1984 Legislative Session: 2nd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, MARCH 5, 1984

Afternoon Sitting

[ Page

3611 ]

CONTENTS

Routine Proceedings

Partnership Amendment Act, 1984 (Bill 8). Hon. Mr. Hewitt

Introduction and first reading –– 3611

Oral Questions

Cutbacks in health programs. Mrs. Dailly –– 3611

Mr. Hanson

Mr. Blencoe

Hiring practices of Quintette Coal Ltd. Mr. Gabelmann –– 3613

Ministerial statement: RCMP report on Shoal Island log scaling. Hon. Mr. Smith

–– 3613

Mr. Barrett

Committee of Supply: Ministry of Finance estimates. (Hon. Mr. Curtis)

On vote 27: minister's office –– 3614

Hon. Mr. Curtis

Mr. Barrett

Mr. Reynolds

Mr. Rose

Mr. Passarell

Mr. Stupich

Tabling Documents –– 3635

Appendix –– 3636

MONDAY, MARCH 5, 1984

The House met at 2:05 p.m.

Prayers.

MR. STRACHAN: I'd like to take this opportunity this

afternoon to welcome to the House Mrs. Kate Crowcroft, who is one of

Vancouver Island's finest cooks and pastry chefs, and her cousin, Tom

Harkins. Would the House please welcome these people to our assembly

today.

MR. COCKE: Mr. Speaker, visiting from La Belle Province —

Aylmer, Quebec, as a matter of fact — are Harvey and Gaby LaVallee. I'd

like everyone to welcome them.

On behalf of all members of the House I would very much like to

re-extend a very warm and super spring-like welcome to the capital city

to the twelve teams and their attendant families and numbers of friends

and fans who have descended upon us to battle in the 55th Canadian

Men's Curling Championships, the Labatt Brier.

HON. MRS. McCARTHY: Mr. Speaker, I'd like to introduce to the

House a friend from the city of Vancouver who comes from a very

community-minded family. Will the House please welcome Brad Reynolds.

HON. MR. SCHROEDER: Mr. Speaker, Little Red is here today. Please, for my sake, make her welcome.

HON. MR. GARDOM: Petit Rouge, Mr. Speaker.

Introduction of Bills

PARTNERSHIP AMENDMENT ACT, 1984

Hon. Mr. Hewitt presented a message from His Honour the Lieutenant-Governor:

a bill intituled Partnership Amendment Act, 1984.

Bill 8 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

CUTBACKS IN HEALTH PROGRAMS

MRS. DAILLY: I have a question for the Minister of Health.

The government is imposing an 8 percent income tax increase on all B.C.

citizens, supposedly to maintain health care. Will the minister then

advise the House why, at the same time as his government is planning to

impose this income tax on all citizens, he is cutting back on all

preventive programs, including the funding of health clinics?

HON. MR. NIELSEN: Mr. Speaker, I suppose the answer could go on almost

indefinitely. The member is really asking me to rationalize the disbursal of

the amount of money we have sought in our budget for next year. The increase

in the Health budget next year, as outlined in the estimates, is approximately

$51 million. Changes are to take place in the budget of the Ministry of Health

with respect to individual grants, organizations, institutions and specific

programs under health care. This year the increase will be approximately $51

million over the previous year. In addition, there will be other changes in

the budget with respect to amounts allotted for various programs. Yes, some

grants are being reduced. Notice has been given to some organizations that there

will be reductions in some grants but overall the funding for health care will

be increased. Without additional sources of revenue by way of surtax or others,

we would have been in the position of seeing the possibility of a reduction

in the amount of money available for health care in the province.

So we've had to make changes. There is a net increase of $51 million

as opposed to the possibility of a reduction, which would have meant

further reductions right across the board for all aspects of health

care in the province. I don't think it is inconsistent at all. We have

said frequently that health is our number one priority, and I think the

budget suggests that that is correct.

MRS. DAILLY: Mr. Speaker, I don't think the minister really

paid any attention to the second part of my question — probably

purposely. So I would like to ask, as a first supplementary: is the

minister not aware of the importance of preventive programs in health,

relative to the reduction of health costs?

Secondly, and more specifically in that realm, I'd like to ask the

minister about his reduction in the amount of money to the Reach clinic

in Vancouver Centre, which is known for its preventive health care.

Specifically, why has he imposed a cutback of $27,000, or 27 percent of

the operating funds for this vital preventive service?

HON. MR. NIELSEN: Mr. Speaker, I presume, because the

question was permitted, that it's appropriate to discuss next year's

estimates at this time. Regarding reduction of health costs, the member

may be suggesting that at some time emphasis on the preventive health

side will reduce costs eventually. At the present time it would be seen

as additional costs, and quite appropriately spent in that way.

Our preventive services continue to be well funded in the province:

perhaps not to the extent some people would wish, but we still must

maintain our budgets in those areas which are on the curative side, and

that represents the vast majority of the moneys expended. We have just

so much money to expend under health care in the province and we are

trying to allocate it to those programs which require it. Certainly

there are going to be some modifications and possibly reductions in

various grants, organizations and others.

The Reach clinic the member spoke of has had a reduction of 27

percent, from $326,000 to approximately $239,000. We believe the Reach

program can continue to function and we believe the funding is

appropriate. I think almost every organization sought additional

funding this year, but we simply do not have the funds to meet all of

their requests. We've had to go through our grants program and make

such modifications as are necessary to ensure that we have the funding

for the various programs which the ministry has supported for a number

of years. There is nothing more mysterious about the Reach Community

Health Centre's reduction than that the money was not there to meet

their request for the year. We have made similar changes in various

[ Page 3612 ]

grants throughout the province to try to

accommodate as many of these associations and organizations as we can.

Because of the difficulties in meeting all the requirements under our

budget, we have had to make decisions, and one decision has affected

the Reach program. We still believe they can function, and we still

believe they can offer a useful service to the citizens.

[2:15]

MR. HANSON: The James Bay Community Project in Victoria

provides integrated health and social services for a community of

12,000 people. Will the minister advise why he has slashed 27 percent

of Health ministry funding from the James Bay project?

HON. MR. NIELSEN: The same situation prevails with the James

Bay Community Human Resources and Health Centre. The centre was

established in the mid-seventies to provide preventive and primary

health care to the young transient population. Today the centre is

primarily involved in family practice operations. Last year the centre

received approximately $184,000 in addition to $200,000 from the

Medical Services Commission. Once again, we believe the centre can

continue to function. Their funding has been reduced from $184,000 to

$134,000, but I understand they will continue to receive approximately

$200,000 from the Medical Services Commission.

We believe that the funding level is considered adequate for that

which is being offered by the centre, and the centre will have to

prioritize what it is offering in that particular community. We believe

that there are considerable savings in the administrative side. We have

yet to hear from the James Bay Community Centre, as far as I know, as

to what their decision in that respect will be, and we wait to hear

from them. The James Bay Community Human Resources and Health Centre,

the Reach centre and others are no different than any other

organization in the province. When we are short of funds, we must make

some decisions, and those decisions have been made.

MR. HANSON: Supplementary, Mr. Speaker. As the minister

stated, the James Bay project provides preventive health care for

senior citizens, which are approximately half of the 12,000 population

of James Bay. The program there keeps senior citizens from having to

occupy acute-care or extended-care beds, because preventive diagnostic

services are available to them so they are not going into an acute-care

bed because of over-medication, loneliness, lack of activation or

something of that nature.

I want to ask the minister what consideration he has given to the

effect that these cutbacks will have in filling up acute-care and

extended-care beds, which is a far more costly way of providing service

of a medical nature to these citizens.

HON. MR. NIELSEN: Mr. Speaker, the assumptions the member has

reached, I suppose, could be achieved if one wished to take a certain

point of view with respect to what the James Bay Community Centre may

do and what it possibly could do. The officials within the ministry

believe that the amount of grants available next year to the James Bay

Community Centre will be adequate for their purposes. Once again, we

will be requesting from them a report as to what they intend to modify

in their programs, and we will be then better able to relate to what

the effect could be. I emphasize once again that there is quite a real

possibility that some moneys could be saved through administrative

modification. We believe that the medical side of it is still going to

remain adequate, and I emphasize that approximately $334,000 will be

available to them for their operation next year.

MR. BLENCOE: Mr. Speaker, a direct question to the same

minister: is the minister aware that his own evaluation by his own

ministry has shown that this program is totally cost-effective, is an

excellent way to deliver service and has been proved to save the

taxpayer thousands and thousands of dollars, and that by removing this

prevention side of things, by removing the ability of the doctors to

work in the community as much as 60 to 70 hours a week, he indeed is

going to cost the taxpayers of British Columbia a lot more money? Is he

aware of those circumstances?

HON. MR. NIELSEN: Overall, I am not aware of those

circumstances, because I don't agree with the conclusions reached by

that member. I certainly don't believe that any program in the province

is totally cost-effective.

MR. BLENCOE: One last supplementary: is the minister prepared

to release the $51 million that he's holding over from the federal

government and put that into health care? There's $51 million

unaccounted for. With the James Bay Community Project and the Reach

project dealing with people on a daily basis, much of that money could

be going to these prevention programs. Is he prepared to release that

$51 million?

HON. MR. NIELSEN: Mr. Speaker, the $51 million is the amount

of money by which the budget has increased over last year. I presume

that's what the member is referring to. There are priorities throughout

the Ministry of Health and throughout the province. All of the money in

the budget in excess of $2.5 billion must be allocated throughout the

province for various purposes. It's easy for that member to ask that

more and more money be placed in the Victoria area, because he

represents the constituency, but we also have to respond to all other

citizens in the province and other MLAs who are requesting funding for

various projects within their constituencies, along with other

organizations which are provincial in nature or perhaps are within a

constituency or a community. There is a limited amount of money to

expend on health care.

Health is the only ministry which has received an increase for the

next fiscal year, and it is not very difficult to understand that there

is a certain limit to what that allocation can be. Money is being

distributed throughout the province to the best ability of those people

responsible within the Ministry of Health. We must make decisions,

decisions will be made and decisions have been made. The member may

have his opinion as to cost-effectiveness of various programs,

including the James Bay Community Health Centre, but people in the

ministry also have their opinions, and they've done their analysis. I

can't agree with that member that all of these assumptions he has made

are correct. The resource centre will continue to operate, and we

believe they can continue to provide good service to the community.

That's the money they have this year, and they're going to get along

with it.

[ Page

3613 ]

HIRING PRACTICES OF QUINTETTE COAL LTD.

MR. GABELMANN: My question is to the Minister of Labour. Will

the minister advise why Quintette Coal, whose operations are subsidized

by the taxpayers, is currently recruiting heavy-equipment operators and

heavy-duty mechanics in Sudbury and Labrador City rather than hiring

such trades in British Columbia?

HON. MR. McCLELLAND: I wasn't aware that Quintette was subsidized by the taxpayers.

MR. GABELMANN: I'll ask another question. Will the minister

advise whether Quintette has filed a manpower plan with the minister

under

article 13 of the comprehensive agreement between the province

and Quintette Coal, and whether Quintette's manpower plan includes the

hiring of heavy-equipment operators and mechanics from eastern Canada.

HON. MR. McCLELLAND: I think the member would be better to ask the minister with whom that plan would have been filed, and it is not me.

MR. GABELMANN: Mr. Speaker, I wonder if the Minister of

Labour would advise whether the government has any policy in this area

and whether it has issued any guidelines to Quintette requesting that

they hire British Columbians for these taxpayer- subsidized jobs.

HON. MR. McCLELLAND: It is the responsibility of companies

that are planning projects such as the one in which Quintette is

involved to file manpower reports with the government as part of their

total overall operating report, and that has been done, I'm sure, in

this instance.

Secondly, I understand that under the Canadian Charter of Rights

there is a freedom of movement section, which does not allow us to put

up barriers or fences at our provincial borders.

