicated to it. You talk about a gasoline tax and tolls on highways. Why not 50 percent of the social services tax? Why not some other tax?

Hon. G. Clark: That's true. We'd have to change the act to do that. The act we're passing today has specific revenues attached to it. But at some future date, if we're running a surplus budget, for example, we may want to take some of the tax sources that are there rather than.... One might want to cut taxes, and that would be my preference. But if you didn't want to do that, you might dedicate revenue to this financing authority. I think it is true that at some point the financing authority for building roads and the like may require more revenue. That's legitimate, once this source of funding is used up. Obviously we don't have

[ Page 5955 ]

to do that. They can pay down debt, and eventually they'll have more revenue to build more roads.

A future government may want to either take existing tax revenue, amend the act to flow it in and again increase the spending, or it may want to raise another tax and dedicate it towards that. That's a prerogative of a future government. It's not contemplated. It's not going to be required, in my view. This act is very clear about what revenue we're dedicating to it. But a future government could clearly amend the act to add sources of revenue.

L. Hanson: I think I understand all of that. If I were to take a literal

interpretation of just about every clause in the bill.... They are always followed by something such as we see

section 11 -- and I'm not asking a question on this; I'm just using it as an example -- "...and to do such other things as the Lieutenant Governor in Council may authorize." Is the minister telling me then that the only funds that could be dedicated to this now, according to this act -- without any flexibility or change in the act -- are the gas taxes and tolls from highways?

Hon. G. Clark: Yes, that's correct, except I'm advised that a government could, by a vote of the House, dedicate further revenue to the Transportation Financing Authority. That's clearly not contemplated. It isn't in the act, and it isn't what we want. But technically a government could, for example, raise a tax and, by way of a statute, dedicate further revenue to this vehicle -- essentially amending this act by bringing in another act to amend it. That's not uncommon. But that's not contemplated, and it's not in this bill.

L. Hanson: I would just point out to the minister that Treasury Board and the other boards that he suggested are totally under the control of the government. I'm not sure that the same opportunity is there to scrutinize those various issues, as it would be with all of us who have been elected. I think there's a huge difference there.

[4:15]

As I understand this act and the way it's written.... I think we've taken a little leniency -- and I appreciate that -- in the broad terms that we've started to discuss in the various sections. The minister tells us that gas taxes and tolls are the only dedicated funds in the act.

Interjection

L. Hanson: Oh, yes. I'm considering that to be minor. I'm referring to the ones that are specific in here. But it also gives the authority the responsibility of setting what those may be. The act gives the authority, as I understand it, to set tolls, but it doesn't say what those tolls should be. So even though this act dedicates any money raised from those tolls to the repayment of whatever the loan may be, by the same token this authority also has the authority to set what those rates may be.

Hon. G. Clark: That's correct, although any rates set are subject to Lieutenant-Governor-in-Council approval. The corporation requires the government's approval for the toll rates, but I'm sure the member would agree that governments set fees and licence costs all the time. It's exactly the same here today.

L. Hanson: ...the borrowing authority. The authority is established. The question is, of course: what limits the term of the amortization? As the minister has mentioned a number of times in the House, I was an automobile dealer. If you buy an automobile and amortize the cost over 50 years when you expect its life to be ten, somewhere your thinking is a little off course. I wonder what protections there are against doing that, because the people of British Columbia may be saddled with a burden far after the asset is of any value.

Hon. G. Clark: Actually, generally accepted accounting principles don't allow that to happen. We follow those very rigorously, and I'm sure the auditor general and members of the House would do that. Essentially, the auditor general requires the government to ensure.... I mean, we couldn't do it over 100 years or something; it would be ludicrous, and that's not contemplated.

In addition to that, of course, the borrowing plan must be approved by Treasury Board. Again, we apply the same accounting principles that we do to all Crown corporations. I hope that gives the member some comfort that there can't be any shenanigans in terms of length of time over which you amortize an asset.

D. Mitchell: Just following up on a question by the previous member with respect to the tolls that will be collected by the authority. The minister knows that I have some interest in this topic. Would the toll revenue that would be collected by the authority be specifically earmarked for projects, or would that simply be collected, combined within the authority and used for any purposes? What would that revenue be used for?

Hon. G. Clark: It would be project by project. Why else would you do it? I guess the member is asking whether we would put a toll on the Second Narrows Bridge to pay for a new Lions Gate Bridge. The answer is no -- not because the member opposite has made a compelling case for his constituents in West Vancouver but simply because it would not be equitable. The tolls would be designated to pay for the road.

