2005 Legislative Session: 6th Session, 37th 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, FEBRUARY 21, 2005

Afternoon Sitting

Volume 27, Number 13

CONTENTS

Routine Proceedings

Page

Introductions by Members

Tributes

Giani Sant Singh Maskeen

J. Brar

Statements (Standing Order 25 B )

Christine Dickinson

D. MacKay

Pacific NorthWest Economic Region

B. Penner

Safe school programs

L. Mayencourt

Oral Questions

Lease of B.C. Rail to CN Rail and

comments by Liberal MLA

J. MacPhail

Hon. K. Falcon

General election and length of

legislative session

J. Kwan

Hon. G. Bruce

Acute care services at Surrey Memorial

Hospital

J. Brar

Hon. R.

Coleman

Hon. S. Bond

Release of comptroller general report

on Columbia Basin Trust contracts

E. Brenzinger

Hon. R.

Neufeld

Vancouver agreement

V. Anderson

Hon. M. Coell

Reports from Committees

Select Standing Committee on Public

Accounts

Annual

Review of Auditor General Reports

J. Kwan

Tabling Documents

Environmental Appeal Board, annual

report, 2003-04

Committee of Supply

Supplementary Estimates (No. 2): Ministry of

Forests

J. MacPhail

Hon. M. de

Jong

G. Trumper

Introduction and First Reading of

Bills

Supply Act, 2004-2005 (Supplementary

Estimates No. 2) (Bill 9)

Hon. C. Hansen

Second Reading of Bills

Supply Act, 2004-2005 (Supplementary

Estimates No. 2) (Bill 9)

Hon. C. Hansen

Committee of the Whole House

Supply Act, 2004-2005 (Supplementary

Estimates No. 2) (Bill 9)

Report and Third Reading of Bills

Supply Act, 2004-2005 (Supplementary

Estimates No. 2) (Bill 9)

Committee of Supply

Supplementary Estimates (No. 3): Ministry of

Agriculture, Food and Fisheries

J. MacPhail

Hon. J. van

Dongen

Introduction and First Reading of

Bills

Supply Act, 2004-2005 (Supplementary

Estimates No. 3) (Bill 10)

Hon. C. Hansen

Second Reading of Bills

Supply Act, 2004-2005 (Supplementary

Estimates No. 3) (Bill 10)

Hon. C. Hansen

Committee of the Whole House

Supply Act, 2004-2005 (Supplementary

Estimates No. 3) (Bill 10)

Report and Third Reading of Bills

Supply Act, 2004-2005 (Supplementary

Estimates No. 3) (Bill 10)

[ Page 11999 ]

MONDAY, FEBRUARY 21, 2005

The House met at 2:04 p.m.

Introductions by Members

Hon. S. Brice: Visiting us in the gallery are two of my

constituents, Luka and Jade Kapac. They're in the House today visiting their

daughter Martina, who is executive assistant to the Minister of State for

Intergovernmental Relations, and their son Dom, who is a caucus communications

assistant. It's a special day for the Kapacs as today marks the celebration of

their thirty-second wedding anniversary. I ask the House to please make them

welcome.

R. Visser: In the House are Jim and Arlene Harris, friends

of mine from Campbell River. They're doing what all grandparents do best.

They're down looking after their grandchildren. I know that as a parent I count

on my daughter's grandparents day in and day out to get me through busy days. I

wish the House would make them welcome.

[1405]

J. Bray: Joining us in the gallery today is someone I've

had the pleasure of introducing several times: Terry Colburn, who is a mental

health advocate here in the Victoria area and who also goes by his native Navajo

name of Iskaital. I ask the House to make Terry very welcome.

K. Krueger: The members of the government caucus who have

to liaise with the government caucus Whip's office have a lot to do with my

executive assistant, Erin Darling, and they know that she is named by nature — a

wonderful person. In the House today is the woman responsible for the way she

turned out, in large part. That's her mother, Barbara Darling, and I'd like the

House to make her very welcome.

Tributes

GIANI SANT SINGH MASKEEN

J. Brar: Last week, on February 18, 2005, Giani Sant Singh

Maskeen, a great thinker of our time and a dedicated Sikh missionary, passed

away, leaving behind a great void for the Sikh community worldwide. A spiritual

leader of great stature, Giani Maskeen inspired many for nearly five decades. He

was a man of inexhaustible knowledge and repute.

I ask the House to join me in sending condolences to the Sikh

community in this time of great loss. I hope everyone can find comfort in the

thought that long after Giani Sant Singh Maskeen's departure he will be

remembered as a rare visionary and a leader whose life was a true gift to

humanity.

Introductions by Members

B. Penner: I have the happy opportunity today to make a

number of introductions. First of all, I am pleased to welcome back to the

Legislature a mayor who is a real pleasure to work with, Mayor Sylvia Pranger

from the district of Kent. She's joined by councillor Mel Jorgensen as well as

Bev Kennedy, director of the Fraser Heritage Society, and Marion Robinson from

the Fraser Basin Council, who will be meeting with the Minister of Small

Business and Economic Development later today.

Also in the gallery are 36 visiting Washington State legislative

interns, accompanied by their program coordinators, Judi Best from the senate as

well as Joan Elgee from the statehouse. They're accompanied by Dr. Nancy Taylor,

from Evergreen State University, and her husband, retired professor Dr. Fritz

Taylor. This year the Washington State interns are celebrating their program's

fiftieth anniversary. I ask the House make those people welcome.

In addition, and carrying on in the cross-border theme, today the

Pacific NorthWest Economic Region has been holding a number of meetings in the

capital. That's led by Matt Morrison, the executive director of the Pacific

Northwest Economic Region; and the PNWER president, Rob Renner, an MLA from

Medicine Hat, Alberta, and Alberta's Minister of Municipal Affairs. I ask the

House please make all these people welcome.

Statements

(Standing Order 25

B) CHRISTINE DICKINSON

D. MacKay: Today I'm standing up to honour an outstanding

and inspirational member of Bulkley Valley–Stikine's educational community.

Smithers Senior Secondary principal Christine Dickinson was recently named as

one of Canada's outstanding principals by the national Learning Partnership and

the Canadian Association of Principals. She was one of only four principals in

British Columbia to receive this recognition, and it's well deserved. Christine

has formed strong links with our local aboriginal community, and that community

has, in turn, become more engaged in helping the high school identify ways to

encourage young native students to become more successful in school and in life.

Her hard work, as well as that of other educators, has certainly

paid off. High school completion rates for the native students in Bulkley Valley

school district were up an amazing 11 percent in 2004 compared to the year

before and 14 percent higher than they were in 2001. This is an impressive

accomplishment and one that Christine and the teachers and students should be

proud of. They had a vision for what those youths could accomplish, and they put

their hearts and souls into making it happen.

This government recognizes that our youth are the future of this

province. Some political opponents try to

[ Page 12000 ]

spread information to the contrary, but the proof is there for anyone to see.

We put students first by increasing per-student funding by the highest level

ever: an extra $863 for every student in British Columbia. We have helped school

districts pioneer innovative new programs; have provided funds for textbooks,

computers and technology upgrades; and have committed to adding another $150 in

funding this year. In the coming years we will continue to make education a

priority, with more resources and programs to encourage healthy living and

violence-free classrooms.

[1410]

Without people like Christine we would just be throwing money and

resources away. It is dedicated educators like her who take these resources and

then turn them into something that fires the imagination of the students and

inspires them to reach their academic life goals. I'm happy to see this

dedicated education professional receive national recognition, and I look

forward to seeing the good work she accomplishes with continued support from our

government.

PACIFIC NORTHWEST ECONOMIC REGION

B. Penner: As already noted, we have a number of visitors

here today from Washington State, including almost 40 legislative interns. In

speaking with them this morning, I was reminded of my own experience as a B.C.

legislative intern way back in 1989. I know our Minister of Sustainable Resource

Management also has fond memories of that experience.

Interjection.

B. Penner: It was prior to 1989. I think it was a different

decade altogether.

One of the best parts of the program was getting to know a little

bit about how the U.S. legislative system operates. While many of the outward

trappings are the same — big, fancy building with a large dome and marble

columns, and some guy who calls himself "the Speaker" — I was amazed at how

different the two systems are in practice. Canadians are quick to criticize our

American cousins for not knowing much about Canada or our political system, but

we are often guilty of the very same thing. That's one reason the Pacific

NorthWest Economic Region is such a useful organization.

Established in 1991 by five states, two provinces and the Yukon,

PNWER is a private-public partnership that focuses on the many things we have in

common and what we can do to maintain and improve our quality of life in this

part of the world. With the support of the Premier, British Columbia has worked

to reclaim its leadership role in PNWER since 2001. This was based on the

understanding that we can't afford to be insular in our thinking. There is a big

world out there just beyond our borders, with plenty of opportunities as well as

challenges.

PNWER has been a vehicle for engaging state legislators on issues

such as softwood lumber, BSE and border security. While we haven't reached

unanimity on all these issues, B.C. has picked up support from individual

legislators and, in the case of BSE, from the state of Alaska.

I'm as frustrated as anyone with the apparent unwillingness by the

U.S. federal government to comply with the WTO and NAFTA rulings, especially

when you consider that it was the U.S. that played a major role in shaping those

very same agreements. However, the Canada–U.S. relationship is too important for

us to withdraw into an insular world of our own. We need to engage our

neighbours and remind them that Canada remains their single biggest trading

partner and stands ready to play a constructive role in the future when it comes

to North American security.

SAFE SCHOOL PROGRAMS

L. Mayencourt: It's a pleasure to rise in the House today

and talk about something I'm very passionate about — of course, safe schools. I

want to share with this House some of the examples of very terrific programs

I've run across in British Columbia.

Recently I was on Saltspring Island, and I was there with the

Saltspring Women Opposed to Violence association. They run a program led by the

students in a couple of the high schools there that is really great. They teach

kids to talk about and discuss the issues around bullying and harassment. They

give students the opportunity to express how they feel and to empathize with

others. I think it's a very powerful example of what young people can contribute

to the education system in British Columbia.