MR. SPEAKER: Hon. members, the member for Alberni has advised the Chair that he wishes to rise on a matter under standing order 35.

MR. SKELLY: Thank you, Mr. Speaker. I ask leave to move

adjournment of the House under standing order 35 to debate a definite

matter of urgent public importance. The matter concerns the testing of

the cruise missile over Canadian soil, and the urgency is that these

tests are scheduled to begin tomorrow morning.

Many Canadians feel that testing another nation's missiles on our

soil infringes upon our sovereignty, reduces this nation's

effectiveness in negotiating worldwide nuclear arms reductions, and

also makes Canada a participant in an arms race which is based on a

principle of mutual assured destruction.

I'm sure, Mr. Speaker, that you'll consider this matter of immediate

and urgent public importance. I would encourage you to come to a

decision on this matter as quickly as possible.

I also have a motion for the Speaker to consider. The motion is that....

MR. SPEAKER: Thank you, hon. member. The motion need not be

read; it must only accompany. The member has briefly stated his case.

The Chair will undertake to review the matter and bring a response back

to the House at the earliest opportunity.

MR. SKELLY: Would it be possible to consider this matter immediately, or after a recess?

MR. SPEAKER: Order, please, hon. member. The Chair has given

an undertaking that it will bring the matter back to the House at the

earliest opportunity.

MR. SKELLY: Would it be possible, Mr. Speaker, to ask leave

of the House to recess the House to give the Speaker time to consider

this issue? It is a matter of some urgency.

MR. SPEAKER: Order, please. Hon. member, the Chair has ruled

on numerous occasions that it will not adjourn the business of the

House on matters relating to standing order 35, or other matters that

are raised that would be an infringement upon members' abilities to

carry out the duties for which they have been elected. The Chair will

undertake to bring the matter to the House at the earliest opportunity.

MR. SKELLY: Could I ask leave then, to suspend the rules of

the House to present the motion right now, and to have the members of

the House make a decision on that basis now?

MR. SPEAKER: Hon. member, the Chair has recognized the member

for the purposes of making a statement under standing order 35, and

that is the only reason that the member was recognized. To do otherwise

would be beyond the standing orders of our chamber.

RCMP REPORT ON SHOAL ISLAND LOG SCALING

HON. MR. SMITH: I wish to advise the Legislature that the

RCMP report into the criminal investigation on Shoal Island log scaling

has been received and examined by me. The investigation did not reveal

any criminal activity; my officials have recommended no further action,

and on the basis of the present information I concur with that

recommendation.

The RCMP investigation was initiated by my officials on January 26

in response to a letter from Mr. Ian Mahood of January 11. In that

letter Mr. Mahood stated that he'd been provided a copy of scale

returns taken from the files of the ministry — that is, Forests — that

are said to be falsified records. He also suggested that there could be

collusion to defraud, as he put it.

By the time the RCMP interviewed Mr. Mahood concerning his

allegations of criminality, the log-scaling report of the ombudsman had

already been laid before the Legislature and was the subject of major

public discussion. When interviewed by the RCMP officers, Mr. Mahood

was questioned specifically about his allegations of falsified records

in his letter of January 11. Mr. Mahood now advised the investigators

that he had no evidence to suggest any criminal activity and that he

did not believe scaling reports had been deliberately falsified. Mr.

Mahood also made like statements through the media. Considering the

results of this interview with Mr. Mahood and the high level of news

coverage,

[ Page 3614 ]

investigators could not consider that the original allegations of criminal activity warranted further investigation.

Mr. Speaker, the government is now free to consider and respond

publicly to the ombudsman's report, which we will do in a full and fair

way at the earliest opportunity.

[2:30]

MR. BARRETT: Mr. Speaker, any fair-minded person will welcome

the statement by the Attorney-General today and congratulate the RCMP

for the swift, prompt action taken on the

interpretation that the

government gave to Mr. Mahood's allegations. It is strange to me that

the Attorney-General has yet to announce the completion of the criminal

investigation in the Tourism ministry, but that is a separate matter.

Mr. Speaker, now that the Attorney-General has made this statement,

now that this matter is, by the Attorney-General's own admission,

discussible by this august chamber, can the Attorney-General tell this

assembly why Mr. Mahood, Mr. Friedmann and Mr. Williston are not called

to the bar of this House to explain the statements on this case? Can

the Attorney-General explain, in giving his report today, why no

mention was made of the fact that the ombudsman's report is given to

the Legislature, not to the government, and of the fact that that

report is still in front of us, and still no

schedule of action which

should have accompanied the Attorney-General's statement today as to

the exact time and place that we're going to hear from Mr. Williston,

Mr. Mahood and the ombudsman?

Mr. Speaker, I ask the House to consider the fact that the

Attorney-General's report is, frankly, blatantly incomplete; with the

knowledge that there was no criminal investigation necessary, with the

knowledge that allegations were incorrect, that substantiated the

position of the ombudsman, who said so right from the start. I find it

interesting that in the report to this House, where apologies have been

demanded from both sides of the House, there is no apology from the

Attorney-General to the ombudsman for the statements made in face of

the fact of the position taken by the ombudsman. At no time did the

ombudsman say that there was a criminal activity — at no time.

Now that we have this admission from the Attorney-General, I want to

know — and the public has a right to know within 24 hours at a maximum

— when the ombudsman will be called to that bar, when Mr. Mahood will

be called to that bar and when Mr. Williston will be called to that

bar, because serious allegations of malfeasance of administration — not

of criminal malfeasance, but malfeasance of administration — have been

hurled at the government through the Minister of Forests, and nothing

has been done about it. Twenty-four hours would be gracious; I will be

gracious. I would expect to hear an apology too.

Mr. Gabelmann tabled a document he referred to between the Minister of Labour (Hon. Mr. McClelland) and Quintette Coal Ltd.

Orders of the Day

The House in Committee of Supply; Mr. Strachan in the chair.

ESTIMATES: MINISTRY OF FINANCE

On vote 27: minister's office, $185,567.

HON. MR. CURTIS: Mr. Chairman, we're back again, just several weeks after the debate on my estimates for the fiscal year coming to a close.

I would like to make a few introductory remarks. Perhaps I could

acknowledge the presence in the chamber today, to assist me, of the

Assistant Deputy Minister of Finance, David Emerson, who, the House

will know, was announced last week as the Deputy Minister of Finance

designate, to assume his position at or about the end of April, at the

time of the departure of the current deputy, Larry Bell. I will have

more to say about Mr. Bell in the course of the next few weeks, but I

am particularly pleased, on behalf of the government, that someone of

Mr. Emerson's competence is able to assume the position of deputy in

the weeks to come.

To summarize, for the benefit of the committee, the 1984-85

estimates for the Ministry of Finance, the members will note that there

are essentially four votes. There are two others, but the four main

votes are numbers 27 through 30: vote 27, the operations of the office

of the minister; vote 28, the operations of the various divisions of

the ministry, including the Purchasing Commission; vote 29, providing a

grant to the Provincial Capital Commission, with respect to their

activities in the capital region; and vote 30, providing for the

operation of the office of the commissioner of the CSP program. The

total expenditure requested for these four votes for the fiscal year

1984-85 amounts to $58.9 million, which represents a decrease of nearly

$5 million, or 7.8 percent, compared to the comparable 1983-84

estimates.

As with other ministries, 1984-85 is to be a year in which the

Ministry of Finance — therefore all taxpayers — will benefit from lower

expenditure requirements as a result of restraint and productivity

measures taken in the current and recent fiscal years. For this

ministry, measures taken to date include the consolidation of the

economics and policy division with Treasury Board staff under a single

and a more effective structure; a reduction in paper flow related to

the financial function by 30 percent, as a result of various

initiatives introduced through the comptroller-general; the

establishment of the provincial treasury as a financial enterprise for

which all costs are recovered from the various Crown corporations and

from funds for which it provides funds management as well as fiscal

agency services; lower costs of goods for the ministry — and all

ministries, I might say parenthetically — as a result of opportunities

captured by the Purchasing Commission, which is within this ministry

vote; automation of revenue collection services in government agents'

offices; the return of ICBC services to the private sector in all but

approximately 20 government agent locations; savings of over $400,000

in annual building occupancy costs, due largely to office

consolidations; and reduction of the ministry vehicle fleet by 25

percent, with the planned disposition of 19 vehicles. In sum, Mr.

Chairman, these and other expenditure restraint and productivity

measures taken to date are to yield full-year benefits in terms of

lower expenditure requirements in the fiscal year of 1984-85 and in

future years.

Additional productivity targets for the ministry for the year

1984-85 include $12 million in savings by the Purchasing Commission

through various discount negotiations with suppliers, over and above

those that are in place now; the reduction, again, of paper flow

through the office of the comptroller-general to 50 percent of the

1982-83 level; increasing the province's utilization of electronic

funds transfer for making payments, including direct deposit of

government

[ Page 3615 ]

employee payroll, resulting not only in a smoother

delivery to the employee but an efficient method at a lower cost — the

provincial treasury will also be developing an approach to collecting

revenues in a similar manner; the development of an automated system

for the production of licence formats; the production of information

through government agents' offices to provide more efficient and

effective service to the people we serve; and a reduction of another

$400,000, or about 15 percent, in the cost of computer data entry as a

result of careful monitoring of project priorities.

That was a brief

summary, Mr. Chairman, of some of the

responsibilities and activities within the ministry in the year coming

to a close, but more particularly in the fiscal year that is about to

start on April 1 –– I look forward to answering questions that members

of the committee may have.

MR. BARRETT: Mr. Chairman, I want to thank the minister for

his summation. I do not necessarily agree with it, but I do appreciate

the summation. I agree, too, that the best and most efficient manner of

dealing with estimates is a series of questions. So to facilitate the

best use of time I do have a couple of questions that I would like to

start off with the minister.

Some weeks ago I asked the minister in question period when the

ombudsman's report with regard to the Shoal Island case came to his

attention as it was delivered to Treasury board and/or cabinet. I would

like to know now, from the minister, when he became aware of the report.

HON. MR. CURTIS: Mr. Chairman, I think I answered that in

question period or following question period. It was approximately

January 21, plus or minus a couple of days.

MR. BARRETT: Mr. Chairman, in terms of precise memory the

date is not a matter of great import. It's just to know that the

minister has had some knowledge of this since the end of January. Has

the minister, with the information in front of him, initiated any

action, either by memo to the Minister of Forests (Hon. Mr. Waterland)

or through investigation with his own department, to recover the money

lost to the Crown because of this discrepancy?

HON. MR. CURTIS: Mr. Chairman, of course there have been

discussions within the Ministry of Finance with respect to the Shoal

Island matter. Indeed, the question of the potential in lost revenues

to the Crown has been a subject of conversation within the ministry. I

have held off on a more definite move with respect to that in terms of

dealing with my officials pending the investigation which was referred

to earlier today in the House by the Attorney-General.

MR. BARRETT: Could the Minister of Finance inform the House

as to the nature of the conversations, who they were directed to and

what particular legislative focus they had in regard to recovery of

these funds?

HON. MR. CURTIS: I wonder if the member would expand on the term — "legislative focus" I believe is the phrase he used.

MR. BARRETT: The existing laws that allow the Crown to act in cases like this.

HON. MR. CURTIS: In cases which may be like this, there is a

clear responsibility through the Ministry of Finance — and in

particular on the revenue side, as the member would know — to ensure

that all moneys which are due the Crown are collected by the Crown.

Again, the discussions I've held with officials have been very general,

pending further investigations undertaken by another minister on the

basis of allegations which were made and which appeared to be very

serious at that particular point in time. I think in his material a few

weeks ago the Attorney-General indicated that a resident of British

Columbia — i.e. Mr. Mahood — had communicated directly with the Deputy

Minister of Finance. It was at that time that the Deputy Minister of

Finance referred the matter, as indeed he should, to the office of the

Ministry of the Attorney-General.