The one toll we do have is the Coquihalla Highway toll. As I recall, it raises $35 million a year. The cost of the highway is over $1 billion, so it is not sufficient to pay for the cost of the road. There's no draining of revenue from the Coquihalla to any other project. It simply doesn't cover the cost of amortizing $1 billion over any period of time. That's not a criticism. In fact, it may be that the tolls on a bridge, say, may not fully self-finance the bridge; that's not required. If there is a toll, it's not required that that happen. It may be that the gas tax or another source of revenue for the corporation could be applied.

[ Page 5956 ]

Tolls have not been decided by the government. There is only one toll highway in British Columbia. This bill allows that eventuality should the government so choose. If we did choose to proceed with tolls -- and I know the member who spoke is somewhat supportive of the concept, anyway -- it would have to be done with great care, not just for good economic reasons but for political reasons as well, because one of the biggest concerns that I would have is what might be called equity. Why would one region have to pay tolls when another region didn't? Those kinds of considerations are important.

The Coquihalla has a toll and the implicit policy, if not explicit, is that there is an alternative route to the same destinations that is free. If we apply that test, how does that play out? Those kinds of things have not been developed yet, and no decision has been made. I'm sure there will be lots of public consultation before that takes place.

D. Mitchell: The minister indicated that the Lieutenant-Governor-in-Council would be the authority to decide on any toll, should the government wish to implement tolls on a bridge or a highway. The minister has now indicated that tolls, if they are going to be implemented, would not be designed to fund projects other than the specific bridge or highway that they're being applied to. Does that mean that the Lieutenant-Governor-in-Council, when setting the rate for any prospective tolls, would be looking at setting a toll rate that would not be higher than necessary to fund a specific project?

In other words, citizens in one part of the province, if they have to pay a toll, would not be funding projects funded under this authority in other portions of the province. Can the minister give that assurance to this committee?

Hon. G. Clark: That's a good question. I hesitate to give that assurance, because a decision hasn't been made to proceed with tolls at all. That's a policy debate which we can have at the time, if we choose to do so. I think it's important that criteria be developed to deal largely with equity considerations -- I think someone was pointing out that before we proceed, if we were to proceed. I don't want to preclude that discussion. The chair of this is, of course, the Minister of Highways.

I'm not trying to pass it off, but I think that's where the work is being done to see what would be practical and desirable, and that would come forward for discussion. The minister's estimates haven't come up yet. You might want to discuss that with him at that time.

D. Mitchell: I have one final point on this, just so I can understand exactly what the minister said. This

section of the legislation anticipates toll revenue being collected by the government on highway construction or bridge projects, which implies a kind of pay-as-you-go philosophy, so there is a point of principle here. Is the minister able to assure us today in this committee that if a toll is implemented on a specific project, citizens paying that toll will not only be paying as they go but they won't be paying for other projects as well? In other words, will the combined toll revenue be used to finance all projects? Will they be combined? Will they be intermingled?

Or will they be project-specific -- earmarked specifically to fund only a specific bridge rebuild or a highway construction project? Can you assure us that residents in one community aren't going to be paying a toll so high that they're actually funding not only that specific project, on a pay-as-you-go basis, but they're funding projects elsewhere in the province as well? Is there going to be some principle of equity applied under this authority?

Hon. G. Clark: I think the technical answer is that all toll revenues go to the Transportation Financing Authority. It is dedicated to transportation financing, not to the specific project. I think it's unlikely that you'll find too many projects which would generate more revenue from tolls than the cost of the capital project. The Coquihalla toll is not $1; it's more significant than that, and it doesn't come close to paying for the capital cost.

Some of the projects on the Lions Gate Bridge would be $250 million. I'm not saying the work has been done, but I'm not sure what the toll would be required to pay for that. For equity purposes, for political -- not big P, but political -- public policy equity purposes, I don't think you want to have a huge toll on the Lions Gate Bridge to subsidize roads all over the place. At the same time, I think it's possible to say -- certainly in the lower mainland -- that toll revenue is dedicated to improving highway construction in the lower mainland; it's still user-pay.

I'm just saying that criteria haven't been developed yet, and I'm sympathetic to the position that the member is putting, which is to make sure there isn't some cross-subsidy. But at the same time it's all one lower mainland road network, for example, and the revenue does flow to a fund within the corporation to pay for these projects. It will be a revolving fund. So I just don't want to preclude any creative look at that. But I think we'd be subject to a lot of scrutiny on this question, largely for equity considerations.