When I was on the safe schools task force, we had the pleasure of

visiting Lakes District Secondary in Burns Lake, where a young lady and a group

of her students put on a play to deal with some of the issues confronting the

kids in that school, dealing with racism and other issues that were very

important to them. I visited a school in Nanaimo where students have a

leadership class. There's a group of 15 kids that are actually making a

difference by being mentors to kids in the school system to end discrimination,

bullying and harassment.

I mention these because I think that part of the answer to dealing

with bullying and harassment in our school system is to use these young people

as examples to lead the way and show us how we can address these issues

effectively. That's why I am moving forward with the safe schools act, which I

hope to introduce in the coming days.

It's also the reason I am proposing we set aside a fund of money

for student-led initiatives against bullying. Students in schools in Nanaimo,

Qualicum and any other place in this province who have a way of addressing

bullying and harassment in their own communities could apply for money, and we

would provide them with some resources. They might produce a video, or they

might produce a play. What's important is that we are empowering young people in

this province to end the problems they've inherited from many generations.

[ Page 12001 ]

[1415]

Mr. Speaker: That concludes members' statements.

Oral Questions

LEASE OF B.C. RAIL TO CN RAIL

AND COMMENTS BY LIBERAL MLA

J. MacPhail: Mr. Speaker, one thing you can say for the

B.C. Liberal caucus: when they're told to say that black is white, up is down,

day is actually night and that a sale is a lease, they stick to the message no

matter how foolish they look. But every now and then a crack appears.

Does the Minister of Transportation agree with his colleague the

member for Peace River South that the Premier broke the B.C. Rail promise, plain

and simple?

Hon. K. Falcon: You know, this is the same issue this

member constantly brings up, Mr. Speaker. What I will remind the member is that

there is a distinction between a sale and a lease. A sale was what the NDP

planned under Operation Roundhouse. That's a sale. A lease is when the

government maintains Crown ownership over a railbed and right-of-way and —

listen carefully — sells the operational assets to an operator that knows how to

run a railway.

Mr. Speaker: The Leader of the Opposition has a

supplementary question.

J. MacPhail: Well, I doubt that that Minister of

Transportation actually knows how foolish he looks in denying the obvious, so

let me put the question just a little more simply: can the Deputy Premier tell

us if the government agrees that the member for Peace River South was telling

the truth? Was he telling the truth when he told his constituents that the B.C.

Liberals broke their B.C. Rail promise — yes or no?

Hon. K. Falcon: I actually canvassed this issue extensively

with this member during estimates, and I was very clear with this member.

Perhaps I need to restate it again.

Interjection.

Hon. K. Falcon: Well, actually, my comments will echo those

of the member for Peace River South. We sold the operational rolling stock of

B.C. Rail; we maintained public ownership of the railbed tracks and

rights-of-way.

What the member needs to understand is that a sale like she is

talking about would be a sale similar to what the NDP had planned under

Operation Roundhouse. Ours was a lease arrangement, where we sold operational

assets and maintained public ownership of the railbed tracks and right-of-way.

That's called a lease.

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

supplementary.

J. MacPhail: The Minister of Transportation says he echoes

the comments from the member for Peace River South. Well, here's what the

Liberal member for Peace River South said on B.C. Rail: "Did we break that

promise? Yes, we did, plain and simple."

This is important, because British Columbians need to know if this

government will keep its new election promises. To the Deputy Premier, the woman

in charge: if the member for Peace River South is wrong…. If he's wrong and has

attacked the integrity of the Premier unfairly, will you please demand a

retraction from him in this House?

Hon. K. Falcon: Let me just say this: I will put our

government's record of keeping its commitment against that NDP record of broken

promises for a decade, any day of the week. The fact of the matter is that we

actually had a plan for the province of British Columbia.

Interjections.

Mr. Speaker: Order, please.

Hon. K. Falcon: We can't wait for the election, Mr.

Speaker. We can't wait for this election.

Interjections.

Mr. Speaker: Order, please. Order, please, hon. members on

both sides of the House. Let us hear the answer.

Hon. K. Falcon: I would remind this member that we actually

had a plan, a plan with 201 specific commitments, of which we have kept 97

percent. I can't wait to put that up against their record of disastrous economic

management any day of the week.

[1420]

GENERAL ELECTION AND

LENGTH OF LEGISLATIVE SESSION

J. Kwan: Clearly, the member for Peace River South doesn't

agree with the minister. Maybe he should have a conversation with him about

who's telling the truth.

The fact is that the Premier doesn't want to be held accountable

for what Liberal backbenchers say in their communities. Now the Premier wants to

send all of them — all the Liberal MLAs — on a taxpayer-financed campaign

holiday by shutting down the Legislature early. Can the Deputy Premier tell us

how much…?

Interjections.

Mr. Speaker: Order, please. Let's hear the question.

J. Kwan: Can the Deputy Premier tell us how much money

taxpayers will be spending so Liberal MLAs can hit the campaign trail instead of

being held accountable for their broken promises in this Legislature?

[ Page 12002 ]

Hon. G. Bruce: It must be frustrating for the opposition

when you have a situation where you have a budget that's got so much good news

that the people of British Columbia want to hear it. We want to make sure that

they understand all of the facts of the budget and are able to go through the

process they have to listen to what the budget is about, the plan that we have

in place, where we've worked our plan through.

You can see the economy turning. You can see more jobs happening

in British Columbia. You can see good news in every region of the province. You

and the members of the opposition ought to be supporting this budget in every

way, shape and form.

J. Kwan: Well, what is the government afraid of, then?

Every MLA is supposed to be in Victoria representing their constituents until

the election is called. There is more than enough work to do. Instead, the

Liberals are going to take an early leave and hit the campaign trail — all on

the taxpayer's nickel. Rather than spending millions of taxpayers' dollars to

help B.C. Liberals get elected….

Interjections.

Mr. Speaker: Order, please. Hon. members, let us hear the

question.

J. Kwan: Will the Deputy Premier tell her Premier to do the

right thing and call the election the minute the House is shut down?

Interjections.

Mr. Speaker: Order, please, hon. members. The Minister of

Labour has the floor.

Hon. G. Bruce: We as a government put in place a fixed

election date. You all know when it is — in May.

Interjections.

Hon. G. Bruce: Now, I'm getting advice from both of you

here as to whether or not members should be in the House. I look around, and in

fact, all the members are here in the House, ready to do the business of

government. The election has been called.

Interjections.

Mr. Speaker: Order, please.

Hon. G. Bruce: I know you're anxious to get to the polls,

as are we, so that the people of British Columbia can once again return good

government to British Columbia by re-electing this side of the House.

Interjection.

Mr. Speaker: Order, please.

ACUTE CARE SERVICES AT

SURREY MEMORIAL HOSPITAL

J. Brar: Last week I brought forward the case of a Surrey

man who died in Surrey Memorial Hospital. Members of the government said it was

all about politics. Now a B.C. Liberal MLA is calling for an inquiry.

I don't care how it gets done and who gets the credit, but we need

a thorough review of this case. Will the Solicitor General listen to his own

member and call for an inquiry into the tragic death of Baljit Bains?

Hon. R. Coleman: First of all, I invite the member to take

the opportunity to read the Coroners Act to understand how coroner's

investigations are conducted and how coroner's inquests come about. At this

point in time there is an investigation taking place by the coroner's office,

which I won't interfere with and neither will the members opposite. That

investigation will cover everything from medical history to tapes that may be

with regards to dispatches of ambulance, witnesses, toxicology, autopsy reports,

etc.

At that time, the coroner responsible for the file will make the

decision whether there should be an inquiry or an inquest. Not until such time

and at no time will I interfere with that investigation.

[1425]

Mr. Speaker: The member for Surrey–Panorama Ridge has a

supplementary question.

J. Brar: The circumstances surrounding the death of Mr.

Bains are a concern to every resident of Surrey. A review completed last

December by D.D. Cochrane recommended new guidelines to reduce wait times in

emergency rooms. Nothing has been done yet to follow up on that recommendation.

Can the Minister of Health assure my constituents that she will take immediate

steps to implement the recommendations of the Cochrane report on conditions at

Surrey Memorial Hospital?

Hon. S. Bond: First and foremost, we want to extend

heartfelt condolences to the family on the loss.

Interjections.

Hon. S. Bond: To repeat, we extend heartfelt condolences to

the family, and certainly, that has been expressed by this government. In fact,

when the Cochrane report was released, we made a commitment to ensure that the

Fraser health authority did indeed implement the recommendations. I have asked

my deputy minister to spend time with the Fraser health authority on Friday. I

have asked them to bring back an update on the recommendations from the Cochrane

report and also have asked to see any recommendations that come from the

internal investigation being done by the health authority.

Mr. Speaker: The member for Surrey–Panorama Ridge has a

short supplementary.

[ Page 12003 ]

J. Brar: I have the list of recommendations. There are a

number of recommendations made for the emergency room. I would like to have a

copy of those policies recommended by the Cochrane report from the minister, if

she can supply it to me.

Some Hon. Members: Name one recommendation that you've

implemented.

J. Brar: Yeah. You can name one recommendation which has

been implemented, and we would like to have a copy of the policy which was

recommended in this report.

Hon. S. Bond: The Cochrane report is public. I actually

presented it in a technical briefing in Surrey. In fact…

Interjections.

Mr. Speaker: Order, please.

Hon. S. Bond: …the Fraser health authority…

Mr. Speaker: Order. Let us hear the answer. Order, please.

Hon. S. Bond: …is in the process of implementing the

recommendations, and I will be receiving an update in terms of the Cochrane

report recommendations by the end of the month.

RELEASE OF COMPTROLLER GENERAL

REPORT ON COLUMBIA BASIN TRUST

CONTRACTS

E. Brenzinger: Scandal after scandal after scandal — no

wonder this government wants to shut down this House early yet again.

K. Krueger: You know about scandal.

E. Brenzinger: Yeah, you should know too, Mr. Whip.

Mr. Speaker: Order, please.

E. Brenzinger: My question is to the Minister of Energy.

Interjections.