MR. BARRETT: Mr. Chairman, this is a case that has been

dragging on for some years — between 1978 and 1981. I can appreciate

the minister suggesting that conversations took place after the

ombudsman's report, but can the minister inform this House whether or

not his ministry, with statute authority and responsibility, made any

effort, as soon as this claim came to the attention of the Ministry of

Finance, to see whether or not the money concerned was recoverable?

Were any memos, correspondence or departmental action taken in writing

to pursue this request or this problem?

HON. MR. CURTIS: Mr. Chairman, as I indicated to the

committee just a few moments ago, whether it is the specific of Shoal

Island, which has attracted considerable attention, or whether it is

that particular ministry — i.e. Forests in general — there remains a

clear responsibility not only on the Minister of Finance, whoever that

may be at the time, but on the officials within the Ministry of Finance

to ensure, if moneys appear to be due to the Crown, that every action

is taken to recover those or to secure them.

[2:45]

MR. BARRETT: I couldn't agree more with the Minister of

Finance in his last statement. It's absolutely correct, through you,

Mr. Chairman, that if money appears to be owing to the Crown, action

should be taken to recover those moneys and that action should be taken

through the Ministry of Finance. Can the minister inform this House if

he at any time wrote a letter to B.C. Forest Products and said: "We'd

like to recover our money"?

HON. MR. CURTIS: Mr. Chairman, to the best of my recollection, no. No such letter went over my signature to B.C. Forest Products.

MR. BARRETT: Mr. Chairman, in the pursuit of his job as

Minister of Finance, can the minister inform us if he took any action

to recover this money on behalf of the people of British Columbia,

other than asking some questions of the Minister of Forests?

HON. MR. CURTIS: I think, Mr. Chairman, that the Leader of

the Opposition has perhaps glossed over — unintentionally, I'm sure —

the action which I had taken with respect to the Shoal Island question

or any other similar question. Other than speaking to the minister

concerned, in this case the Minister of Forests, I clearly state again

the very definite responsibility for the Minister of Finance and for

[ Page 3616 ]

officials in the Ministry of Finance to be aware of

possible situations where moneys may be owing to the Crown and to act

on those possibilities. It is not something which was dealt with over

the space of two or three days and forgotten or left, Mr. Member, but

indeed is quite clearly an ongoing procedure.

MR. BARRETT: Mr. Chairman, again I find myself in total

agreement philosophically in regard to administration of the Ministry

of Finance by the Minister. It is correct. No one disagrees with the

minister. An ongoing evaluation of a complaint with the potential loss

of revenue to the Crown would be incumbent upon the Ministry of Finance

to follow. I couldn't agree more. All I'm asking is if the minister can

give this House some evidence that that ongoing examination, study and

investigation took place. Had it taken place, perhaps this ombudsman's

report would not have been necessary. It could be interpreted, through

you, Mr. Chairman, that the ombudsman actually did the work of the

Ministry of Finance. Surely while all this work was going on with the

ombudsman, somewhere deep in the bowels of the complex Ministry of

Finance that requires such high-level dedication, someone — some lowly

minion who is not yet subject to restraint — wrote a memo saying: "Hey,

maybe they owe us some money here and we'd like to collect."

In the intervening years that took place between the initial

complaint and the ombudsman's report filed in this House, was there any

internal investigation by the Ministry of Finance into the possibility

of us, the taxpayers, recovering some money owing us?

HON. MR. CURTIS: Mr. Chairman, I wonder if the member would

assist me in answering the questions by indicating whether he has the

view that the matter raised by Mr. Mahood — the matter which was the

subject of the ombudsman's report to this chamber — was in fact going

on for a number of years. Is that the essence of the question?

MR. BARRETT: Mr. Chairman, I would ask the minister to put

his seatbelt on and buckle himself in for a shock. If he's not aware of

this information now and he hasn't had a chance to peruse the report,

which he's been aware of since January, this complaint has been in

front of the government for over three years. Three years! If the

minister is saying that it first came to his attention only through the

ombudsman's report, that flies in face of the facts. I'm asking the

minister for a simple answer. Did you initiate any studies whatsoever

in your responsibility as Minister of Finance to see whether or not

money owing or alleged to be owing to the Crown was collectible? Was an

effort made to collect it?

HON. MR. CURTIS: Mr. Chairman, I'm pleased that the member

further qualified the question, because much of his earlier questions

dealt with the so-called Shoal Island case. I believe his first

question in his series this afternoon was: "When did you become aware

of the ombudsman's report?" I answered: "January 21, plus or minus a

couple of days."

The member will know from his time as Minister of Finance that

internal audit practices are carried out on a regular basis; I assume

they were in the period 1972-75, and certainly I'm satisfied that they

have been since 1975-76. I might say parenthetically that they have

been accelerated in the last five to six years, and indeed, quite apart

from the specific area of concern raised by the ombudsman, on a fairly

regular basis the office of the comptroller-general instructs that

internal audit procedures take place in a number of ministries. One was

underway in the summer of 1983 with respect to the Ministry of Forests,

only insofar as moneys owing or possibly owing to the Crown were

concerned. I'm sorry that I don't have the precise date that that

internal audit was concluded. It could be revisited at some other time,

of course.

MR. BARRETT: I want to thank the minister for his answer. He

informs the House — and I wish to be correct — that an internal audit

took place through his ministry of the Forests ministry to see if funds

were properly coming to the Crown or being collected. Those were your

words, Mr. Minister?

HON. MR. CURTIS: Close enough.

MR. BARRETT: Now you have received a report on that internal

audit; you've just told the House that. Did that report on the internal

audit, as routinely scheduled by your ministry, indicate that there was

a problem in any way with collecting funds related to stumpage?

HON. MR. CURTIS: I think it would be correct to say that the

question of stumpage revenues and revenues due the Crown through the

Ministry of Forests is a matter which is constantly of concern to the

office of the comptroller-general. I think that has been the case for

many years and will undoubtedly, because of its complexity, be the case

for a good number of years to come. The internal audit division of the

office of the comptroller-general, as I say, was looking at an audit of

the scale and royalty system in 1983, with the general conclusion that

it was indeed complex and that there was still doubt, which will

remain, as to all the revenues due coming to the Crown, and quite apart

from that as to whether all revenues coming to the Crown were coming in

a timely manner. I'm concerned about that, and I tell the committee

that I am. I have been concerned about that, and I don't think that

after the passage of my estimates in the next few days I will be able

to say that I am no longer concerned about that. It is, as the

committee will know — particularly those who have served in the

treasury benches — an extremely complex and often frustrating process.

I'm speaking now of the collection of revenues from our major industry,

forests. I think the Ministry of Finance should strive for perfection;

I think that the office of the comptroller-general should be and is

striving for perfection. I don't want to appear pessimistic but,

rather, realistic when I say that I'm not satisfied that we will easily

achieve absolute perfection. But the member should know, and I assure

the committee, that this matter is not concluded insofar as I'm

concerned. I speak of the whole question of the collection of revenues

from the forest industry. There may be Shoal Islands from time to time,

but the broad issue is by no means complete, and I certainly don't

intend to turn away from it.

MR. BARRETT: I am overwhelmed with gratitude that the

minister does not intend to turn away from this problem. It's not a

question of turning away from the problem that disturbs me; it's the

lack of action on the solution I'm seeking. I want to say in all

generosity how impressed I am with the eloquence of the minister in

finding the method he has

[ Page

3617 ]

found to circumvent answering the question. Yes,

the minister stands up and talks, and becomes impressed with his own

fluff. The voice deepens, the reason sounds reasonable, the concern

sounds concernable, and the action sounds actionable. It certainly is

actionable.

In general terms we're talking about hundreds of millions of

dollars. One specific instance has been a matter of complaint for some

three years. This matter could not be dealt with by anyone to the point

that the ombudsman had to get involved. What were you doing for the

three years that this specific complaint was around? I've learned today

with joy, happiness and with unremitting pleasure that you've had an

internal audit saying, "Gee, we're not perfect." Hallelujah! The

government has admitted it's not perfect. I would have thought that a

brief view in a mirror would have made that self-evident. Nonetheless,

since that simple course could not be taken, you had an approach of

having a study to find out whether or not you're perfect. And guess

what? Lo and behold, they found the courageous bureaucrat who told them

they were not perfect. I hope he hasn't been dismissed.

I come back to the simple question to the minister. At any time

since you have been Minister of Finance have you initiated any specific

action to recover any moneys related to scaling problems from any

company operating in the forest industry in the province of British

Columbia? Once? Anytime?

HON. MR. CURTIS: Mr. Chairman, I indicated to the member

earlier this afternoon that the answer to that question would be yes.

Don't be surprised, Mr. Member. You and I go at this annually, whether

it's forestry or something else. I'm sorry if my voice deepens. It's

just that the eloquence of your questions rivets my attention.

MR. BARRETT: My God!

HON. MR. CURTIS: Well, you see, you get the same in return, Mr. Member. I'm going to miss you.

MR. BARRETT: This is a great exchange of love ballads, but let's have some information.

HON. MR. CURTIS: Well, Mr. Chairman, I'm surely allowed the same kind of eloquence.

MR. BARRETT: Certainly. Make love to me.

HON. MR. CURTIS: No, no, no.

[3:00]

Interjections.

HON. MR. CURTIS: I say again for the member who is conducting

the cross-examination this afternoon: yes, we are concerned about the

amount of revenue which comes to the Crown from the forest industry.

Again, we're concerned about money which is due to the Crown from any

other industry. But we are discussing forestry this afternoon, in the

debate on my estimates, the minister's office. Of course, the very fact

that an internal audit of the Ministry of Forests....

Let no one think that this is some isolated task force thing that moves in

on one particular ministry and then doesn't do it again. There is an internal

audit division of the Ministry of Finance — OCG, the office of the comptroller-general.

Frankly, I am pleased that officials of the office of the

comptroller-general aren't standing back waiting for the Minister of

Finance of the day to say: "Hey, isn't it about time you conducted an

internal audit on this activity or that activity in government?" They

take that upon themselves. They undertake those as they, as

professionals, see the responsibility to be. So for the member to ask

of me if there was one time that I had directed that there be an

internal audit — or an investigation, was the term he used.... He

shakes his head in the negative. Okay, I'll let him clarify. I became

so fascinated with the question, I've forgotten what it started with.

MR. BARRETT: Mr. Chairman. I'm sorry that my questions are

fascinating the minister to the point that he forgets what he said at

the beginning of his last answer.

I asked if he recalled if there were any specific instances where

billing had taken place for inadequate log scaling, or where money is

due because of inadequate log scaling.

I heard — and I probably heard incorrectly — the minister say "yes,

such instances had taken place." If I heard incorrectly, then ignore

the following question. If I heard correctly, can you give me a list of

companies who have been billed because of inadequate scaling?

Furthermore, you say that you're pleased that the ministry has not

stood back for internal audit. Well, I'm happy that you're happy, and I

want you to know that I'm happy that they haven't stood back. But in

their action — and go back to the simple question that I started out

with — have they specifically investigated the allegations related to

the Shoal Island case, which have been known to the government for over

three and a half years?

HON. MR. CURTIS: The member will know that the actual

collection of revenues from forests — the billing and the collecting —

is undertaken not by the Ministry of Finance but by the Ministry of

Forests. It may, therefore, be more appropriate that some of the detail

regarding billing and collecting be reviewed at the time of the debate

of the estimates of the Minister of Forests, which will occur later. I

indicated to the member, and say again, that certainly the government

has been concerned. I have been concerned, quite apart from the Shoal

Island case, for some considerable time as to the appropriateness of

the collection process and whether in fact revenues due to the Crown

are being collected in full, The member may find it tedious, but I have

to tell the committee again, as the member knows from his time, that in

the whole collection and stumpage process, expenditure through stumpage

is exceedingly complex. I think it is part of my responsibility to make

recommendations to government — which I cannot do this afternoon, but

which I will be doing in due course — as to how we can simplify that

process and ensure that all members of the House are more comfortable

with the collection and billing procedures. It may be that some changes

will be required. I don't know that yet. I can't reach that conclusion

thus far. Again, one can understand — and I think the Leader of the

Opposition will understand — that on a fairly regular basis someone in

the office of the comptroller-general, because of the sheer size of the

operation and the industry, would be in touch with someone in the

Ministry of Forests with respect to this question: is the Crown

receiving that which is due to it?