The Chair: Before I recognize the hon. member for West Vancouver-Garibaldi, I would remind the committee that the Chair has allowed fair latitude in committee. However, it is very clear now that we have moved far away from the principles that we should be following in committee. We're getting into second reading debate. So with that in mind, I would ask the members to try and address the sections as they are.

D. Mitchell: Thank you, Mr. Chairman. I appreciate we're dealing with

section 10 under

part 4 of the act. This

section deals with the authority and the powers within the authority, and since we've been asking a few questions on tolls -- and I know that comes a little bit later in this part of the act -- I have just one final question then.

We're being asked to approve this bill in committee that gives this authority the power to establish tolls, so conceivably, as members of this committee we have to assume that the government is contemplating putting tolls on. That must be one of the intentions. In the fiscal year ahead covered by his budget, is there is any

[ Page 5957 ]

intention to establish any new tolls on bridges or highways in the province?

Hon. G. Clark: No decision has been made at this time.

J. Weisgerber: Just to continue this and not reopen the issue next time around.... For the minister's information with regard to the Coquihalla, the toll was put on to cover the accelerated costs of bringing the Coquihalla on stream for Expo and, in fact, the accelerated costs as they were calculated have now been more than covered by the tolls collected.

The question I have follows along that line: does the minister anticipate that the $35 million a year or thereabouts collected on the Coquihalla tolls would now flow into this Crown corporation?

Hon. G. Clark: No, the legislation doesn't allow it.

G. Wilson: In light of your ruling, I was a little concerned that we were going to be dealing with all matters of financing of this agency under

section 10, pass it and then be told we couldn't revisit it. But given that that's not so, maybe I'll deal with the matters of finances later.

I just had one last question. With respect to the corporate seal,

section 10(3) provides the Crown corporate status. Presumably it will also be governed under legislation governing Crown corporations. I wonder what the connection is with respect to the legal status of this authority, given the assignment of this jurisdiction.

Hon. G. Clark: I'll just give the member a formal response. The subsection is a standard clause. The corporate seal provides a means for the authority to execute formal legal documents such as contracts. While there are other ways for corporations to execute documents, a seal is the industry standard -- for example, in real estate transactions.

G. Wilson: In fact that was my next question. The corporate seal is essentially here so that this agency can involve itself in land transaction through either the purchasing -- I think we've already seen they will be able to expropriate -- and holding of land. It is against that asset, presumably, that borrowing will be able to take place. That's the reason, the purpose for this corporate seal. Is that correct?

Hon. G. Clark: Yes.

G. Wilson: Just to be very clear, as a result of the capital that it is holding, that will be the determinant of the amount it will be empowered to borrow? Is that correct? What the minister has said is that it can't borrow any more than it can essentially secure, so that the more capital asset it has, the greater its borrowing capacity. Is that right?

[4:30]

Hon. G. Clark: No, it's not the asset. It's the revenue stream that limits the ability to borrow. You're not borrowing on the physical asset that you hold title to. I guess that's one way of looking at it, but we're required by law to make sure there's a revenue stream to support it.

G. Wilson: I don't want to jump into that other debate, except that while it's on my mind, I do want to come back to the point by the member for Vernon that if you're amortizing over a longer period of time, the revenue stream, as the minister puts it.... Everybody else calls it taxes or tolls or levies or fees. Revenue stream is an almost Wordsworthian way of telling people that they're going to ding them for more money.

Having looked at this pastoral view of taxes with his revenue stream, how does the minister reconcile the revenue stream with long-term capital financing, which surely has to be secured by the capital asset of the corporation? There's no other way that you're going to get enough money to build the projects.

Hon. G. Clark:

Section 18(8) says that everything must be prepared in accordance with generally accepted accounting principles. We will get to this, Mr. Chair.

Section 10 approved.

section 11.

G. Wilson: With respect to the conversation we were just having on the purpose of this authority, the statement here as to purpose is: "to plan, acquire, construct, improve or cause to be constructed or improved transportation infrastructure...." There are three principal purposes. If this authority is going to engage in planning, to what extent will that planning start to impose the kind of capitalization that will be needed?

Once again, the reason for my question is that the Ministry of Highways already has a very competent planning staff that have involved themselves in blueprint after blueprint, revision after revision, as they run into various problems. Surely it's not the intention of this minister to duplicate that planning process. If it isn't, and as this is now a Crown corporation with the ability to acquire and expropriate land, could the minister define what exactly it is that they're going to be planning with respect to that development?

Hon. G. Clark: You're absolutely correct that there would be no duplication of effort. It would be largely one and the same people: the Transportation Financing Authority and the Ministry of Highways.