Mr. Speaker: Order, please.

Interjections.

Mr. Speaker: Order, hon. members.

E. Brenzinger: Last Wednesday the minister confirmed that

the office of the comptroller general is investigating Ken Epp, who is the chief

executive of Columbia Basin Trust Energy and a consultant with ZE PowerGroup.

Over half of Columbia Basin Trust Energy's annual budget flows into ZE

PowerGroup. This flow of money has continued despite the now seven months–long

investigation of the OCG.

Can the minister confirm whether or not Ken Epp's wife also owns

shares in ZE Power? And can the minister please explain to this House why Ken

Epp has been allowed to continue funnelling millions of dollars into ZE Power

and, presumably, his own pocket?

Interjections.

Mr. Speaker: Order, please, hon. members.

Hon. R. Neufeld: Interesting accusations. I guess the

member is leaning on the fact that she can say almost anything she wants to in

here, but she should be careful what she says out in the hallway.

I said last week, to the same question, to the same member, that

as soon as that report is ready, we will release that report. It will be public.

It will be on the website. ZE Power was hired by Columbia Basin Trust to look

after their interests, and we're waiting for that report — the same as I think

she is, if she basically understands it.

[1430]

VANCOUVER AGREEMENT

V. Anderson: The Vancouver agreement has highlighted a

unique and very successful partnership among the city of Vancouver, the federal

government and our own provincial government. The current agreement is set to

expire in March of this year. I am asking the minister responsible: will the

government continue this partnership with the city of Vancouver and the federal

government and renew the Vancouver agreement?

Hon. M. Coell: Yes, we will. The province is in

negotiations with the city and the federal government now to renew that

agreement. It has been tremendously successful….

Interjection.

Hon. M. Coell: I can't hear for the noise on the other

side.

The province put in $10 million after we were elected. We put in

another $3.5 million, and we're actually going to do more than just fund the

Vancouver agreement. We're going to extend it to the city of Victoria. We're

negotiating with the city of Victoria. It's a tremendous agreement — three

levels of government — and it will be very successful.

[End of question period.]

Reports from Committees

J. Kwan: I have the honour to present the report of the

Select Standing Committee on Public Accounts for

[ Page 12004 ]

the fifth session of the thirty-seventh parliament entitled Annual Review

of Auditor General Reports.

I move that the report be taken as read and received.

Motion approved.

J. Kwan: I ask leave of the House to permit the moving of a

motion to adopt the report.

Leave granted.

J. Kwan: I move the report be adopted.

I would also like to note that this report addresses the work and

resulting recommendations of the committee regarding the following reports: the

auditor general report No. 4, 2003-04, Alternative Payments to Physicians: A

Program in Need of Change .

I should also note that subsequent to this discussion, the

committee received a number of letters from physicians who dispute some of the

dialogue that took place with the Deputy Minister of Health. Subsequently, the

committee has asked the deputy of the Ministry of Health to respond to that

correspondence accordingly.

We also dealt with auditor general report No. 5, 2003-04,

Monitoring the Government's Finances ; auditor general report No. 6, 2003-04,

Audit of the Government's Review of Eligibility for Disability Assistance ;

auditor general report No. 2, 2004-05, In Sickness and in Health: Healthy

Workplaces for B.C.'s Health Care Workers ; auditor general report No. 3,

2004-05, Preventing and Managing Diabetes in British Columbia ; auditor

general report No. 4, 2004-05, Internal Audit in Health Authorities: A Status

Report ; auditor general report No. 5, 2004-05, Salmon Forever: An

Assessment of the Provincial Role in Sustaining Wild Salmon; and finally,

auditor general report, November 2004, Financial Statement Audit Coverage

Plan for Fiscal Years 2005-06 to 2007-08 .

I appreciate this opportunity to move the adoption of the

committee's report.

Motion approved.

Tabling Documents

Hon. B. Barisoff: I beg leave to present the 2003-04 annual

report from the Environmental Appeal Board.

[1435]

Orders of the Day

Supplementary Estimates

Hon. C. Hansen presented a message from Her Honour the

Lieutenant-Governor: supplementary estimates (No. 2) for the fiscal year ending

March 31, 2005.

Hon. C. Hansen moved that the said message and the estimates

accompanying the same be referred to Committee of Supply.

Motion approved.

Committee of Supply

The House in Committee of Supply; J. Weisbeck in the chair.

The committee met at 2:38 p.m.

SUPPLEMENTARY ESTIMATES:

MINISTRY OF FORESTS

On vote 24(S): ministry operations, $112,500,000.

J. MacPhail: Just for the information of the public who may

be watching us, these are supplementary estimates related to the 2004-05 budget,

the budget that is ten and a half months old and for which the spending will be

finished March 31, 2005. Let's not get confused that the government is somehow

allowing debate on the election budget. That ain't going to happen. They're not

going to let us debate that line by line.

What we are doing here today is debating spending that this

government didn't get passed during the estimates debate for the '04-05 budget

last year. This is a government that said: "We're going to make sure everybody

has their budgets at the beginning of the year. We're going to debate it, and

that's it." It was the NDP law that came in that required any extra budget

spending to come in and be debated. That was a law brought in by the then

Finance minister, Paul Ramsey, in the year 2000.

Here we are, Mr. Chair. We're debating spending by the government,

not for the election budget — don't worry; nobody is going to get a chance to

talk about that — but for the current budget year.

Interjection.

J. MacPhail: I look forward to the bellowing member for

Kamloops–North Thompson raising his questions in a way that actually is on mike

rather than the surround sound of the Legislature. It's very effective surround

sound, but perhaps he should actually go on the record for once.

[1440]

Here is what we are debating here. It's $112 million for the

Ministry of Forests. As I understand it, there will be $50 million for the

commitment the Premier made to increase the forestry revitalization trust from

$75 million to $125 million. There will be $50 million towards compensation for

improvements by companies impacted by timber reallocation as part of the

forestry revitalization plan. That will increase the total compensation for

companies to, now, $250 million. There will be $12 million for reforestation.

Is that a fair

summary?

Hon. M. de Jong: Knowing as I do the extent to which the

member values the efficient use of time in this chamber, I'll address my

comments to the last part of her statement, which I believe represents an

accurate summation of what the stated $112,500,000 relates to.

[ Page 12005 ]

I should take a moment, however, and alert the member and others

to the fact that we have to my left, from the Forests ministry, Henry Benskin.

To my right is the Deputy Minister of Forests, Mr. Doug Konkin. Deputy chief

forester is Mr. Benskin's official title, Mr. Chair.

J. MacPhail: I just want to review a bit of the legislative

history around these matters. On March 26, 2003….

The Chair: Hon. member, I caution you to keep the questions

relevant to the section, please.

J. MacPhail: I thought you were actually going to call to

order the bellowing member from Kamloops–North Thompson. But actually, I look

forward to competing with that member in terms of voice quality. I look forward

to that competition.

On March 26, 2003, the government introduced Bill 28, which was

the Forestry Revitalization Act. The act had the goals of "creating new forest

sector opportunities, opening up markets for B.C. forest products and ensuring

sustainable forest practices." That bill passed on March 31, 2003.

Those opportunities I just listed were to be created by

"reallocating 20 percent of logging rights from the major licensees." And I

continue to quote: "One-time funding of $275 million has been set aside for the

transition from the old to the new. Forest companies will be fairly compensated

for the legal harvesting rights removed from their allowable cuts — $200 million

has been allocated for this purpose. Forest workers and contractors will have

access to a $75 million trust fund for transition assistance." There shouldn't

be any disagreement there, because I'm quoting from a press release from the

Ministry of Forests.

In March 2003 a supplementary estimate was used to establish these

two funds so that this one-time funding could be taken from the '02-03 fiscal

year. Today this supplementary estimate is boosting both of those funds.

What my information shows, just to date, is that two agreements

have been signed to compensate companies for the takeback of tenure. One is with

Weyerhaeuser. That was done in September of last year, September 2004.

Weyerhaeuser received $32.1 million to compensate them for a reallocation of

980,000 cubic metres on the coast and 220,000 cubic metres in the interior. In

January 2005, Western Forest Products received $16.5 million in compensation for

tenure loss on the Queen Charlottes and the Mid-Coast.

There are 25 tenure holders still in discussions with the

government, which are expected to be resolved by March 2006. It is also my

understanding that no workers have yet been compensated. That's the basis upon

which I'll be asking my questions. I'm happy for the minister to correct me, if

I've been wrong in any area.

[1445]

My question is this. At the Truck Loggers Association convention

last month, the Premier announced what the minister said in January 2004. So we

had a January 2004 announcement by the minister at the truck loggers convention,

then the Premier rode in on his white horse in January 2005 and made the same

announcement. He basically said there was not enough money in the trust to

compensate all those to be affected by the takeback. So did it take the Premier

a year to hear what the Minister of Forests said in January 2004, or is the

Minister of Forests without influence? I can't believe that.

My question to the Minister of Forests is: what happened between

April 1, 2003, and January of 2004 for the minister to come to the conclusion in

January 2004 that there was not enough money in the trust fund?

Hon. M. de Jong: I think the recitation of the chronology

the member prefaced her question with was essentially correct. I should point

out to her, however, that one other licensee has settled pursuant to the

compensation fund, and that is the company Teal Jones. There is a third company,

and I can confirm the amount for the member momentarily, if she requires that

information.

It is — and I suspect it will be the essence of the exchange we

have in the House today — a fair question to ask what has prompted the decision

to add $50 million to the mitigation trust and $50 million to the compensation

fund and what has prompted the decision to seek authority from this Legislature

to spend an additional $100 million.

My own recollection of the events as they relate to the truck

loggers conventions in '04 and '05 are slightly different than the member's. In

January '04, there was certainly an announcement around the introduction of the

market pricing system. The question, and this may be where the member derives

her impression from…. There were certainly questions put at that time and

suspicions on the part of the Truck Loggers Association that there were

insufficient funds in the mitigation trust to achieve the government's objective

of fair and equitable mitigation for those impacted by the 20 percent tenure

reallocation.