MR. BARRETT: Was someone in the Ministry of Finance in touch with someone in the Ministry of Forests

[ Page 3618 ]

regarding the Shoal Island case and complaint? Was

someone in the Ministry of Finance in touch with someone in the

Ministry of Forests concerning the questions regarding the complexity,

as the minister describes them, over collecting revenue from the forest

industry through royalties and through stumpage? Particularly, was

someone in the Ministry of Forests reached by someone in the Ministry

of Finance in light of the statements by the auditor-general, who said

that the methods of administration — of funding and billing in the

ministry — were not very good? If someone was in touch with someone,

would the minister tell us who that someone was from the Ministry of

Finance in touch with who that someone was from the Ministry of

Forests? And after someone met someone, was there someone's memo saying

"we have to take some action on this"?

The minister has a complex job. That's why he has employees. But

when it comes to collecting money, there is no problem with the

government chasing some small businessman who owes money on the social

services tax. I don't recall a case of someone going to the ombudsman

demanding that a social services tax be reviewed because the government

isn't collecting and that a report come to this House. When the

minister talks about the seriousness and responsibility of being the

Minister of Finance, no one could be more overwhelmed with the

seriousness of that job than people who had previously served in that

position. As a matter of fact, Mr. Speaker, I found that it was

advisable to say to the department: "If anybody owes us money, collect

it." We don't need a audit. We need collections.

For the government to have a Minister of Finance not collecting

money, particularly in a time of restraint, is a very serious problem.

I recall that my first experience in collecting money as Minister of

Finance related to revenue from the gas industry, where a previous

Minister of Finance and a previous administration was not collecting

enough money from natural gas. The first collection we made within

months was $22 million. Do you know how we made that collection? I gave

an order: Go get that money! I would feel a lot better today if the

minister assured this House that he operates on a philosophy that if

there is money due to the Crown, his orders are: "Go get that money!"

No one has a more hard-hearted task than the Minister of Finance, and

if you're going to be painted as a meanie, then we assume that you are

one when it comes to money owed to the people of British Columbia.

Mr. Speaker, this matter has gone on for years. Four years these

complaints have been laid out by the ombudsman. Since receiving the

ombudsman's complaint, I still haven't had any indication that you have

ordered someone in your department to go after this money. I have asked

you a series of questions, and I'd be happy to get the answers.

HON. MR. CURTIS: Mr. Chairman, the member spoke about: "Go

get the money." I certainly have indicated this on more than one

occasion in a variety of activities. However, "Go, get the money"

smacks of that which has been occurring in Ottawa recently, or which

has come to light in Ottawa recently. Frankly, I don't think it's good

enough — if I may say so, Mr. Chairman, through you to the committee —

to simply say: "Go get the money."

First of all, surely the member would agree, having served as a

Minister of Finance, that you have to find out if the money is owing.

Now with all respect to the ombudsman and the attention which has been

focused on his report presented to this Legislature — and it is not for

me to say in debate on my estimates whether he moved too quickly with

respect to the report — I feel obliged to pay far more attention to the

recommendations of the auditor-general of the province of British

Columbia in terms of accounting for dollars which are due to the Crown,

and therefore to the taxpayers of British Columbia. It is a fact that

the auditor-general appointed by this government has made specific

comment with regard to revenues from a variety of sources, and she has

been critical of some of the procedures which have been followed.

That's what I am attempting to tell the member, and I think the member

surely understands that I mean what I say. We had an internal audit — a

lengthy process; we recognize the complexity of the system.

I said a few minutes ago that it may be appropriate for the

collection system in the forest industry — and therefore in the

Ministry of Forests — to be changed, to be altered. It may be indeed

that because of the significance of that revenue, it should be more

directly associated with the Ministry of Finance than with the Ministry

of Forests, but that's not for me in isolation to say. I say it may be.

But the member knows, the committee knows and I know, Mr. Chairman,

that the auditor-general has spoken about the collection process in the

Ministry of Forests and in the forest industry. I am sure the member

knows as well that in the past few years this ministry has issued an

annual response to the report of the auditor-general. It may not

satisfy the member's line of questioning this afternoon, but I continue

to strive for the fairest and most complete system of collecting that

which is due to the Crown.

[3:15]

We are speaking about the forest industry. I have no proof, but I

would think that individuals who collect money under the Social Service

Tax Act will have been to the ombudsman from time to time. Certainly

you in your time and I in mine have signed a lot of letters where

social service tax appeals have been dealt with; where taxpayers —

those who collect the money — appeal, whether it is social service tax

or some other tax. That process is going on all the time. I wondered if

the now Leader of the Opposition had signed as many letters as I did,

and I asked because I wanted to know if W.A.C. Bennett and the Minister

of Finance from 1972 to 1975 and then my predecessor in this government

had signed so many letters of appeal. That's off the point, but of

course there is constantly dispute about money which is owing the

Crown. I don't want to head a ministry that rushes in....

I'm giving you your next argument, Mr. Member; I appreciate that,

but I don't want to be the Minister of Finance who just rushes in and

grabs the dough. I want to be satisfied — indeed I have to be satisfied

— and certainly I would think that the auditor-general would have to be

satisfied that the money which is collected is in fact due. I speak

again about the very significant complexity of this, not as a defence

but simply to keep it in perspective; and if it's complex now, then I'm

sure it was complex when that member was Minister of Finance. We're not

through yet with improving that system, and I'm not through in terms of

carrying a series of recommendations — some of which I've not even

finally reached a conclusion on — to government with respect to that

money and its magnitude and ways in which it can be collected in a

completely fair and straightforward manner.

MR. BARRETT: Mr. Chairman, I don't ask the minister to give

me further argument. I know you've got a complex ministry. When I say,

"Collect the money," I say, "Collect the

[ Page

3619 ]

money that is due." Any Minister of Finance worth

the salt in his brand new pair of shoes would collect the money that's

due. For example, when the minister talks about the former W.A.C.

Bennett's administration collecting money that's due.... Ottawa would

send the money to British Columbia by mail. British Columbia would then

get the cheque, sign it and put it in the bank. We were collecting

money that was due.

Mr. Minister, being a frugal mortgage-holder, I asked a simple question of

my staff, who are outstanding people: "Would it not be wiser, instead of

waiting for the mail to deliver the cheque, to put the money from the cheque

in the bank in Ottawa so that we make interest every single second?" Guess

what? No auditor-general, no big investigation, just an order from the Minister

of Finance saying: "Collect the money, and don't let the banks make

an extra penny off it." Was that unfair? Was that cruel or harsh? Not at

all. I was doing my job as Minister of Finance. I went home and told my wife,

and she said: "Oh, if you would only handle our finances at home in the

same manner!" With all that power and all that advice, it is necessary

to give the order: "Collect the money when it's due."

Mr. Minister of Finance, the case has been made specifically by the

ombudsman. It has been made in general terms, noteworthy of praise from

yourself, by the auditor-general. I asked you a simple question: name

the someone in your ministry who wrote the someone — whom I asked to be

named — in the Ministry of Forests to correct the problems raised in

general by the auditor-general. Specifically, have you instructed

anyone, someone — name desired — under "help wanted"...? Have you

instructed anyone to ask someone in the Ministry of Forests what

actions they've initiated to get this money back for the people of

British Columbia?

What I'm asking for is not systems. I understand the systems. I'm

asking if you've taken any action. Do you know of any specific case

that you took specific action on in regard to collecting funds, in what

appears to be — graciously speaking — an inadequate accounting system

in the Ministry of Forests? Have you taken any specific action to

collect money owing?

HON. MR. CURTIS: Mr. Chairman, the answer to the question is yes.

The member asks for names. Certainly if the member looks at the

organizational structure of the Ministry of Finance, he would know that

a primary responsibility for that rests with the office of the

comptroller-general. There would also be some responsibility within

Treasury Board staff which would work with contact individuals in the

Ministry of Forests.

If the member requires the specific names of individuals within the

two ministries, I can't provide that this afternoon. I don't have that,

but I have again indicated the routing of the kind of contact: OCG,

Ministry of Forests, internal audit. We have a director of internal

audit, and that name is also a matter of public record. That kind of

contact is something which was not triggered by Shoal Island. The point

I was trying to make earlier was that it has been going on for some

considerable time, and in all candour I have to say that I believe it

will be continuing for some considerable time.

MR. BARRETT: To your knowledge, do you know of any specific

case that has been triggered by the system described by you that has

required a rebilling on stumpage in the last four or five years?

HON. MR. CURTIS: I will attempt to get that specific information, in order to be completely accurate in answering the member, Mr. Chairman.

MR. BARRETT: Thank you. To be fair, I also intended to

include the Shoal Island case in that question. Has any specific

instruction gone from your department, through the existing machinery,

to collect money on the Shoal Island case?

HON. MR. CURTIS: Mr. Chairman, I think I indicated some time

ago that.... First of all, the Ministry of Forests does the billing and

the collecting — the member knows that. However, that is not to pass

off the responsibility which rests with the Ministry of Finance to

ensure that the billing is being done correctly.

With respect to Shoal Island, when I said earlier that I received, or became

aware of, the ombudsman's report on or about January 21, 1984, without doubt

I then wanted to await the completion of the investigation which was triggered

as a result of Mr. Mahood's letter to the Deputy Minister of Finance. I've

already told the committee that upon receipt of that letter, with allegations

which were tabled in the House, not in committee, the Deputy Minister of Finance,

without coming to me to see whether he should or should not, but understanding

the seriousness of the allegations, referred the matter to the Ministry of Attorney-General,

as he should. I received a copy of that letter indicating that allegations had

been made in the specific Shoal Island case. If those allegations had any veracity

whatsoever, they should be referred to the chief law enforcement officer's

ministry in this province, and that was done.

MR. BARRETT: Mr. Chairman, allegations had been made by these

logging contractors that they had not received a fair amount of money

for the work they had done. Included in that was the allegation that

the Crown had not received a fair return from the forests. Can the

minister tell the House when he was first aware of the Shoal Island

case? When was he first notified that there was a complaint? When was

he first aware that there was a problem — the approximate date?

[Mr. Pelton in the chair.]

HON. MR. CURTIS: Mr. Chairman, it would be difficult for me

to provide a precise date with respect to becoming aware of the Shoal

Island case. During our time together in this portfolio the Deputy

Minister of Finance and I have developed a pattern of meeting regularly

— not a staff meeting involving a number of people, but only the two of

us — during which meetings we discuss a variety of projects and

problems, and I would think it was in the course of one of those

meetings that I first heard the words "Shoal Island" in this context.

MR. BARRETT: Could you tell the House whether it was in the last year or two years? Do you have an idea when it was?

HON. MR. CURTIS: I'm reluctant to try to approximate, not in order to withhold information from the committee; but

[ Page 3620 ]

I would really have no way of being sure that that date is of any use at all to the member or to the committee.

MR. BARRETT: The specific date is of no use to me, but I

would like to know in general terms whether you recall if it was a year

ago or a couple of years ago or six months ago.

HON. MR. CURTIS: The member will know that I have always

tried to be an honourable member of this House in terms of giving dates

and information. I am very reluctant to approximate, because I could be

off by some months. But if it helps the member, some time in 1983.

MR. BARRETT: Yes, it does help me. It confirms that the

ombudsman's report was not the first time you were aware of this case.