If you're borrowing money to build a bridge, you must back it up with a plan -- engineering drawings, etc.; the full gamut of a Crown corporation. While the planning may be executed in the Ministry of Highways, the plan will have to accompany the project and the ability to actually construct the project. This is essentially the purpose of the authority, in keeping with what I said earlier and the fact that the Minister of

[ Page 5958 ]

Highways is chairing the authority and we won't be duplicating effort. It's just an attempt to make the case, when we're borrowing money, that this authority is a Crown entity that is undertaking highway construction in the province.

G. Wilson: Moving to the second purpose, which is to acquire, can the minister tell us whether or not one of the purposes of this authority is to acquire assets currently held by other Crown corporations?

Hon. G. Clark: Absolutely not, although if one Crown is building a road through B.C. Ferry property or something, it may require the purchase of property from that other Crown. But it's certainly not the purpose of this to do that.

G. Wilson: So if this is going to act as a Crown agency that is able to acquire and hold property, the minister is telling us that there is no plan to set aside a bank of capital assets upon which they can borrow. There is no plan to go out and acquire already constructed assets -- and there are many in this province that would be eligible under this -- to build that base of holdings through which they can then finance capital projects. Is there no attempt to bring them into this and borrow against it?

Hon. G. Clark: I was trying to understand that. Is the member asking whether we are trying to hide debt by buying it from ourselves or something, by moving it over?

G. Wilson: That did cross my mind.

Hon. G. Clark: No, absolutely not. I give him complete and categorical assurance that acquisition from other Crowns or agencies is not the intention. This is purely construction of highways in the province.

L. Hanson: "The purpose of the authority is to plan, acquire, construct, improve...transportation infrastructure...." What relationship would the minister see this borrowing authority have with other Crown corporations that provide transportation infrastructure around the province -- B.C. Ferries, B.C. Transit, B.C. Rail, the airport authority?

Hon. G. Clark: Good question. As the member knows and as I've reported in the House, when we took office and I was given responsibility for B.C. Transit and B.C. Ferries, I was shocked to find that the Minister of Transportation and Highways had not a single policy person reviewing the transit and ferry corporations' plans. So in the Ministry of Transportation and Highways -- I might as well call it the Ministry of Highways in those days -- there was no transportation planning that was coordinating all the activities.

I'll say this: there was the beginnings of a CEO committee of all the Crowns that was looking at coordinating the Crowns. Now, of course, we have the Crown Corporations Committee of cabinet to try to coordinate them.

Transportation planning, intermodal transportation planning, has been done by the Ministry of Highways, but it is not.... You can ask the minister, but I can safely say that we need to do more of it, at the very least -- more coordination and more planning. When you get to the Ministry of Highways estimates, you may want to talk to him about it. I'm sure you'll get a long dissertation, because the Minister of Highways is working very hard on precisely this project. The CEOs of B.C. Transit, B.C. Ferries and B.C.

Rail and the Ministry of Highways and Transportation have been meeting to look at ways and models with which we can try to coordinate better than it has been done in the past. Either the minister responsible, the same person, will be pursuing it, or, if there is a staff person attached to this corporation, that person will, I assure you, be involved in any strategic planning regarding the other elements of transportation planning in the province of British Columbia.

As I say, the member is absolutely correct that this is a key problem in British Columbia: making sure that we're doing a better job of government spending, a smarter job in the tradeoffs that take place between transit and roads and ferries and the like. We're determined to do that, and we're reviewing it. This bill won't have any impact on that because, again, it's the same minister, and we'll make sure that it takes place.

G. Wilson: Following up on the question -- and I agree it is an excellent one, because I suspect there's a lot more to this than meets the eye. I would think that as the minister sees the vehicle he's provided for himself and for the Minister of Transportation, there will be a tremendous tendency to want to move toward this proposition of Crown corporation interrelationships.

Again coming back to the question on acquisition, can the minister tell us with respect to the purpose of this authority whether or not there has been any discussion around the purposes of this authority to be a functioning part of the integration between B.C. Ferries, B.C. Transit and B.C. Highways, in particular, and the planning of the new fast-ferry systems and the new transportation systems in terms of terminal developments and parking facilities. I know there has been discussion in the past of having an agency or an authority of government outside of the B.C.

Ferry Corporation to look after the capital construction costs of the terminals themselves. I wonder if this is the vehicle that that is going to be used for.

Hon. G. Clark: No, that's not correct.

I was reminded by the Minister of Forests a minute ago that the previous administration -- the Vander Zalm government -- abolished the planning department in the Ministry of Transportation and Highways. So, there you go.