What I can say to the member specifically, though, about how that

turned from a general commitment into a more specific announcement by the

Premier in '05, relates to the work that the trustee, Mr. Eric van Soren, along

with his advisory panel — the advisers to the trust, comprising representatives

from the licensees, from what was then the IWA and is now steelworkers union and

the truck loggers….

Here's what took place, roughly in this order. The first order of

business for that group was to take the trust deed, which established the trust,

and establish a set of recommendations or guidelines that Mr. van Soren could

apply to the task of payment out — broadly speaking, two areas: contractors who

are impacted and employees who are contracted. Those three groups, via their

representatives, sat down and came up with a set of guidelines.

I apologize to the member. I meant to send this over to her

previously and didn't. I have for the mem-

[ Page 12006 ]

ber those mitigation…. If someone could get those over to the member

opposite.

[1450]

The first task was for that group to agree on what those

guidelines would be. I should say to the member that following the conclusion of

their work, there was a degree of discussion back and forth with government,

because the trustee was then confronted with the need to take those guidelines

and assess as best he could the cost of their application. As it turns out, the

trustee came to the conclusion that if those guidelines were used and formed the

basis for payment out to the two groups I've mentioned, there would be

insufficient moneys in the mitigation trust.

There was some ongoing discussion to try to quantify what that

difference would be, and at the end of the day, by fall, the trustee, who I hope

we all recognize and who I think the member has some familiarity with: Mr. van

Soren…. He seems to enjoy a healthy degree of credibility and trust on the part

of all the players here. He came up with what he thought was his best guess,

based on the information he had from licensees and others about the amount of

money that would be required to give effect to the guidelines that all three

parties had agreed upon.

That was presented to government, to myself, and what followed

pursuant to the announcement and the subsequent debate we're having today

relates to giving effect to the decision the government made to accept Mr. van

Soren's tabulation or quantification of what he thought the cost was going to

be. That's where the $50 million figure comes from. All of the parties, I can

advise the member, do agree that this amount is sufficient to fund the

guidelines that will guide payment out of the moneys.

J. MacPhail: This document is dated January 21, 2005. It's

labelled as final. Can the minister tell us how long Mr. van Soren was working

on this and with whom and how much this cost?

Hon. M. de Jong: I'm thinking about the various meetings

that I was aware of, certainly, through the summer and the fall, and I can

advise the member that…. I can't give her a price tag as it relates to the

overall cost of that, but I do know this: in his estimates relating to the

administrative costs associated with the trust, I think my recollection is

correct that $5 million was originally budgeted for that amount over the life of

the trust.

Mr. van Soren is proceeding on the basis, I believe, that those

costs can actually be reduced to $2 million. I realize that's a large ballpark

and doesn't answer the second part of the question, but it does give some

indication of the administrative costs associated with the management of the

trust.

J. MacPhail: We have an allocation in the '02-03 budget of

$75 million for transition assistance for workers — both workers in the woods

and contractors as well, the direct employees and the contractors. So '02-03. It

is now '04-05. At the end of '04-05 — January 21, '05 — we get a set of

guidelines, and all of a sudden there is 50 million more bucks to be added to

the pot, but not one dime has been spent out of the pot yet — not one dime.

Can the minister tell me: what in here scared him so much that he

had to increase the pot from $75 million to $125 million when not one dime has

been spent yet? When is the deluge going to come that would require all of this

extra money being spent now?

Hon. M. de Jong: The member speaks to an issue that

actually caused me some frustration as well. It relates to this fact: the

trustee, under the terms of the trust deed and pursuant to the fiduciary

responsibilities he has to the trust itself, made it abundantly clear that

before he was capable of paying out any moneys on any basis, he had to be guided

by a set of rules and that in the application of those rules, he could be

reasonably satisfied he would have sufficient moneys on hand to pay out to all

qualified individuals or contractors.

[1455]

The argument from Mr. van Soren, essentially, was this: "I have a

set of guidelines that the three parties have signed off on and that the

government has indicated it is now comfortable with, but I don't have enough

money. I am not prepared to be paying out to a certain set of workers who are

now entitled unless I can be certain I have enough money at the end of the

process." They will undoubtedly be workers involved in the interior, just by

virtue of the chronology of how this is going to play out. "So you, government,

need to satisfy me that in following these guidelines, I won't be left high and

dry towards the end of the process."

The passage of these supplementary estimates — assuming they do —

will provide Mr. van Soren with the comfort he requires to pay out immediately,

and there is, actually, a group of workers who have been impacted and who are

now awaiting payment out. That's the group in Sproat Lake in Port Alberni.

Having received sufficient funding, he will be in a position to begin paying out

immediately.

J. MacPhail: My question was: what in here clarified the

amount of money that would be required? Can the minister point to these new

guidelines that I've just received a copy of…? I thank the minister for that.

What enhanced guidelines in here required an additional $50 million for the

workers? He can take his time. These are very complex guidelines. I appreciate

them.

Receiving them at this late date, it is hard for me to ask any

questions on them, but perhaps the minister could assist me by showing me where

these guidelines led to the conclusion that $50 million more was needed.

Hon. M. de Jong: It's a fair question, and I hope I am able

to provide information that satisfies the member.

[ Page 12007 ]

The guidelines are finalized, and Mr. van Soren begins the process

of quantifying what they mean in terms of the application. I can give the member

an example of the kind of methodology he employs. He first draws out information

from the licensees and asks the question that says: "Based on how the 20 percent

takeback is proceeding, can you summarize for me what you believe the impacts

are going to be on various workers, and where?"

He then has to calculate, using the guidelines, what those

entitlements will be. He has to look at how long the average worker has been on

task and what their entitlements would be as individual workers, based on the

formula. There is, within the guidelines, a set of criteria that defines what an

individual worker — you can use that example — would be entitled to. He then has

to plug in the data he receives from individual licensees and start to do some

math about what it's going to work out to over the life of the trust and as the

20 percent takeback plays out across the province.

He did that and, in the case of contractor mitigation, came to a

figure in the $60 million range and, in the case of workers, came to a figure in

the $70 million range. That of course told him that even with reduced

administration costs and even with accumulated interest — because, as the

member's pointed out, the fund has been in place now for a year and a half or

two years — there was still insufficient money.

That's where the analysis comes from. I will endeavour as best I

can, if there are specific areas or assumptions that the member has an interest

in, to pass the information along that formed the basis of Mr. van Soren's

calculation. As best as I can, I'll do that.

J. MacPhail: I need further clarification. Who drafted

these guidelines, the B.C. forestry revitalization trust replaceable contractor

mitigation guidelines dated January 21, 2005? The minister just said that Mr.

van Soren didn't draft these. He's just applying them. So who drafted them, and

why did it take a year and a half?

[1500]

Hon. M. de Jong: I apologize to the member for being

unclear on that point. They were, in fact, drafted by the advisory board to the

trust and to the trustee. The licensees have representation. The then IWA — now

Steelworkers — have a representative or two. There are two from the

Steelworkers. The truck loggers have representation, and the government has

representation on that board.

Yes, they had a pretty healthy debate about what the guidelines

should look like. It was very much a product of the debate that emerged, I

believe, in the fall of last year. Mr. van Soren came to the minister and said:

"Here's what's emerged. Here's what the advisory panel is recommending. Now, are

you as government prepared to accept it? If you are, I will do some work

relating to what I think the costs are going to be to implement it. If you

aren't, you need to advise the advisory board that these guidelines are

unacceptable to government."

J. MacPhail: I assume that if the government has fully

costed the implementation of these guidelines, the government knows how many

jobs are now going to be lost. These guidelines are about compensating workers,

contractors, for the loss of their work in terms of the 20 percent tenure

takeback.

I mean, we're coming here with a very precise number. The minister

has just explained that it took them a long time to figure out just who was

going to be affected by this and how much. Mr. van Soren has been spending

months on it. How many jobs are going to be lost? How many are jobs of forest

companies, and how many are contractors?

Hon. M. de Jong: First of all, I'm going to make this

distinction, and I believe it is a valid one. What we are trying to deal with

here is the acknowledgment of disruption. There are already circumstances where

workers have been affected by the tenure reallocation process but have emerged

with continuing employment elsewhere in short order, if not immediately.

This is a mitigation trust designed to recognize that there can be

impacts when government involves itself in the degree that we have with the 20

percent tenure reallocation. That's the first point I would make.

The timber isn't going anywhere. The mechanism by which it finds

its way to market and processing facilities may be different. We recognize that

that may have an impact on some workers. Some older workers — this is where Mr.

van Soren had to engage in some detailed analysis — may in fact find themselves

in a position where they are not finding alternative employment. Part of his

analysis was designed to recognize that and quantify it.

The numbers that I can provide to the member immediately are the

monetary figures that I provided — the approximately $60 million for contractors

and $70 million for workers' compensation. I can endeavour to be a little bit

more specific than that if the member wants to provide me with the opportunity

to do so.

J. MacPhail: Mr. Chair, I'll just read you some of the

titles on this document. It's on disruption where it leads to unemployment, and

it's called: "Guidelines for Major Licensees and Contractors with Respect to

Severance of Employees as a Direct Result of Forestry Revitalization Act Timber

Reallocation."

They're losing their jobs, and they're being compensated for that.

Then there's another

section that tells what happens if someone's going to

retire within two years of that severance date. This is about people losing

their jobs as a result of the government's market reforms. If there's going to

be $60 million given as compensation to the contractors, how many contractors

are affected by that?

[1505]

Hon. M. de Jong: I have numbers for the member, so I'll

answer the first part of the question as best I can and then try to get more

specific numbers for her.

[ Page 12008 ]

There was a debate amongst the members of the advisory trust, and

it goes to the heart of something the member mentioned a few moments ago. Is

there a difference between mitigation and transitional assistance versus a model

built around the notion of severance? There is some severance here. We shouldn't

kid ourselves about that.

The argument advanced by, for example, the Steelworkers or the IWA

was that if these guidelines need to capture people who are impacted as a result

of tenure reallocation and that impact needs to be measured on the basis of

severance…. Quite frankly, the initial view that the government took was that in

a case where someone is impacted — severed from a position — in one location but

ends up moving to another operation in the span of a week or two, a different

set of rules or a different approach should be taken. This became quite a heated

issue in terms of the discussion.