I know the minister is busy, but the minister has said that these kinds

of complaints trigger automatic response within his ministry. I'm not

going to hold you to a specific time in 1983, but some time in 1983 is

fair. It's your own answer. During that specific time in 1983, to your

knowledge was the Deputy Minister of Finance triggered to pursue this

problem to see if money was owing to the Crown, in light of the

knowledge that your own internal audit had pointed out that Ministry of

Forests' processes for collecting money were not perfect and that the

auditor-general had indicated there were problems? My simple question

is: when that first came to the attention of the deputy, and when it

first came to your attention sometime in 1983, why was there not an

immediate memo to the Ministry of Forests? Or was there an immediate

memo to the Ministry of Forests concerning this case saying: "Hey, is

there money owing to us here?"

HON. MR. CURTIS: I think it's important to restate this. With

an internal audit of forestry revenue occurring roughly in the middle

of 1983 and with an internal audit process — again, not something that

has occurred only with respect to the Ministry of Forests — occurring

in the Ministry of Forests a couple of years before that — so I think

it has been twice in the last four years — and with internal audit

activities undertaken in other ministries as a natural course of events

and a part of the duty of the office of the comptroller-general, a

specific such as Shoal Island would not be the subject of a particular

directive from me or from the deputy minister, but rather would be

another indication of, as I said, the complexity of the collection of

revenues in the forest industry, revenues which may be due to the Crown.

[3:30]

MR. BARRETT: I understand what the minister said, and I don't

mean to be critical of the minister unless I have a chance — and, Mr.

Minister, you have given me that chance. I know what you want me to

believe, sir, but I don't intend to believe it. I don't intend to

believe that the Minister of Finance is as incompetent as he

self-describes. To follow through his series of answers, the minister

has stated to this House that there was an internal audit going on in

the Ministry of Forests. Very good. But part of the reason for the

internal audit going on were the responsible, critical statements of

the auditor-general.

Sometime in 1983 the Deputy Minister of Finance came to the minister and said:

"Sir, we have a problem of a complaint regarding Shoal Island." Having

heard that, the minister wants me to accept that his only action was to ignore

it because an internal audit was already going on. Now sir, through you, Mr.

Chairman, are you asking me to believe, this matter having been drawn to the

attention of the Deputy Attorney-General and of yourself, that the public would

have confidence in a government or a Minister of Finance who would say: "Well,

there's an internal audit going on, period"? Mr. Chairman, I want to

know why the deputy didn't automatically trigger — through use of the minister's

own description of his duties — a memorandum to the Ministry of Forests, saying:

"Hey, is money owed to us in this case, and if so how do we collect it?"

I don't want to believe that once this information was brought to the attention

of the Minister of Finance it ended there — the specific case, not the audit.

What I've been left to believe is that a signal was given to the minister

by the deputy minister that there was a problem in Shoal Island about the collection

of funds, and the minister did not act on that signal by specifically triggering

a memorandum to the Ministry of Forests, saying: "Can you please clarify

this?" If I am misinterpreting the minister, I sit to be corrected. But

my impression — through you, Mr. Chairman, and only through you, Mr. Chairman

— is that sometime in 1983, upon the minister's receipt of the information

from the Deputy Minister of Finance that there was a serious complaint regarding

Shoal Island, nothing was ordered by him regarding this case and nothing was

triggered by the deputy regarding this case. Is that correct?

HON. MR. CURTIS: No, Mr. Chairman, that is not correct. It may not suit the member's purpose this afternoon in his questions....

Interjection.

HON. MR. CURTIS: No, no, no. I'm not imputing motives.

MR. BARRETT: No, we're having conversations....

HON. MR. CURTIS: See how he interrupts? He is interfering with us.

MR. BARRETT: I'm listening and taking notes with devout attention.

HON. MR. CURTIS: No, you're not. It's a serious matter.

MR. BARRETT: Yes, it certainly is.

HON. MR. CURTIS: It is a serious matter, Mr. Member. Please

don't attempt to excuse what you perceive to be my lack of action by

saying: "I know you're busy." The fact is that we had been concerned

long before I'd even thought of Ian Mahood in this context. Long before

I knew that it was a matter that had been referred to the ombudsman, I

had been concerned because of the complexity, not because I was busy,

not because the Deputy Minister of Finance or the Minister of Forests

or the Deputy Minister of Forests didn't take their jobs seriously. The

damned process is very complex, and, Mr. Chairman, the member knows

that. It's judgmental in many respects. It is and has been the subject

of litigation over a good number of years: Who sold what? How much?

What was the weight involved? Where have they gone? It goes on

[ Page 3621 ]

and on. It is a very complicated process. I think in his heart of hearts the member understands that.

I instructed officials within the Ministry of Finance to pursue the

matter of Shoal Island with the Ministry of Forests. I didn't just walk

away from it — not that the member inferred that, but he did infer that

I was sort of too busy to really be concerned about it. At the same

time, there remains the much larger issue of the complex nature of

getting the amount of money due the Crown without simply riding

roughshod over everyone involved in the process. I think the member

also knows that.

The litigation reports which come to my desk on a regular basis show

the number of taxpayers — I use "taxpayers" in the broadest sense, not

individuals as much as corporations — who are suggesting that they will

take us to court, as is their right, or are in the process of taking us

to court. The member knows that there are taxation issues which go back

— correct me if I'm wrong — into 1976, '77, '78, '79. They've been

appealed.

MR. BARRETT: Some earlier.

HON. MR. CURTIS: Some earlier; okay. They go back many, many

years. One major department store chain in the country is still

probably going to take us to another court with respect to the sales

tax levied on catalogues. The member understands clearly.

I recognized then, and recognize now, the seriousness of the

possibility that the Crown is not receiving all that is due to it. But

you don't solve it in a week. With respect, Mr. Chairman, you don't

solve it in a month or six months; and in some cases, as the member and

I know, you don't solve it in five years.

MR. BARRETT: Mr. Chairman, just so we can total up the score

of everything we agree on, which is overwhelmingly in favour on the

disagreement side, we agree that collecting taxation relating to

forestry is very complex. We're in agreement that an internal audit on

the methods was going on. We agree with that. We agree that some cases

last for years and years. But we also agree that there was no

litigation in the Shoal Island case. Right? You did make the statement,

in the midst of all of your last answers — through you, Mr. Chairman —

that at some time in 1983 you instructed your department to check into

the Shoal Island case. Did you get an answer from that? Was it a memo?

Was that order followed by your department? Could you tell me what date

that order was followed and did you get an answer from that checking in?

HON. MR. CURTIS: Mr. Chairman, I indicated earlier that the Deputy Minister

of Finance and I, over time and on a regular basis, discuss a variety of matters.

I don't think there's a document I could produce for the committee this

afternoon to show that on a particular date I instructed the deputy minister

— in writing, signed "Hugh Curtis" — to pursue the Shoal Island thing.

I take it as a matter of course, when a problem is identified for me or a difficulty

is referred to me, and when it is discussed and action is to be taken, that

it's going to be taken. I can only repeat in this particular instance that

notwithstanding the longer-lasting and continuing review of the process of billing

and collecting by the Ministry of Forests, through the office of the comptroller-general

essentially, but not exclusively, there was one called "Shoal Island."

MR. BARRETT: Mr. Chairman, I heard the minister say that he

instructed his deputy minister to look into the Shoal Island case. I'm

not asking for a copy of that order, but I'm assuming that what the

hon. minister said is correct. You said to your deputy minister: "Check

into this." The words I have from your earlier comments were that you

instructed him to check into it. Did you get a report back on it?

HON. MR. CURTIS: Not a report as such, Mr. Chairman, because

it has been an ongoing.... We sit here on March 5. It's been an ongoing

review. Insofar as I know, the Deputy Minister of Finance and the

office of the comptroller-general halted their active pursuit of that

over a relatively short space of time following the indication by

correspondence, which has been tabled in this House, from Mr. Mahood to

the Deputy Minister of Finance alleging corrupt practice. Therefore,

until we have receipt of the investigation by the RCMP which was

ordered by the criminal justice

section of the Ministry of the Attorney

General, again over a short space of time, I think it's appropriate —

the member may disagree — that the review by the Ministry of Finance

would be temporarily suspended.

MR. BARRETT: Mr. Chairman, I couldn't agree more with the

minister. This seems to really be a hand-holding session. In stretching

out my hand in sympathy and compassion to the minister, I understand

fully that once the....

[3:45]

Interjection.

MR. BARRETT: Little Red's gone, eh? This is committee, Mr. Chairman. We're entitled to these little exchanges.

Nobody would expect the department to continue to investigate once

the police were in. Now that the police are gone, you will continue.

I'm trying to find out if in this extraordinary instance where a number

of charges were made — serious allegations leading to that letter by

Mr. Mahood causing the police to be called — and they were brought to

your attention sometime in 1983....

HON. MR. CURTIS: No, no.

MR. BARRETT: That's what you said. Okay, if the minister is

interpreting that somehow I'm saying that charges of criminal activity

were brought to his attention in 1983, that's not at all what I'm

saying. I'm saying that those were not brought forward to cause the

RCMP to come in until January 1984. Prior to that time there was no

mention of criminal activity, but there was a mention to you, by your

own admission, sometime in 1983 by the deputy that there was a problem

with Shoal Island and collecting revenue for the Crown.

From that sometime in 1983 an investigation was going on. Could the

minister tell the House who was doing the investigation? Was there a

preliminary report? With whom in the Ministry of Forests did that

person doing the investigation interview or discuss this problem?

HON. MR. CURTIS: Mr. Chairman, I'm pleased that the member,

in leading up to this question, clarified a point that could very

easily be misunderstood. On that date, which I

[ Page 3622 ]

can't precisely identify, when the Deputy Minister

of Finance indicated that there were difficulties with respect to

perhaps collecting that which is due the Crown on Shoal Island, that

was it. That was the extent of the concern.

Who in the Ministry of Finance dealt with the Ministry of Forests?

It would be the director of internal audit in the office of the

comptroller-general and the appropriate economic development director

in Treasury Board staff.

If the member wishes the names of the....

MR. BARRETT: No, it's okay. Just the positions.

HON. MR. CURTIS: Okay. Director of internal audit, office of

the comptroller-general, and the director or economic development in

Treasury Board staff. I could offer the personal names to the member

some other time.

MR. BARRETT: Would the minister undertake to find out who the

director of internal audit in the comptroller-general's department

spoke to in the Ministry of Forests?

HON. MR. CURTIS: Mr. Chairman, I will undertake to get the name of that position on the other side.

MR. BARRETT: Yes, the Minister of Finance has undertaken to

inform the committee who the director of internal audit spoke to

sometime in 1983 in the Ministry of Forests concerning the Shoal Island

case. Thank you.

Now that we have a statement from the minister that the director of

internal audit in the comptroller-general's department discussed the

Shoal Island case with someone in the Ministry of Forests, was no

report forthcoming? Did the Deputy Minister of Finance not bring this

case to your attention again? Did you ask for an updating on the Shoal

Island case after that one discussion?

HON. MR. CURTIS: I'd like to welcome the official critic for the Official Opposition, who....

MR. BARRETT: I'm sure you would.

HON. MR. CURTIS: No, no. I've enjoyed the exchange....

MR. BARRETT: We're not finished yet.

HON. MR. CURTIS: Oh, I'm sure we're not. Tomorrow, Wednesday, Thursday.... No, not Wednesday; I can't be here Wednesday.

MR. BARRETT: We're almost there.

HON. MR. CURTIS: No, no, we're not almost there. We're not

almost there, Mr. Chairman, through you to the member, because the

matter is not yet concluded.

MR. BARRETT: That's right.

HON. MR. CURTIS: You can say, "that's right," indicating

that you have your views of it, but I tell the committee that I certainly have

my views of that specific as well as the general problem associated with the

judgmental aspect, the debatable aspect, of collecting revenues in the forest

industry for the Crown, being fair to the industry, to the participants in the

industry and to the taxpayer. It is very easy to be heavy-handed about this

thing, but that doesn't necessarily mean that one is being fair, and I suggest

the committee would agree with that, Mr. Chairman.