G. Wilson: My last question with respect to

section 11 has to do primarily with the question of improvement of transportation infrastructure. This comes back to a very serious concern that I expressed earlier in this debate. It's one that is shared widely around the province because of the nature of this

[ Page 5959 ]

authority. Under the authority of this new B.C. Transportation Financing Authority, is it the purpose of this bill to effect the dollars that are going to go into the improvement of highway infrastructure because of the new employment or job...? What was it?

Interjections.

G. Wilson: Job stimulus -- or whatever it is that the minister wants to call this idea of getting people to work who aren't currently at work, but only if they meet certain criteria.

If we're going to look at highway improvement under this -- if we're looking at this as a principal note of financing -- how does that impact on current dollars that are allocated under the Ministry of Finance? I know we can get back to this when we start to look at the amount of dollars that are actually budgeted under the Transportation and Highways budget this year for highway maintenance and operation.

The people who are involved in day-labour contracting want to know whether they are going to be contracting through the Ministry of Highways under the established rules for the application for and tender bidding on those contracts; whether the roster systems that existed in the past are going to continue to apply; or whether they are going to be facing a new agency that is going to be looking at highway improvement and putting in place a new employment standards portion of those tenders. They want to know that, because a very substantial part of their livelihood is dependent on highway contracts.

Hon. G. Clark: At this point it will be the existing Ministry of Transportation and Highways. That's likely to be the case at any point, but we will be reviewing to see whether there are day-labour contractors.... We have no intention of putting them out of business or the like. Many of them, as you know, have apprentices and are training people and the like and qualify, so we'll be reviewing that. But certainly at this time there's no intention of changing that.

Section 11 approved on division.

section 12.

G. Wilson: I wonder if this is not the appropriate place to get the minister to tell us a little bit more about the actual dollars committed to this, because the powers and capacity obviously require a certain amount of money. Looking through this bill, it's very hard to know exactly where we want to bring that up, except under the borrowing portions.

If one looks at the Finance budget -- as it's been approved -- there is $33 million, I understand, going into this.

Interjection.

G. Wilson: Is it $37 million? I'm talking about revenue that's coming in from the fuel tax and the rental car tax. I understand it's $33 million projected. Is that correct?

Interjection.

G. Wilson: The minister said that there's roughly $80 million that he expected to come in through this as financing through Transportation and Highways. Is that right?

Interjection.

G. Wilson: So $33 million is expected to come in from an increased tax on motor fuel and rental cars. Is that right? The minister was also suggesting that there was going to be an additional $80 million revenue coming in to this authority from Transportation and Highways. Is that correct?

[4:45]

Hon. G. Clark: The revenue to the Transportation Financing Authority is $33 million; the borrowing authorized is $80 million.

G. Wilson: If we're looking at the total number of dollars in terms of projected revenues of $30 million, and we've got $80 million in terms of borrowing, and if the two main areas of revenue make up the spending, where is the shortfall between the $33 million projected out of the two sources of funding going to come from to make up the difference between the $33 million and the $80 million?

Hon. G. Clark: The $80 million is capitalized. To borrow $80 million, you require roughly $8 million a year to pay the interest and pay down the debt. In fact, we have $33 million worth of revenue, and only $80 million, at the moment, authorized for borrowing. We would likely have a surplus of some money in the Transportation Financing Authority. That's precisely the point here. The annual revenue of $33 million.... It's more than that; the half year revenue is $33 million. And this year we are borrowing $80 million to pay that off.

G. Wilson: That's a little alarming. If that's the case, surely the capacity to be able to borrow is potentially going to be well in excess of the $80 million, and we're talking about the $600 million. If we're looking at $600 million of borrowed capital, can we expect there will be some other means of revenue generation in order to take care of any shortfalls that may come in from the projections that the ministry has made?

Secondly, if you're talking about planning, acquiring and constructing, we know that highway construction costs escalate over the year; they don't diminish. We know that those escalations are often brought about by a whole variety of unpredictable events. Where, in the powers and capacity

section of this, is the flexibility provided to be able to deal on an annual basis with revenue shortfalls, in terms of financing the capital projects that may be approved under this authority?

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Hon. G. Clark: No. In fact, that's the discipline that the bill contemplates. You have to have a revenue stream in place before you can borrow the appropriate money. Right now, in order to finance the $80 million, you require about $8 million. But in fact there's $33 million going into the Transportation Financing Authority. So there's more than enough revenue to offset that borrowing.

C. Tanner: If that's the case -- following my friend's questioning --