The guidelines are built around the notion of severance

compensation, if you will, and that added significantly to the cost of payout.

That's reflected in the work that Mr. van Soren did. By way of a

preamble to

recognize for the member that there was a discussion about who should be covered

and the decision around whether it should be on a severance model or not, that

led to a certain set of decisions which increased the cost. I have some numbers,

but I'm going to take a moment to have a look at them.

[1510]

Let me start on the coast. Just to review, we talked about the

guidelines and how the trustee took those guidelines and then tried to quantify

based on information he gets from various parties about what the impacts are

going to be. Then he multiplies that out to come up with what he thinks the

costs are going to be.

Let's talk about company employees on the coast and in the

interior. Mr. van Soren, based on the information he has, believes that up to

400 individuals on the coast could be impacted when the tenure reallocation is

completed — so through the course of that process, up to 400 company employees.

In the interior…. I should say to the member…. Well, let me give the number

first, and then I'll offer my additional remarks.

The equivalent figure for the interior at the company level is

178. Everyone's having difficulty dealing with the interior. Over the next few

years the reality is that there's a hell of a lot of work out there, based on

the beetle uplift. There is some suspicion that the interior figures may be on

the high side, and I won't pretend to have done the risk analysis of that. We

are relying at the end of the day on the numbers Mr. van Soren put together.

J. MacPhail: So that's dealing with the $70 million going

to what looks like 578 employees. I'm just going to divide that and see how much

the….

Interjection.

J. MacPhail: Yes, but the minister said that $70 million

was going for workers' compensation and $60 million for contractors'

compensation. So far, we've got 578 individuals accessing $70 million. Perhaps

he could give me the same figures for the contractors who will be severed.

Hon. M. de Jong: The equivalent number is, for the

contractors on the coast, 560, and in the interior, 407. Again, I offer the

caution….

J. MacPhail: It's 407? So 560 and 407.

Hon. M. de Jong: And 407. Again, the caution is as it

relates particularly to the interior figure.

I should say this as well. In the case of the contractors, those

contractors are already demonstrating they are in a position to bid on the

additional timber that has come available, but Mr. van Soren has identified

those numbers of employees as potentially being impacted by the reallocation.

J. MacPhail: So for the employees impacted, the 578 who

will be sharing in $70 million, that's about $121,000 per employee in severance.

What is that compensation for?

Hon. M. de Jong: If I could, I'll read a note I have from

Mr. van Soren relating to the numbers we're talking about. I'll just read the

note to the member. He says here: "The above numbers are likely too high. There

will likely be fewer contractor-employee severances, because alternate work will

be found. Also, the seniority numbers are likely too high." And he has built

seniority numbers into entitlements as he worked through this.

[1515]

The Coast Sustainability Trust, which he was of course intimately

involved in, paid only an average of $16,120 per employee. Even going from seven

to ten days should only boost that average to $23,000. Some employees will be

entitled to considerably more than that amount, but that is the note he attaches

to these various figures.

J. MacPhail: I'm using a calculator, but I could be wrong.

It is possible. I punched in $70 million, which is what the minister told me was

compensation for the employees' compensation. That's why we're back here asking

for more money. There are 578 affected by that — 400 on the coast and 170 in the

interior. By all accounts, Mr. van Soren is saying those are generous. Well, $70

million divided by 578 is $121,000.

Mr. Chair, please don't in any way interpret my questions as

suggesting that somehow these workers are not valuable and shouldn't be properly

compensated, but there's a hell of a lot of difference between the minister

saying they're getting $21,000 and $121,000. That's why we're here.

Hon. M. de Jong: I think we have some information that may

be of assistance to the member. The number she has to divide the $70 million by

is not 585, because

[ Page 12009 ]

that neglects the other group of employees. It's actually a figure of 1,767

when you consider the coast and the interior. When divided into the $70 million,

the average payment — and this jives with the figure Mr. van Soren has on his

page — would be $39,000, almost $40,000.

J. MacPhail: The minister told me that there were — how

many employees impacted by this — 400 individuals on the coast, 178 individuals

in the interior. Those are employees. So 400 plus 178 is 578 divided into $70

million. Then there's another $60 million for the 967 contractors.

Hon. M. de Jong: Sorry. I neglected to do this. The

contractors, in addition to the compensation they are entitled to for their loss

of cutting rights, have employees. Those numbers are as follows: 407 in the

interior and 560 on the coast. I didn't give the member those numbers. That's

why she had the figures she did.

[1520]

J. MacPhail: We're still dealing with the contractors'

employees, of which there are 967 throughout the province, accessing the same

compensation fund as the direct company employees, of whom there are 578. So the

$70 million fund is divided amongst almost 1,600 employees — whatever. It's 967

plus 578. Who gets access to the $60 million fund for contractors only? How many

are there, and how much are they getting?

Hon. M. de Jong: Right. The remaining amount would be used

to provide mitigation to the contractors for the loss of the cutting rights.

That figure, Mr. van Soren estimates, could be as high as $57 million.

J. MacPhail: Yes, I know. I'm asking: how did that

calculation occur? How many contractors are affected, and what value was placed

on cutting rights? Is it per thousand cubic metres, or is it a historical

rolling average?

Hon. M. de Jong: Here's the breakdown of interior versus

coast for the contractors, and this is for the contractors as corporate

entities: in the interior, $30 million; on the coast, $27 million.

Again, the calculation that Mr. van Soren has employed is as

follows. First of all, contractor mitigation is available only to replaceable

contractors. This is often referred to as "Bill 13 entitlements" and is based on

the contractor mitigation guidelines, which the member now has as part of the

package. That calculation of cost is based on the following caps: $16 per cubic

metre on the coast, $10 per cubic metre in the interior and $30,000 per

kilometre of road impacted.

J. MacPhail: All of the contractors who will be compensated

are what we used to call Bill 13 contractors?

Hon. M. de Jong: That is generally the case. In the

interior we have discovered that there are contractors who technically were not

entitled to what they call Bill 13 protection, but they had been operating on

the basis of being replaceable contracts. There, the impacts that are being felt

have been calculated into this. Generally speaking, however, what the member

said is accurate.

J. MacPhail: Now, the government outlawed, repealed, Bill

13. This government did. The minister is saying no. Perhaps he could explain.

Hon. M. de Jong: Thanks. We can tell the member we thought

about it. What we did do is change fairly significantly the arbitration process,

and we actually provided a couple of options. All of the parties seemed to be

concerned about the length of time it was taking to arbitrate some of the

differences, but the essence of Bill 13 remains in place.

[1525]

G. Trumper: Thank you to the Leader of the Opposition for

those questions.

Obviously, the minister knows that this specific area we're

talking about affects my community very much. I would just like to make the

comment that a lot of the people who were affected by this have found other

employment. In fact, one of our local major contractors said the other day that

he's having difficulty finding employees and is now actually having to do some

in-house training.

The question that I have been asked countless times by the

employees, particularly the Sproat Lake division, is: when are they going to see

some cheques, Mr. Minister?

Hon. M. de Jong: It's a fair question. A mitigation fund

that isn't actually being paid out doesn't do people much good. Passage of these

supplementary estimates by this House, if that occurs — and I hope it does —

will provide the trustee, Mr. van Soren, with the authority he requires and that

he has stated he requires to begin the process of paying out. That process can

begin immediately, as I understand it.

Some of the applications from the group that has already been

identified — and I believe it's in the neighbourhood of 50 or 60 employees —

have begun. It is merely now a matter of Mr. van Soren satisfying himself that

he has the spending authority required to pay out those cheques. I hope this

House is able to give him that authority quickly.

J. MacPhail: I'm just trying to figure out what the delay

has been here. If the rules are still there, according to Bill 13 contractors….

That's been ever thus. I'm not quite sure what the complexities were in

determining who gets compensated if those guidelines remained in place as the

basis for which people were getting compensated. I'm not quite sure why the

negotiations for what figures to apply took so long. I'm not sure what the

complexity was to figure out who it should apply to.

Yet here we are, a full year and a half later from the original

announcement. Actually, it's more. What was

[ Page 12010 ]

it — March 2003 — that we adjusted this minister's budget at the eleventh

hour, well into the night? It's almost two years that we're now coming around,

and the minister is saying: "Oh, well, we're using the same rules that have

always existed for contractors under Bill 13."

Perhaps the minister could tell me just the nub of the complexity

for this delay.

Hon. M. de Jong: Well, I'm not sure there is a complexity

involved. What the member may not be aware of is that following the introduction

of the legislation, there was a time line involved in that. For the period

between the formal instrument giving rise to the takeback and where we are

today, we actually lent — that would be the legal term — the fibre back to the

licensee. So people have continued to operate, and that's why the actual impacts

haven't visited on people.

There's an exception, and that is the situation in Sproat Lake.

The Crown hasn't actually taken formal possession, if you will, of those

specific tenured areas. The member asked me what the complicated nature was.

Well, you've got three parties and government sitting down deciding what the

basis is going to be for payment out. There are some philosophical questions

that need to be answered there and some technical information that needs to be

gathered. Through the summer and fall of last year both the technicians and the

representatives of the various groups sat down to hammer that out.

Remember, a lot of this was depending on which licences were going

to be impacted. They had to get that information, which they got from

government, and they started to work through this.

The concern has always been that the money be there when people

are actually told this area is no longer available to a contractor or a licensee

to do work. That's what happened in Sproat Lake. That decision was made. In

fact, it was made, I think, three months ago. So those workers are actually

waiting. They know they're not going back to work in that area. That is not the

case elsewhere. What we want to do is ensure that everything is ready for when

those impacts start to be felt.

[1530]

It will happen first on the coast. It will happen later in the

interior. There is a legislated time line for that to occur, a deadline by which

it has to be completed, so there will be impacts. I've said to the member before

that in the interior, based on what's happening with the uplifts, it is more

difficult to quantify, and it's possible — in fact, one hopes — that all of the

moneys now in the process of being allocated to the trust won't be required.