As I recall the question, other than the time that the Deputy

Minister of Finance indicated there was concern with respect to

possible shortage of revenue or shortcoming in revenues due the Crown —

possible, I emphasize — at Shoal Island.... Of course, it was discussed

subsequently in the kind of meeting between the deputy minister and me

which I indicated before and which occur sometimes three times a week.

MR. BARRETT: Was there a subsequent discussion or was there

only one discussion? As I follow it through, you have informed the

House that it was brought to your attention that there was a particular

problem with Shoal Island sometime in 1983. At that time the deputy and

you discussed it, and you told the House that the director of internal

audit and the comptroller-general's department would then discuss this

particular case with the appropriate person in the Ministry of Forests.

That's what I've got so far. After that was triggered — to use your own

expression — was this subject ever raised with you again prior to the

ombudsman's report coming to your attention? Was this subject ever

raised to your attention again by the Deputy Minister of Finance or

anyone else?

HON. MR. CURTIS: By the Deputy Minister of Finance, Mr. Chairman. The answer to the question is yes.

MR. BARRETT: Oh!

HON. MR. CURTIS: The member seems surprised. The fact is I

indicated that on occasion the Deputy Minister of Finance and I would

meet once, twice or three or four times a week. There were a couple of

weeks in January, Mr. Member, where I took a holiday in Victoria.

MR. BARRETT: Good place to holiday.

HON. MR. CURTIS: Saanich is better — a great place to holiday.

I holidayed in Saanich, so there were two and a half weeks in

January when I didn't want to discuss anything with anyone, and frankly

I make no apology to the House or the committee for that. Yes, on more

than one occasion, from the time that the question of Shoal Island was

first raised until the matter was clearly under review by the RCMP, the

deputy minister and I did discuss Shoal Island and — this is the

important part to understand — the continuing difficulties associated

with accuracy and efficiency and fairness in the collection of revenues

by the Ministry of Forests — revenues passed to the Crown, to the

taxpayers, out of that industry. That discussion didn't just start

because of one isolated incident, and it will not end, as I indicated

earlier today, just because of one isolated incident or the resolution

thereof.

MR. BARRETT: Much to the chagrin of all of us, this has been

a matter of debate prior to parties even being formed in British

Columbia — the question of collecting adequate revenue from the

treasures, i.e., the trees, of this province. Of course, at no time am

I suggesting that the minister did not have an ongoing discussion, but

what I have been interested in finding out, and have found out, is that

the minister says

[ Page 3623 ]

that after the Shoal Island case was brought to his

attention sometime in 1983, that triggered an inquiry or some contact

regarding Shoal Island between the director of internal audit, the

comptroller-general's department and the appropriate person in the

Ministry of Forests. Then the minister says that there were subsequent

discussions around this complex problem of collection of forestry

stumpage, and in those discussions Shoal Island was mentioned a number

of times again. During the mentioning of Shoal Island a number of times

again, was the minister given any indication of what the director of

internal audit in the comptroller-general's department had learned from

the Ministry of Forests about this particular case?

HON. MR. CURTIS: I think, Mr. Chairman, that one of two

things has happened this afternoon: the member is mistaken on one

point, or I, unintentionally, misled the committee. We can check that

by reviewing the Blues.

The director of internal audit, either personally or by delegation,

and the director of the economic development side of Treasury Board

staff liaised, met and discussed the question of the collection and

billing procedures in the Ministry of Forests, but not specifically

because of Shoal Island. Somehow in the discussion this afternoon I

think the two have crossed. That was not: "Oh, oh, get someone from

internal audit to go to see someone in Forests, about Shoal Island

specifically, within the next four or five days." I did say, and I

repeat, that from time to time, from when I first heard of apparent

difficulties associated with scaling at Shoal Island, the Deputy

Minister of Finance and I discussed that. If I misled the committee

earlier — and I don't think I did — it was unintentional. The

relationship, the contact and the discussion between the OCG, the

director of economic development of Treasury Board staff and the

Ministry of Forests predates, I am quite sure, the first indication

that something might be incorrect at Shoal Island, because of the

auditor-general's report on scaling, stumpage, and so on, in general.

[4:00]

MR. BARRETT: Mr. Chairman, I'm afraid that in checking the

Blues we'll come to the same conclusion I did. The minister is now

telling the House that no "specific" triggering of looking at the Shoal

Island case took place. It's got to be one way or the other so I

understand exactly what I'm dealing with. The minister is now stating —

and the minister is honourable, and I accept that — that if it was

misleading or misinforming to the House before, we wash away that

record and start from square one. The minister is telling the House now

that no "specific" triggering of the Shoal Island case, through the

Deputy Minister of Finance down to the appropriate person in the

comptroller-general's department on to the Ministry of Forests, took

place. In other words, the conversation on Shoal Island between the

minister and the deputy minister ended there, in terms of a specific

examination.

HON. MR. CURTIS: No, Mr. Chairman. I've indicated that the

office of the comptroller-general, the director of internal audit and

the director of economic development. Treasury Board staff, were

earlier, and on a much broader basis, working with and reviewing the

practices in the Ministry of Forests on scaling, stumpage and the whole

thing — not Shoal Island specifically, not the interior, not the coast,

but simply the whole issue — as a result of the concerns which had been

expressed, i.e. the auditor-general's report.

Then there comes a day in 1983 when the Deputy Minister of Finance

first makes me aware of the specifics of Shoal Island. Have you got

that? I've already told the committee that that was not a one-time

discussion which was raised, discussed, dropped and then on to other

things. Of course, it was mentioned in subsequent informal meetings —

the kind of meetings which the member knows well would occur between a

minister and his deputy. Then, I would think, wrapped into the kind of

discussions which were already underway between Finance and Forests,

the specifics of Shoal Island would be raised. Later still, by the time

it was apparent that allegations were made regarding possible criminal

activity — and the member has already responded to this — the immediate

and specific review of that one area of British Columbia was, one would

say, not put on the back burner, but was at least suspended temporarily

until we had a police report indicating that there were or were not

criminal activities. As I told you earlier, Mr. Chairman, with the

receipt of that report we can again, as is our obligation, pursue those

issues that are specifically and directly related to Shoal Island.

MR. BARRETT: You see, Mr. Chairman, the minister is strong,

clear and precise up to a point, and then new words are being used —

and I take note of those new words. I want to follow through with what

the minister is saying. For some time, the minister tells us, there has

been an internal audit of this whole process. It took place last

summer. Correct? Okay. At a specific conversation between the minister

and his deputy, the minister mentioned the Shoal Island case....

HON. MR. CURTIS: The other way around.

MR. BARRETT: The deputy minister mentioned the Shoal Island case. Right.

Okay. Earlier on, I'm afraid that the House was misled into believing that

the minister then ordered the deputy to have the comptroller-general's

department look into this. You will recall, when I asked you that question,

that you said, "No, I haven't got that order in writing; no, I don't

remember the day," but he was ordered.

Now the words change; the words now are: "Then I would think that that specific of Shoal Island would be looked into."

Now my question to the minister is this: did you or did you not,

when this case was brought to your attention, specifically order an

investigation through the channels you have clearly outlined in this

House? Did you order that a report be prepared or an investigation take

place on the Shoal Island case?

HON. MR. CURTIS: Mr. Chairman, it is correct that earlier I

said that upon hearing from the Deputy Minister of Finance with regard

to apparent difficulties at Shoal Island, my response was not a memo,

not an order, not a directive, not an instruction, but simply the

reaction: "Well, will you look into it?" I assumed from that, as the

member would understand — and indeed more than assumed; I would know —

that it was pursued and is still being pursued, having been suspended

during this period of time while "alleged criminal activities" were

under investigation. But there should be no doubt about that, and I'll

look forward to reading the Blues tomorrow. I'm sure the member would

not play with the words that I've offered.

[ Page 3624 ]

MR. BARRETT: No, no.

HON. MR. CURTIS: Problem identified. Okay?

MR. BARRETT: Yes, right.

HON. MR. CURTIS: Much broader and more far-reaching

discussion is going on between the Ministry of Finance and the Ministry

of Forests with regard to this decades-old difficulty, as the member

himself has said, as to the accuracy, the fairness and the completeness

of getting revenues for the Crown from that industry. Then one pops up

— as they do from time to time — is discussed, and is discussed again

in the course of normal relationships between the deputy minister and

the minister while discussing 15 or 20 other items as well.

MR. BARRETT: Well, just so we end this — and I understand

it's tomorrow, or some time when you give me the answers — as I

understand it, what you've just said is that when this was brought to

your attention by the Deputy Minister of Finance you said: "Will you

look into it — i.e. Shoal Island?" So we know that sometime in 1983 you

triggered a request to your deputy to look specifically into Shoal

Island. Now we've got that. Did you get an answer at any time prior to

the announcement of the police investigation that one way or the other

the complaints were valid or invalid, and can you tell us who in the

Ministry of Forests was approached by your person from the

comptroller-general to explain this case? And were any written memos

whatsoever exchanged, or was this all conducted verbally, as you've

described?

HON. MR. CURTIS: Mr. Chairman, I do not know at this point in

time, and will provide for the member and the committee the name of the

individual or individuals in the Ministry of Forests contacted as a

result of this. As I understand the first part of the member's most

recent question, you asked whether the Deputy Minister of Finance came

back to me at some point in time and said there was something

absolutely, positively irrefutably wrong, or, on the other hand, that

there was absolutely nothing wrong.

MR. BARRETT: Or any report.

HON. MR. CURTIS: Now he interjects. I've already told the

committee that the question of a possible shortfall in a revenue to the

Crown at Shoal Island was discussed by the Deputy Minister of Finance

and me on several occasions. That's not new information for the

committee.

MR. BARRETT: Okay. You told him to look into it?

HON. MR. CURTIS: That was the first instruction or request:

look into it. But that report was never complete for the reasons which

I've stated. I'm surprised the Chair hasn't ruled me out of order for

being tedious and repetitious, because before the member and I

discussed this, when there were fewer members of the committee present

than there are now....

AN HON. MEMBER: We'd like to hear it.

HON. MR. CURTIS: Okay. I'll say it again. Some of these

matters take.... As the member himself acknowledged earlier, some

matters that are far simpler than the question of stumpage and scaling

revenues to the Crown take literally months and months to finally

resolve. So let's speak of the extreme. Let's say — and I'm sure it

isn't the case — that the Deputy Minister of Finance first told me

about Shoal Island in the middle of the year. Let's say I first heard

about it in July — and I'm quite satisfied that that would be very,

very early. The member knows that the matter could not possibly be

finally resolved in terms of thinking we were short this much money or,

alternatively, that there was no more money for us. That wouldn't be

done within five, six or seven months. Then the rest is a matter of

public record — namely, that a complaint was made, with certain

allegations. And I say again, the Deputy Minister of Finance then

correctly went to the appropriate senior official in the Ministry of

the Attorney General — not minister to minister, but deputy minister to

the director of criminal investigations in the Ministry of the Attorney

General — and said: "Look, these allegations suggest that someone has

been undertaking criminal activity." It was at that point that the

active pursuit of that specific was temporarily suspended by the

Ministry of Finance, and for good reason.

MR. BARRETT: Mr. Chairman, I think that the explanation at

the end.... Somebody from your department taking the letter to the A-G,

the alleged criminal investigation and then the investigation is a

matter of record. It was done in writing, as a matter of fact. What I'm

trying to get at is this: was there nothing in writing on the Shoal

Island case in your department before that? Is there nothing on file on

Shoal Island in your department anywhere? Is there anything in writing

on a complaint re Shoal Island, to your knowledge, before the

conversation of, say, July 1983?

HON. MR. CURTIS: No, no, I used that as an example.

MR. BARRETT: Well, you say that the first time it was brought to your attention was some time in 1983.

HON. MR. CURTIS: Yes, right.

MR. BARRETT: Okay. To your knowledge, was there anything in

writing complaining about this case before it was brought to your

attention — say, six months or a year or a year and a half ago? Could

you find that out for me?

Is there any written record, memorandum or exchange of

correspondence that you know of that exists between your department and

the Ministry of Forests after this case was brought to your attention?

Was there anything in writing from our department, and in return from

the Ministry of Forests, about this case? Or was it all a verbal look

for that period of time before it was halted because the police were

called in?

[Mr. Strachan in the chair.]

HON. MR. CURTIS: Mr. Chairman, I will review and determine if

in fact there is anything in writing. But I make he point again, that

as is appropriate — and I find it most effective — it is not good

enough for a minister to sit in splendid isolation. Continual, ongoing,

regular meetings with the deputy are the most productive way in which

to carry

[ Page 3625 ]

out the work of the ministry and, therefore, the work of the people.

MR. BARRETT: Would the minister undertake to table that correspondence in the House.

[4:15]

HON. MR. CURTIS: Well, it's a hypothetical question, Mr.

Chairman, and I'm not going to make much of the fact that you can't

table in committee, as the member well knows. It's a hypothetical

question, because I said I would look to determine what there is. I'm

sure these estimates will continue to be debated tomorrow and the next

day. I'll take that under consideration.

MR. BARRETT: You'll take it under consideration and perhaps give an answer tomorrow? I'll conclude my questions until that time. Thank you.

MR. REYNOLDS: Mr. Chairman, I hadn't really planned to get up here and get involved in this committee, but....

MR. BARRETT: Then sit down.

MR. REYNOLDS: The Leader of the Opposition says: "Sit down." Well, really....

MR. BARRETT: You hadn't planned to get up, so what are you getting up for?

MR. REYNOLDS: He didn't let me finish my sentence.

It's either a choice of sitting here and reading the annual report

of the Ministry of Transportation and Highways or getting up and asking

questions.

MR. BARRETT: Well, make your choice.

MR. REYNOLDS: If you've seen that report, you know why I'm standing up here right now.

Mr. Chairman, the Leader of the Opposition spent a lot of time

questioning the Minister of Finance on this Shoal Island situation. I

don't question what he's doing as Leader of the Opposition. He probably

thinks it's the proper attack to make. Maybe if he can try to dig

something up against this government before he leaves his many years of

service to this province, then maybe he thinks he's doing the best

thing. But in question period today the Leader of the Opposition talked

about the government asking the RCMP for an investigation....

MR. BARRETT: Mr. Chairman, on a point of order, I would be

happy to debate my estimates when they are called, but we're dealing

with the estimates of the Minister of Finance. Should the House wish to

go to my estimates I'd be happy to oblige the member. But shall we stay

in order?

MR. CHAIRMAN: The point of order as stated by the Leader of the Opposition

is well taken. We are discussing the estimates of the Ministry of Finance. Therefore

we will discuss the administrative actions of that department. Please proceed.

MR. REYNOLDS: Mr. Chairman, I respect that, but I also have

to make some comments. The Leader of the Opposition has a very thin

skin when he doesn't like us to comment on what he's already been

talking about.

MR. CHAIRMAN: The Leader of the Opposition on a point of order.

MR. BARRETT: I am never thin-skinned about the rules, through you, Mr. Chairman. I ask you to apply the rules.

MR. CHAIRMAN: Good point of order, thank you. The personal

reflections should also be avoided. We are discussing the estimates of

the Minister of Finance. The member continues.

MR. REYNOLDS: The Leader of the Opposition is never worried about the rules except when they are put on himself, Mr. Chairman.

MR. CHAIRMAN: Order, please. To the estimates.

MR. REYNOLDS: I would like to congratulate the Minister of Finance for the great budget and I wish him godspeed....

I was at a meeting in my constituency this morning and I couldn't....

MR. LAUK: Where did you hold it? In a cab?

MR. REYNOLDS: No, we held it, if you want a free ad, at the

Ambleside Inn in West Vancouver, which is a very nice place to go for

breakfast, lunch and dinner, if you happen to be out in the area.

There were about 120 people there. In my talk this morning I was

stressing the activities of the Minister of Finance in his budget and

some of the items that were in that budget. One of the the things that

I think is so important in this minister's estimates, Mr. Chairman, is

that for the first time in 31 years the provincial budget has been

reduced from the previous year. I think the people I was speaking to

this morning were appreciative of that fact and of the job that the

Minister of Finance has been doing in running his department. I think

the general consensus from those people was that if the Minister of

Finance of this province could convince the other nine ministers of

finance to bring in the same type of budget that he had brought into

this province, this country would be better off.

MR. CHAIRMAN: I really must comment once again that we are

reflecting now on a previous vote which has already been taken by the

House. We are in Committee of Supply now discussing the estimates of

the Minister of Finance, a discussion that clearly has to be centred

around the administrative actions of the department and not other

legislation or other matters that come before the House.

MR. REYNOLDS: Mr. Chairman, being such a new member, I wonder

if you could define what the Committee of Supply is so I don't go

outside the guidelines that you would like me to go under.

[ Page 3626 ]

MR. CHAIRMAN: Let me just quote from Sir Erskine May, since

you are asking for some assistance. Sir Erskine May advises us that the

Committee of Supply does not afford the proper opportunity for

discussing which minister should represent the government with respect

to estimates under consideration but does allow us to discuss the

administrative action of the department which is open to debate. We

cannot discuss the necessity for legislation in matters involving

legislation; nor can the actions of high public service be criticized.

Therefore I will advise the member that it is incumbent upon all

members of the committee to discuss only the administrative actions of

the department whose estimates are before us, which at this time is the

Ministry of Finance.

MR. REYNOLDS: Thank you, Mr. Chairman, for those enlightening

remarks. If I had known we were that confined, I probably would have

been jumping up and down when the Leader of the Opposition was up.

I would just like to congratulate the Minister of Finance on the way

he runs his department and on the way he answered the questions from

the Leader of the Opposition today — the leader of that party that

tries to find things under rocks that aren't there. He's done a great

job in his department. His staff has done a great job, and I guess it

would be proper when talking about the administrative ends of his

department to congratulate Mr. Larry Bell, who has done such a great

job as the deputy minister in this province.

MR. BARRETT: No names.

MR. REYNOLDS: I don't mind giving his name out, because I

think it's a credit to this province that we had such a fine individual

in that job. I wish him great success in his new job helping the credit

unions straighten themselves out. I know he'll do a great job for them

also. So congratulations to the minister and his staff for the great

job they've done, and continued good work, from the constituents of

West Vancouver–Howe Sound.

MR. ROSE: Mr. Chairman, I doubt that I'll be able to equal

the praise extended by the last speaker, but I'll try not to be

grudging or ungenerous; it's not part of my temperament or personality.

Because of some conflicting reports, I was interested in examining

with the Minister of Finance whether or not the province of British

Columbia received a larger amount of established programs financing act

funds this year than in the previous year.

HON. MR. CURTIS: Mr. Chairman, I wonder if I'm not

constrained somewhat from answering that question because of

legislation before the House. I look to the Chair for guidance.

MR. CHAIRMAN: The minister has indicated that we might be

offending the rule of anticipation. However, perhaps the hon. member

for Coquitlam-Moody could enlarge upon his question or rephrase it.

MR. ROSE: Well, it seems to me that all details concerning

the amount of money this province receives in terms of income and

expenditure are intended to be outlined within the budget. What I'm

asking about, simply, is.... The income through transfer payments is

received through EPF funding each year from the federal government. I

know there's money going the other way because of the tax rental

arrangement — that's what it used to be called in any event — so what

I'm interested to know is whether or not the anticipated revenue in

this budgetary year from the federal government through EPF will be

increased. If so, the next question would be by how much.

MR. CHAIRMAN: The question, I guess, is in order if the

minister feels it in order. However, there are other ministries that

might be better prepared to answer that question, but the committee

must leave that answer to the Minister of Finance.

HON. MR. CURTIS: It's a fine point, but there are those at

the federal level of government who hold the view that a specific

percentage of EPF is designated for health and a specific percentage is

designated for post-secondary education. That was where I was having

the difficulty, because it is a block transfer, and the legislation in

front of the House deals with the health portion and the federal

underfunding of EPE. I reject the argument — not that the member has

advanced it — that when EPF was established, particularly for 1977, and

renewed in 1982, there was a division between the money for health and

the money for post-secondary education. It is a block transfer.

MR. ROSE: I fully understand that. On the one hand, the

minister has told us that he rejects the idea that any part of EPF can

be designated for health purposes, and then, just a moment ago — and in

his budget — he made a great deal about the underfunding for health. It

seems to me that the minister cannot have it both ways. I am not asking

at this time what portion of the EPF goes for health or education; I'm

asking if the total amount of transfer received from the federal

government in transfer payments under EPF is larger in this reporting

period or year than it was the year previous.

HON. MR. CURTIS: Mr. Chairman, we can continue that debate

some other time, but I would refer the member to page 8 of the

estimates, which shows under the heading "Contributions from the

Federal Government" the 1983-84 estimated amount of $793 million, the

revised forecast — because the member and the committee will know that

it's a constantly fluctuating number, based on tax transfer and cash —

of $935 million; and our estimate for 1984-85, the year which is now

under debate in committee, on the same page under EPF, is $871 million.

So blue book over blue book, the answer would be that the estimate is

higher by some $78 million, but lower than the revised forecast for

1983-84.

MR. ROSE: Mr. Chairman, the estimated figure that I have

received, through the kindness of the federal Minister of Finance, is

$127 million, not $78 million. I wonder if the Minister of Finance of

British Columbia sitting opposite us would help us clarify and

reconcile the difference between these two estimates.

HON. MR. CURTIS: Mr. Chairman, I'll just pull some

information in order to be completely accurate for the member and the

committee. While I'm waiting I would say that I'm not sure that I would

agree that the information provided by the federal Minister of Finance

is done not as a act of

[ Page 3627 ]

kindness to anyone provincially but rather to

support his case, one which even that member's associates in the

province of Manitoba take issue with.

In order to save the committee time, Mr. Chairman, if the member

will be here tomorrow I will undertake to have that information for him

in our morning sitting. I don't have it readily available in the House

this afternoon.

[4:30]

MR. ROSE: I would certainly be grateful for the accurate

figures, because that is an extremely important basis for any

discussion that we might have.

The part that concerns me is that the minister made much in his

budget about the fact that B.C. has been deprived of certain funding by

the new arrangements which took place in 1982. We all know that block

funding under the EPF — with the congratulations and great enthusiasm

of the provinces — was abandoned. Accountability for health and

education was abandoned in 1977, with the support of the provinces. We

are aware of that. The minister gave us a little history lesson here,

and also — Mr. Chairman, I see you getting a bit edgy — in his budget.

I don't think I am really skirting the bounds of good order.

In any event, the minister said in the budget that B.C. is being

shortchanged because of a new formula in 1982. Over the years that's

going to be true. I don't think there's any doubt about that. The feds

have backed off in their contributions totally over the four years, and

I think it amounts to about $3 billion or $4 billion across Canada, not

in this province alone. But the case has been made that there will be

$127 million coming to B.C. in addition to what we got last year.

I want the minister to tell me whether or not he agrees with that,

because it has some profound implications for both Health and

Education, which he has used and discussed in his budget, and now. It

is block funding, and you don't have to account for it. It doesn't have

to go to Health or Education, but the crucial question is that it was

given originally for health and post-secondary education. If it is

going directly to those two demands, that's one thing. If it is being

diverted to something else in roads and sewers or coal-mines, that's

quite another thing, especially when we are going to be asked in this

legislation — and now I am anticipating — to provide the minister with

the basis for taxing us 8 percent for health care.

MR. CHAIRMAN: Yes, that does offend the rule of anticipation. Further, as had to be pointed out to the member for West Vancouver–Howe

Sound (Mr. Reynolds), we cannot reflect on a previous vote — namely,

budget discussions. Administrative actions of the ministry are open for

debate in this committee.