I'm not sure it's a case of delay. There was some significant work

that needed to occur. There was a pretty healthy debate amongst the participants

to the advisory board about what the guidelines should be. They're now set.

They've been funded. There's a first initial group of employees who are waiting.

They've waited too long. I agree with that, because it's been three months, but

we don't want any more employees to have to wait.

J. MacPhail: Let me explain what I mean by "delay." The 20

percent tenure takeback is part of the market pricing reform that this

government is bringing in. That was supposed to be the great answer to making

our system work better. It was supposed to deal with some of the allegations of

subsidization that the Americans made against us, and it was the great new way

that the Liberals were going to manage our forest base, land base.

We saw just last week that there was legislation passed to delay,

by one full year, the implementation of the Forest and Range Practices Act. Now,

that was the great new deregulation, a more efficient regulatory approach that

the government was going to take to managing our forests because the big, bad

nineties were so awful, and now that's been delayed for a full year. As I said

at that time, anywhere else, that would be front-page news, but not in this

province — no. No, that's not front-page news.

We're two years after this fund was first set up, and the fund was

set up to allow for the transition toward a 20 percent tenure takeback that

would assist in a transition to a market pricing system. So where are we at in

the 20 percent tenure takeback and the transition to the market pricing system

if, indeed, we're not delayed in this area?

Hon. M. de Jong: Well, look, the member has asked for — and

is, I think, legitimately entitled to — some of the numbers that relate to this.

I probably have a significantly different take on the progress. It's always a

challenge to move through these things. We did decide we wanted to do it right

and minimize, as best we could, the disruption that results from changes that

are occurring on this magnitude.

You know, we did make the shift to MPS on the coast, and it was —

well, one risks overstating — almost universally hailed as the right thing to

do. The results are there for this member and others to assess. For the first

time in a long, long time the coastal industry has actually cut the AAC. That's

a good start.

[1535]

Now to the specifics of the question. On the coast there are 2.7

million cubic metres subject to takeback and reallocation. We have, pursuant to

the agreements that have been signed, accounted for two million cubic metres of

that volume, and the B.C. timber sales program is in the process of moving that

volume, to which it will receive access. There are the first nations agreements

that have been signed and, of course, some of the community forest agreements.

So of the total 2.7 million on the coast, two million have been identified and

signed off on, pursuant to those agreements. There are another 700,000 cubic

metres that need to happen.

It was always our intention to move first on the coast, given the

gravity of the situation there. We are very nearly complete, although the

process of moving that wood out to market will obviously continue in the

[ Page 12011 ]

months ahead. And there's a big chunk of work to be done in the interior.

J. MacPhail: I'm going to ask for the figure. Has any

reallocation takeback taken place in the interior?

Hon. M. de Jong: Very little. There are about 500,000 of what

are approximately five million total cubic metres that are impacted, and I

suspect those relate to licensees. We call them single-licence licensees. It was

apparent at the time the legislation passed which licence would be affected —

because they only had one — and what the volumes would be on those licences.

That's probably the bulk of the 500,000 cubic metres in the interior.

J. MacPhail: So of 7.7 million cubic metres subject to

takeback across the province, 2.5 million are done so far. That leaves about 5.2

million still left to take back and reallocate — not a sterling record.

Yes, the government said the coast was going to be done first. The

reason why the coast should have been and was done first was because prices were

such that it made sense to go to a market-based pricing system with very, very

little disruption. I mean, the odds were great that it would only succeed, and

that made sense.

But the test is in the interior. Of course, I was on the prebudget

consultation tour, where forest company after forest company came before us and

said, "Don't go to the market-based pricing system," and clearly, the government

hasn't. They haven't done their takeback, and yet here we are planning a big

fund for companies, workers and contractors based on them still going to a

market-based pricing system and doing the 20 percent takeback.

Let's just look at the coast, where there's 25 percent still to

take back of the 2.7 million cubic metres. There have been three companies

compensated for their takeback: Weyerhaeuser and Western Forest Products, and

the minister told me today that Teal Jones has been compensated.

I listed the figures for the cubic metres for the two companies,

so how many cubic metres was Jones compensated for in takeback?

Hon. M. de Jong: The information I have for the member is

216,000 cubic metres.

I may be anticipating her next question, but the amount payable

was $5.1 million.

J. MacPhail: We're nowhere in ensuring the implementation

of 20 percent tenure takeback in the interior. We're way, way…. We're still 90

percent off the mark. Only 10 percent has been taken back in the interior.

[1540]

On the coast 75 percent of the 2.7 million takeback has occurred,

and the government has spent about $54 million. Yet here we are adding another

$50 million to the $250 million set aside two years ago for compensation for the

companies. Why?

Hon. M. de Jong: Sorry. I want to make sure I understood

the question correctly. Is the member asking why we are adding funds to the $200

million specifically allocated for the companies?

Interjection.

Hon. M. de Jong: I see her indicating that that is her

question.

It is for the following reason. We are basing the compensation

entitlement on a certain figure per cubic metre, which is $23 to $24 per cubic

metre. That's an average number. It's higher and lower, as the case may be. But

if the member — and hopefully, my math is correct — applies that number to the

amount of timber impacted, you get to $200 million.

Her question might well be: "Well, you should have enough." What

we have discovered is that in addition…. I should say, then, that we have signed

a number of deals based on that figure, and we've mentioned them to the member.

You extrapolate that number, and by the time you get to the end of the total

impacted volume — which I believe is 8.2 million cubic metres — you've exhausted

the $200 million entirely.

[K. Stewart in the chair.]

What we are also having to purchase…. We're doing this, again, to

try and ease the transition, because we want to get this fibre out there as

quickly as possible as we're purchasing improvements on the land base. We're

going into areas where licensees have built bridges and put in road

infrastructure. That's not a particularly complicated discussion, because I'm

told by the experts they're relatively easy to value. You know how much you

spent on the bridge or how much you spent on the road. We have estimated that in

order to purchase those improvements, it is going to cost, beyond the moneys we

are paying per cubic metre, an additional $50 million. That's money designed to

purchase those improvements.

The urgency, if I can use that term, is that the quicker we can do

this, the more readily that timber will be available. What we are interested in,

what B.C. timber sales is interested in, is getting at areas that are charted

and laid out so that those sales can go up as quickly as possible. Similarly, a

community forest or a first nation would like to be in a position to begin work

sooner rather than later.

We're not going to be able to accommodate everyone, but with an

additional $50 million, we're in a better position to go to some of these

licensees and say: "Look, these are the areas that we're interested in. And yes,

we recognize that you've got some improvements in those areas, but we're

prepared to purchase those improvements from you."

J. MacPhail: The minister is speaking as if he'd already

achieved the 20 percent takeback of 8.2 million cubic metres, which is simply

not true. He has only

[ Page 12012 ]

achieved two million cubic metres of takeback out of the 8.2 million.

The interior forest companies are saying over and over again:

"Don't go to the market-based pricing system, and don't do the 20 percent

takeback." Perhaps the minister could explain to me — before he starts

compensating companies for bridges and roads, before I even get into that — how

he is so optimistic that the 20 percent takeback is going to go smoothly in the

next 12 months, for which he needs this money so urgently now?

Hon. M. de Jong: Look, there's part of this that maybe the

member doesn't understand because I haven't expressed it clearly enough, and if

that's the case, then I apologize. We do approach this, perhaps differently than

other governments, by trying to assess in advance what we believe the costs are

going to be.

[1545]

I can tell the member this. We are still dealing with compensation

claims relevant to events that took place seven years ago. Part of the reason

for that is that no one actually sat down and tried to price out what this is

going to cost. Now we're trying to do that.

You know what? It's an imperfect science. The fact that we're here

today is testament to that fact, because we had made an initial assessment. We

have discovered, with the assistance of some of the stakeholders and the

trustee, that the initial assessment was incorrect. It was on the low side.

We are moving through this. We are moving ahead with the takeback

in the interior. We have certainly decided to move more quickly. We've started

on the coast. We're moving ahead in the interior. We intend to make progress. We

intend to do it in a responsible way and to minimize the disruption and, where

there is disruption, to ensure that there is compensation available and moneys

in the trust account to mitigate the impact for those affected.

The member says: "You're 20 or 25 percent of the way through."

Yes. On the coast we're further ahead. In the interior we've said all along that

it was going to take slightly more time. I don't underestimate the complicated

nature of this by virtue of the pine beetle — the significant uplifts. In a

sense, in the short term that's actually easing the transition, because there's

lots of work out there for people and lots of harvesting going on.

We're proceeding. I say to the member: we are signing agreements

with first nations, who now have 12 million cubic metres of timber in those

agreements, on the basis of advancing this. They know that. They know that some

of those volumes that are spoken to in those agreements are part and parcel of

this reallocation, so we feel an obligation — we have an obligation — to move

ahead, and we are. It's costing money in the process.

J. MacPhail: Somehow the government wants credit for

planning ahead and properly funding what the forest companies may or may not

get. Would they be so careful with long-term care beds, I ask? Absolutely not,

Mr. Chair. They make the promises to seniors and don't fund anything, don't

build anything, but with forest companies it's: "Oh boy, we've got to have that

pot full to brimming, even though we don't even need the money."

Here we have a situation where it now turns out that the 50

million bucks that the government is asking for, for the companies is something

that was to compensate them for roads and bridges and infrastructure. Could the

minister point out to me, in his original announcement, where that was

anticipated?

Hon. M. de Jong: The document I'm about to read from is the

document that was released as part of the forest revitalization plan. It's in

the

section dealing with tenure reallocation, and it speaks precisely to the

issue we are canvassing. It says right in the document: "Licensees have, over

time, invested money and taken risks to develop tenures. For example, they have

invested in planning, roads, bridges and so on. Licensees will be fairly

compensated." It talks about the tenures.

I wonder if there's a bit of a disconnect — maybe purposeful,

maybe not. The government's interest, first of all, in having these funds

available is very much driven by the desire to get timber on the market.

[1550]

We talk about the new opportunities. The new opportunities emerge

when that timber is on the market or in the hands of another licensee. It

doesn't do any good sitting on some ledger in the Forest ministry's office or in

a district office. So yes, we are endeavouring to acquire the wherewithal, where

it makes sense, to get that fibre out there and be in a position to say: "All

right. This is the area we'd like. Yes, you have a bridge there. Yes, you have a

road. You had some costs associated with that, so we're prepared to compensate

you for your timber-cutting rights. We're also prepared to acknowledge costs

associated with the infrastructure we're taking back." That is not something I'm

at all shy about. It does require an investment of some additional moneys.

The member tries to draw distinctions between treatment for the

companies and others. That's what gives rise to the request to this Legislature

for workers. We set an amount. We put some people to work or asked some people

to go to work to assess the basis upon which that money would be paid out, and

they said: "You don't have enough money." So we took steps via this

supplementary estimate to acquire the money.

I am not an economist, and I would not pretend to be an expert on

some of the issues relating to generally accepted accounting principles. But I

can tell the member this: from what I have seen over the last four years, they

profoundly impact how government finances. The member does have some

professional training in this field.

When the liability is acknowledged, it must be accounted for. We

don't have the luxury of pretending to put that off for another day. If we

acknowledge the liability with one licensee, one contractor or one em-

[ Page 12013 ]

ployee, we have to calculate how that liability accrues for anyone that might

be in similar circumstances.

That's why we have placed ourselves — happily, I suppose — in that

kind of a straitjacket which obliges us to come to the House and say: "Based on

this set of rules, this is what we think it's going to cost." Hopefully, it

won't. Hopefully, we can do better. Hopefully, the mitigation trust won't have

to expend all of the money, but we do need to know it's there, and the trustee

needs to know it's there.

J. MacPhail: That's all very well and good, but this is a

self-imposed liability, with this government's reforms. In this circumstance I'm

not taking issue with the nature of the reforms. We've debated that at length.

This is self-imposed. Taxpayers deserve a cost-benefit analysis of self-imposed

liabilities. That's what we're talking about right here.

This is the second time this minister has come back for more

money. It turns out that the roads and the bridges are going to cost an extra 50

million bucks to the taxpayers — $50 million. He just said that. The full $200

million will be taken up by compensation on a per-cubic-metre basis. Well, gee,

that's what you call negotiating to the ceiling, isn't it? I know previous

colleagues of mine used to negotiate to the ceiling.

You've got 200 million bucks. You've got 8.2 million cubic metres

of takeback. I guess the companies would just divide the two and go: "Gee,

that's what our costs are." That's a brilliant strategy on the part of the

government — brilliant. It turns out that the companies came up with the exact

figure of per-cubic-metre compensation that totals $200 million. Then they come

and say: "Oh, we also need roads and bridges." Who's looking after the taxpayer?

Who's determining compensation for infrastructure? How is that working?

Hon. M. de Jong: My apologies to the member. Was the

question how are we quantifying the additional $50 million or how are we

quantifying the $23, $24 figure?

[1555]

J. MacPhail: I want to know who's looking after the

taxpayer in doling out the extra 50 million bucks that the minister said we now

need to compensate the companies for infrastructure. Who's looking after that?

Who's negotiating that, and upon what basis are the rules applied about

compensation for infrastructure?

Hon. M. de Jong: Well, first of all, who is doing it?

There's a team in place that is dealing with the reallocation as it relates to

the discussions around compensation payments. There is a team as well. I can

tell you that the deputy minister, who obviously is here today, has been

intimately involved in the three negotiations and agreements that have been

signed off on thus far. Perhaps more importantly for the member, there is a set

of guidelines that govern those discussions, and I just asked the deputy…. It

may be helpful for the member to have those guidelines so she can understand

what government negotiators are taking into those discussions.

J. MacPhail: Well, where are the guidelines? When can I get

them? Are they public?

Hon. M. de Jong: I don't know that it would be fair to

characterize them as being public, but I can certainly endeavour to get them for

the member as quickly as possible.

J. MacPhail: That's what we're actually debating today: an

expenditure of $50 million to compensate forest companies for their

infrastructure that they put into areas that are now going to be part of the 20

percent tenure takeback. I would have thought that we would have that

information here. I mean, it does seem to be the basis upon which we're supposed

to be deciding whether this is a good expenditure or not, so I'm a little bit

taken aback that that's not here.

I'd like the names of the negotiating team as well. Who's

negotiating on the other side? Who's negotiating for the companies?

Hon. M. de Jong: You know, hon. Chair, I have always

endeavoured to ensure that the member has material that will assist her through

these debates. I apologize for the fact that a document that I'm happy to

provide to her isn't here. But insofar as negotiating on the other side of the

ledger, these negotiations don't…. This isn't some big group session that goes

on. The discussions take place between the licensee and the government, and each

licensee appoints someone within their organization to take the lead. With the

remaining licensees, I'm not sure, off the top of my head, who is representing

each licensee, but they appoint from within their organization who they want to

have dealing with government.

J. MacPhail: There must have been someone from each of the

licensees saying: "Here's our inventory of infrastructure for which we want

compensation." Then the government negotiator said: "Oh well, here's the value

of it, and it reaches $50 million." That's what we're discussing here — $50

million for infrastructure. Was it pulled out of the air? Where's the inventory?

Where's the list of items that should be compensated?

[1600]

Hon. M. de Jong: We have had these discussions and these

negotiations with the licensees. Three of them have led to agreements. Look, we

would have been happy to try and push that $23 or $24 figure lower.

The member may want to look back on some other agreements that

have been signed and may find interesting the amounts that were assigned there.

We got to $23 or $24. We are relatively certain, as we look ahead, that other

licensees are going to look at those agreements and say: "We want at least that

amount for our cutting rights." We extrapolated that figure and discov-

[ Page 12014 ]

ered that by the time you dealt with 8.2 million cubic metres, it doesn't

leave anything for the improvements we think we are going to need and want to

purchase to get on with the task of the transition and making sure people are

continuing to work.

You look at what happened with Weyerhaeuser, with Western and with

Teal Jones. There are improvement costs there. We really get into a

drainage-by-drainage assessment, and there is an averaging process. The

average…. I can't remember how many cubic metres were involved in the

Weyerhaeuser takeback — a significant amount. We look at that, and in addition

to that, there are improvements. We try to come up with an averaging figure on a

per-cubic-metre basis. You apply that across the overall $8.2 million, and it

takes you to $50 million.

J. MacPhail: There are all sorts of areas in this

government where they do no planning whatsoever, even when they make promises,

and they don't allocate any money. Long-term care would be one. But here we have

it where — oh my gosh, the forest industry — we've got to make sure they know

they can get every nickel possible that is deserving.

Well, I have the figures here. Weyerhaeuser had a takeback of

980,000 cubic metres, and they got $32.1 million. What portion of that was for

compensation for infrastructure, and can the minister tell me for what

infrastructure?

[1605]

[J. Weisbeck in the chair.]

Hon. M. de Jong: In the case of Weyerhaeuser, our best

recollection of the agreement that was signed is that of the $31 million,

somewhere in the neighbourhood of $24 million would have been applicable to the

per-metre cost of the lost cutting rights, leaving the balance to be applied to

such things as fixed costs and structural improvements.

J. MacPhail: I actually figured that out myself based on

previous information. I'm asking: what were the fixed costs? What were the

improvements for which Weyerhaeuser was compensated? The minister said that was

the basis upon which they extrapolated up to $50 million, and that's why we're

voting 50 million bucks now. I just want some detail. Was it for a bridge? Was

it for a tractor? Was it for a road? What?

Hon. M. de Jong: Broadly speaking, of course, bridges,

roads. We're talking about the Weyerhaeuser deal in particular. We tried to

identify some developed cutting blocks, the idea being that they could then be

on the market. As we speak, I am endeavouring to obtain a more detailed listing

of what some of that infrastructure would have been. I can pass it on to the

member.

J. MacPhail: I sure hope the minister can provide these

details. One company gets $8 million for compensation for things, and the

government can't tell me what it's for. It's not for trees. They've already been

compensated $24 million for the trees. Fully $8 million more to one company, and

the minister can't tell me what it's for. Well, whoa. I'm sure the taxpayers

won't be that thrilled about that, let alone the communities who will be

ill-affected by this.

Anyway, I have promised to be efficient in this Legislature, but

of course efficiency and competency require double participation here. I can't

get my answers, so I'm going to move on. But believe you me, the minute I get

that information about…. Here is what I want, Mr. Chair. Specifically, I want an

inventory of items for which Weyerhaeuser, Teal Jones and Western Forest

Products were compensated for infrastructure — not for loss of cutting rights,

but for infrastructure. That's what this 50 million bucks we're approving today

is for — $50 million of taxpayer money.

I'm going to move on to the revitalization trust. The

revitalization trust is set up to manage the moneys which will then be awarded

to workers as severance for loss of their jobs in the takeback of timber. The

mitigation guidelines in the revitalization trust — I've read them — say: "The

province specifically denies any legal obligation to provide compensation to

workers and contractors affected by the Forestry Revitalization Act timber

reallocation provisions." The trust then goes on to state that the trust is a

matter of policy, and it does not limit further actions by government to address

the impacts of the takeback.

[1610]

Given that information I've just read, does that mean that the

government is considering policies or compensation for those who are indirectly

affected by the takeback?

Hon. M. de Jong: The fund has been created. There are

defined groups who are entitled, and they are set out…. There is a definition

within the trust deed instrument, and then the guidelines further guide who may

be entitled. To the extent that there may be other people who would argue an

impact, I can give the member an example.

There have been arguments from contractors in the interior, fairly

strenuous arguments. Contractors with non-replaceable cutting rights — that is,

they have a fixed-term contract — are arguing that at the conclusion of that

contract, the reallocation may impact their ability to renew it. They have

argued that they should qualify. We have said no. The fund is not there, and we

haven't funded any additional assistance beyond what is there.

J. MacPhail: I was curious as to why the trust says that it

doesn't limit future actions by government to address the impacts of the

takeback. I was wondering: is there consideration to compensate communities that

have been adversely affected?