HON. MR. CURTIS: I believe my first reaction was correct,

that the committee might be offending.... I believe it to be correct;

the Chair, of course, will determine otherwise, I know. I find it

difficult to discuss the amount of money which the federal government

sends to the provinces without intruding into the debate which can be

raised when we have the bill before us that speaks of federal

under-funding and the necessities of provincial action to counteract

that. That's the problem I have. I would like to speak at great length

this afternoon on that subject. It is not just a question of B.C.; it

is a question of all provinces. We are unanimous in this regard. I

think, Mr. Chairman, that there will be an opportunity on one

section

of that bill — if not in second reading debate, then certainly in

committee stage — where I may talk the member out of the House in terms

of boring him. I have some very strong feelings, but I just don't think

I can do it in debate on my estimates.

MR. CHAIRMAN: The point by the minister is well taken. Of

course, it also follows that as this funding impacts on other

ministries, there is another appropriate forum for that type of

discussion. I am sure the member is aware of the concerns that the

committee has. Please proceed.

MR. ROSE: I am certainly aware of the concerns the committee

has, and I am certainly aware of the concerns that the minister has,

and rightly so. I would ask the Chair, though, since part of this money

goes to Health and that makes us run up against the rule of

anticipation — suggesting that a discussion on the Health side of it

would be better delayed until the bill is before us.... The minister

does threaten to talk us all out of the House at that point.

HON. MR. CURTIS: Oh, no, just you, Mark.

MR. ROSE: Oh, I hope not for the same reason you were talked out of the House a moment ago.

Nevertheless I am quite sure that since part of those funds go to

Education, and there is no post-secondary education bill before us, we

are not defying the rule of anticipation. I wonder if the minister

agrees then with the federal minister when he says that not only did

the ministry or the government receive $2 million more this year than

last year for what would traditionally have been pre-1977, pre–block

funding post-secondary education fund, but in addition to that it was

made even worse by the fact that the province and his ministry deprived

the post-secondary education field of an additional $27 million. That

means fees have to go up, courses have to be cut and teachers and profs

in the colleges have to be fired. Does he agree or does he not agree

with the Minister of Finance in that assertion?

HON. MR. CURTIS: Mr. Chairman, it is the federal Minister of

Finance who made much of providing more money to the provinces, and at

the December 7 or 8 meeting of federal and provincial Ministers of

Finance and Treasurers in Montreal, I found it offensive to be one of

ten recipients of a letter from the federal Minister of Finance saying:

"Surprise! We're increasing the grant to the provinces under EPF." To

the member, through you, Mr. Chairman, I was not alone in responding on

behalf of the provinces to the ludicrous aspect of that "sudden money"

— the windfall, which it has been described as. Certainly the Minister

of Finance for Quebec and the Provincial Treasurer for Ontario and, I

think, the Minister of Finance for Manitoba and others were offended by

the fact that a formula produced more money than the federal government

had anticipated. That's why I again refer to the revision that is shown

here. It is a formula, Mr. Member. You understand that, and I am not

suggesting that you don't. The federal government underestimated the

product of the formula and then had the nerve, when the formula

produced more money, to say: "Well, we've decided to give you more

money."

If you have a formula, it's going to produce X, and they had

estimated that it would produce X minus something. So that particular

meeting, which dealt essentially with EPF, and

[ Page 3628 ]

within EPF essentially with health.... That's where

we have our problem with anticipation, but let's just try to avoid it

for the moment.

MR. ROSE: I'm not talking about health anymore. It's education.

HON. MR. CURTIS: Okay. The fact of the matter is that EPF

money for health and post-secondary education is assigned to those

purposes to a greater extent than the money that is actually received.

It's a net loss situation for British Columbia, and for other

provinces. The member said he hoped it didn't go for roads or sewers or

whatever else. It certainly doesn't. It flows through consolidated

revenue — through CRF — and then is expended for those purposes. One

only needs to look at our expenditures in health and post-secondary

education to realize that.

MR. ROSE: Well, that's precisely why I asked those questions.

I think we needn't be surprised if suddenly more money is found at a

certain period of time. I can remember — and you will remember too —

that a lot more money, I think around $10 million, was found for

education just before the last provincial election. But that's not the

question. The question is that in total, yes, the funds are going to be

down over the 1982 legislation.

HON. MR. CURTIS: And over '83-84.

MR. ROSE: Yes, but I'm quite sure that '83-84 or '84-85 is up

$100 million or more over the previous year. That's the point I was

trying to make, but that's one you're going to give me the details on

tomorrow morning — that's what you promised me — because there was a

difficulty in reconciling the figures of the Minister of Finance for

Canada with the ones which I've been able to receive out of the budget.

That's not the point. I agree it's down in total.

I have just a couple of short questions. The minister said he

doesn't agree with the '82 formula. I could go into the history of what

happened in '77 and why it happened, but again.... The minister spoke

about boring the House. I don't want to try to win that championship,

or take that cup away from him on that matter, but I want to know

whether the minister wants to renegotiate EPF. If so, what would his

intentions be other than just to receive more money out of EPF?

HON. MR. CURTIS: Mr. Chairman, I'd like to see a couple of

things. First of all, I would like to see an end to unilateral activity

under the EPF system, which was initially negotiated in '77 and

renegotiated in '82. If I could, I would refer the member briefly to

the historical reference that I made under the heading "Health Care

Funding" — but it applies to EPF, to the block funding — starting on

page 13 of the budget, and carrying on. I would like to see an end to

the unilateral changes that Ottawa has taken recently. If we could turn

the clock back to '77, I suppose we would find ways in which we could

improve the original formula. In '82, of course, there were significant

difficulties in the renegotiating period. The member nods his head in

agreement. I happen to think that provincially, across the country,

those views transcend partisan politics.

What would I like to see? I would like to see a renegotiation of

EPF. I would like to see a clear commitment on the part of the federal

government, and it is much more than just a question of more money.

That is important, particularly when one analyzes the dramatic

escalation in the costs of health care in this country; in debate on a

bill I could speak about that. But it is far more important than just

more money. It is predictability and stability and an understanding

that both levels of government have a share in these particular

activities — i.e., health care in all its forms, and post-secondary

education — in terms of providing the dollars. I don't think that's too

much to ask for, frankly. No more unilateral activities. No more "We've

decided for these reasons to change the rules," and then in the case of

health care, as an example, saying: "However, we want you provinces to

take on more responsibility, you who are trying to starve the system."

So an end to that kind of nonsense at the federal level, and then

stability so that we can do our forecasting and assist the ultimate

recipients of that money, whether it's federal or provincial in origin,

and give them a degree of predictability and stability. I would think

the member would agree with those goals.

MR. ROSE: Mr. Chairman, I agree that any recipient of funds

from another source, in order to carry out proper planning, has to have

some idea of how much money they will have over the short and longer

runs. I don't have any problem with the minister there. The colleges in

B.C. have that problem, though, because they don't know what they're

going to get over the short and long run. They have the same need for

that kind of planning data as does the ministry.

Interjection.

MR. ROSE: Right. They need it here, though, too. What you

want from the federal government, Mr. Minister, through you, Mr.

Chairman, is exactly what the colleges want from the ministry: to know

where they are so that they can plan. I've got documents to show that

that has been denied them up to now, and I hope that what's good for

the goose, to coin a phrase....

One last question. The minister wants no more unilateral activities.

He has told us he wants further to know what he's going to get out of

the formula year by year so you have stability and predictability.

Would the minister be prepared to return to the dollar-for-dollar

accountability business which the government of the province was so

anxious to abandon in 1977? You said it was non-partisan. As far as

B.C. getting its share, it is non-partisan; certainly we want B.C. to

have every cent due to it from the central government. I'm not standing

up here trying to defend the actions of the federal minister or his

predecessor — I spent long enough debating and fighting them not to

suddenly want to switch sides some way and defend them — but the point

is, as I see it, that when we did have accountability and a

dollar-for-dollar federal-provincial sort of equation in the pot, the

provinces were the ones most anxious to get rid of it. My party fought

it on the grounds that the poorer provinces would divert money away

from health care, because they felt they had their own priorities and

they were short of money.

[4:45]

It turned out it wasn't the poorer provinces that did that; it was

the rich provinces — the Ontarios, Albertas and British Columbias. If

we had dollar-for-dollar funding and accountable funding — I know the

accounting is very difficult — then everything would be out in the

open, there would be no

[ Page 3629 ]

suspicions of federal money that was for education

being diverted into roads, sewers or whatever, because then we would

know because we would have an accounting of it. Will the minister in

future negotiations of the problem be advocating a return to the

accountability principle where the feds and the provinces will be

charged dollar for dollar for post-secondary education and health?

HON. MR. CURTIS: Mr. Chairman, I don't think I would have

tremendous difficulty with that, but I would want certain conditions

very clearly laid down. The member in his remarks alluded to some of

them. There is an attractiveness of fifty-cent dollars, and too often,

I think, we start salivating when we're shown them. The member also

nods in agreement on that: hey, it's only going to cost us, the

provincial treasury, 50 cents to do a certain thing! If it were laid

out very firmly and not subject to change, then I think it would be

worth examining. EPF, Mr. Chairman, through you to the member, is an

extremely complicated formula. I say that not putting myself in that

elite group of those who fully understand it, which is quite an

admission for a minister to make. My colleague, Jacques Parizeau in

Quebec, has said a couple of times that there are probably only four or

five people in the country who understand the entire formula that is

known as EPF.

MR. ROSE: And Tommy Shoyoma is no longer around.

HON. MR. CURTIS: And Tommy Shoyoma is no longer with them; he

is here. But I confess to this committee, I don't understand every

single nuance, detail and factor in EPF transfers from the federal

government to the province. I try, and every year I hope I pick up a

little more, but I think that one of the things for which we should

strive is an element of greater simplicity in that particular transfer

process. That, I think, would assist not just those of us debating in a

committee such as this or in the Parliament of Canada, but it would

help the people who pay the bills at the federal and provincial level.

It would help them as well, to say nothing of the recipients of the

money which is generated — those who pay the bills and those who

receive the money for a particular activity: health or post-secondary

education. What the member has advanced, Mr. Chairman, is not something

that I would strenuously resist and absolutely dismiss out of hand.

MR. ROSE: Would you advocate it?

HON. MR. CURTIS: Yes, I would be willing to consider advocacy, but I really want to watch my back every step of the way.

MR. ROSE: You have to now.

HON. MR. CURTIS: I agree. I would certainly want to be in a

position where, in the final analysis, some wrinkle in the formula or

some last-minute change at the federal level wasn't imposed upon us.

The member might say: "You can certainly satisfy yourselves — you, the

provinces — before you put pen to paper." But we saw that that didn't

work in the past. So once bitten, twice shy.

We've got to have a better system. I don't pretend this afternoon in

this capital city to have laid out all the ways in which the system can

be improved. But first of all, if you sit down to have a friendly game

of bridge, you at least want to be assured that the others are playing

by the same rules. I think that's the major deficiency that we have. I

refer again to the grand announcement in December in Montreal — here's

more money for you — with nothing approaching an admission that the

formula produced more money. The formula was there, the formula was in

place, and it was going to produce so much money. Then to have the

nerve to announce it as federal benevolence is insulting, I think, to

all the people of Canada.

MR. PASSARELL: Mr. Chairman, I have about five constituency

questions to address to the minister. Three of these you took as notice

more or less. I don't think it was notice; it was during the last

estimates, and you said you'd get back to me.

The first one was regarding the sales tax exemption for the northern

communities that are on the B.C.-Yukon border. You said you'd get back

to me regarding that. There was mention made in the budget speech

regarding free ports, and I was wondering if something could be tied in

for communities, as we addressed this problem earlier, like Atlin,

where businesses are losing out to the Yukon because there is no sales

tax in the Yukon and people are finding it's just as easy to drive 30

miles across the border to buy items. I know it's a very difficult

situation, as my hon. friend from the East Kootenays speaks about

individuals going into Alberta an