Hon. M. de Jong: Not in the sense that I think the member

is referring to, though I would argue that one

[ Page 12015 ]

of the benefits of proceeding with the reallocation relates to our ability to

create a record number of new community forests. Whether that fits within the

definition of compensation or not…. I don't think it does in the way that the

member is referring to it.

J. MacPhail: Well, no. I don't think community forest

licences are awarding that as part of the trust. Sorry. Did I misunderstand?

Hon. M. de Jong: No, and it wasn't my intention to leave

that impression. It is obviously a result or a part and parcel of the

reallocation. But no, it is not contemplated specifically within the terms and

provisions of the trust.

J. MacPhail: The advisory board as listed in the trust

right now,

section 501, has a whole bunch of different descriptions for

nominees. For instance, there should be a nominee from the southern interior

forest region, from the northern interior forest region. Are all of those

positions filled on the advisory board?

Hon. M. de Jong: All of the positions were filled. I'm

advised by the deputy that there have been some changes. For example, one of the

licensee's representatives has changed. At the time the guidelines were

finalized, all of the positions were filled, but there has been some change in

the makeup in terms of individuals.

[1615]

J. MacPhail: The minister referred earlier to the

administration account of the trust and that the trust actually allocates $5

million for administration. The minister has suggested that that may not all be

needed. I would like an accounting to date of expenditures on administration of

the forestry revitalization trust.

My last area of exploration with this minister is on

reforestation. Can the minister refresh my memory on how much is being allocated

for reforestation out of this supplementary estimate?

Hon. M. de Jong: The answer is $11.2 million.

J. MacPhail: The minister is allocating just a little bit

more than $11 million of this year's money to reforestation. It's called

"silviculture." It's the word people use for planting trees. We have had forest

fires and pine beetle, and this government is now allocating $11 million for

reforestation.

Last month the B.C. silviculture association told us of the

dramatic decrease in government moneys going into reforestation. In fact, I

think there has been about a $100 million reduction in reforestation invested by

this government. Some would say this money is welcome but is a temporary

measure. What's the new commitment in the budget of '05-06 for silviculture in

addition to this?

Hon. M. de Jong: First, the figure for the coming year and

ahead: $86.2 million in each of the subsequent three years. But the member said

something which I need to acknowledge. That's not enough, with the combination

of the forest fires and particularly the pine beetle, and I think the member

knows this.

It's not really a case of concern around where the accelerated

harvesting is taking place, because the licensees sign on and acquire that

obligation, but there are a lot of areas where you have dead stands of timber.

In fact, the latest estimate…. I saw a figure printed of six million hectares.

The number I have from the chief forester's office is actually seven million.

[1620]

The problem is that there are areas where harvesting is not

viable. Commercially, it's not viable, and we do have an objective of getting

those areas replanted. We've quantified that. I'm not sure how widely known this

is, but we are in the process of negotiations with the federal government aimed

at obtaining a sizable chunk of money. I believe we have estimated costs

relating to the pine beetle in the neighbourhood of $800 million to $1.5 billion

over the next ten years, and a big whack of that relates to silviculture.

There are all the reasons for accelerating that silviculture,

trying to shorten the gap for the downward spiral and available timber in the

out years. There are forest health reasons; there are environmental reasons. We

are trying to work with the federal government to bolster that figure. It's no

secret out there that there are some pretty significant tracts of land that are

going to require funding because they won't be replanted by licensees, because

licensees won't be working there.

J. MacPhail: Is this $11 million being rolled into the

'05-06 base budget for silviculture, for reforestation?

Hon. M. de Jong: I have to correct a pretty fundamental

point, in jeopardy of misleading the member. We had an amount that was spent on

silviculture work this year. This part of the supplementary estimate was for an

additional $12.5 million. Over the next three years the amount is due to

increase $86.2 million. That would be $86.2 million above what was being spent

this year and in past years, but it is to be spent over three years, not in each

of the three years, as I think I suggested to the member a few moments ago.

J. MacPhail: Maybe the minister could help all of us and

tell us what the '04-05 budget was for reforestation silviculture prior to this

supplementary estimate, then with this supplementary estimate and then what the

budget is for '05-06, '06-07, '07-08.

[1625]

Hon. M. de Jong: The amount for this year was $3 million,

so the additional $12.5 million would be on top of that. It works out over the

next three years, as I said, to an additional $86.2 million, but the initial

figure was $3 million.

J. MacPhail: I don't know why it's so hard to just name

numbers.

[ Page 12016 ]

The original figure was $3 million for silviculture in the '04-05

budget. We're adding about $12 million now, so we're up to around $15 million at

the end of '04-05. Is the budget for '05-06, $15 million plus $86 million?

Hon. M. de Jong: It's $26 million for '05-06.

J. MacPhail: Okay. I'm so glad I ask questions, because,

boy….

So now it's not $86 million; it's $26 million in '05-06. Maybe by

'07-08 we'll have…. I don't know; who knows what it will be up to? Maybe $30

million, but that means that over those three years it was a total of 86 million

bucks. Who knows? Anyway, it ain't a lot of money for replanting trees.

What's the backlog of needed reforestation?

Hon. M. de Jong: Some of the numbers I'm referring to do

appear in the service plan. The way this is measured, I have learned, is on a

ratio — trees planted for trees cut. What one strives for is 1 to 1.

As I go through what is taking place, I want to emphasize that

licensees are still obliged to fulfil their obligation. So it is in those areas

where there are no licensees — where the Crown has responsibility and where the

Crown doesn't do it; no one does — that this is relevant. This year that ratio

has dropped to 0.82 to 1. Unless we find some significant resources in three or

four years, it will go down to 0.6.

That's what we're staring at. It goes to the member's point about

the extent of the problem and the requirement for resources.

J. MacPhail: Indeed, even with this investment going from

$3 million to $15 million to $26 million, there is still a declining return in

terms of reforestation.

I would recommend to the minister that this would be a very good

area in which to invest very quickly. Clearly, we're not investing in this

upcoming budget. There is not enough money in the upcoming budget, this election

budget, to have anything but a declining reforestation rate.

[1630]

This is extremely serious, given that the province still has a

resource-based economy. This government has done nothing to diversify the

economy, and now a declining ratio of reforestation is going to be very harmful

to the economy. Where is this money going to be spent? What are the priority

areas?

Hon. M. de Jong: In general terms, we'll focus in on the

higher-productivity sites — those areas where we don't actually have licensees

located at the moment to assume that obligation, but where the return for the

money spent will be greatest and quickest. The second broad category would be

environmentally sensitive areas that have been impacted either by fire or by the

pine beetle.

J. MacPhail: I will reserve the rest of my questions for

the upcoming estimates budget debate for '05-06 on forestry.

Vote 24(

S) approved.

Hon. M. de Jong: I move that the committee rise and report

resolution.

Motion approved.

The committee rose at 4:32 p.m.

The House resumed; Mr. Speaker in the chair.

Committee of Supply reported resolution.

Mr. Speaker: When shall the report be considered?

Hon. C. Hansen: Forthwith. I move that the report of

resolution from the Committee of Supply on February 21, 2005, be now received,

taken as read and agreed to.

Motion approved.

Hon. C. Hansen: I move that there be granted from and out

of the consolidated revenue fund the sum of $112.5 million. This sum is in

addition to that authorized to be paid under

section 1 of the Supply Act,

2004-2005, and is granted by Her Majesty towards defraying the charges and

expenses of the public service of the province for the fiscal year ending March

31, 2005.

Motion approved.

Introduction and

First Reading of Bills

SUPPLY ACT, 2004-2005

(SUPPLEMENTARY ESTIMATES No. 2)

Hon. C. Hansen presented a message from Her Honour the

Lieutenant-Governor: a bill intituled Supply Act, 2004-2005

(Supplementary Estimates No. 2).

Hon. C. Hansen: I move that the bill be introduced and read

a first time now.

Motion approved.

Hon. C. Hansen: The use of supplementary estimates is

consistent with the spirit of the Budget Transparency and Accountability Act.

This supply bill is introduced to provide supply for the operation of government

programs for the 2004-05 fiscal year, as outlined in the supplementary estimates

(No. 2) tabled earlier.

[1635]

The bill will provide the additional funds required to defray the

charges and expenses of the public service

[ Page 12017 ]

of the province for the fiscal year ending March 31, 2005. In accordance with

established practice, the government seeks to move this bill through all stages

this day.

Mr. Speaker: Hon. members, in keeping with the practice of

this House, the bill will be permitted to advance through all stage in one

sitting.

Bill 9 introduced, read a first time and ordered to proceed to

second reading forthwith.

Second Reading of Bills

SUPPLY ACT, 2004-2005

(SUPPLEMENTARY ESTIMATES No. 2)

Hon. C. Hansen: I move Bill 9 be now read a second time.

Motion approved.

Hon. C. Hansen: I move the bill be now referred to a

Committee of the Whole House for consideration forthwith.

Bill 9, Supply Act, 2004-2005 (Supplementary Estimates No. 2),

read a second time and referred to a Committee of the Whole House for

consideration forthwith.

Committee of the Whole House

SUPPLY ACT, 2004-2005

(SUPPLEMENTARY ESTIMATES No. 2)

The House in Committee of the Whole on Bill 9; J. Weisbeck in the

chair.

The Chair: Hon. members, we're going to have a brief recess

while the bill gets distributed throughout the chamber.

The committee recessed from 4:36 p.m. to 4:38 p.m.

[J. Weisbeck in the chair.]

Sections 1 and 2 approved.

Schedule approved.

Preamble approved.

Title approved.

Hon. C. Hansen: Mr. Chair, I move that the committee rise

and report the bill complete without amendment.

Motion approved.

The committee rose at 4:39 p.m.

The House resumed; Mr. Speaker in the chair.

Report and

Third Reading of Bills

Bill 9, Supply Act, 2004-2005 (Supplementary Estimates No. 2),

reported complete without amendment, read a third time and passed.

[1640]

Supplementary Estimates

Hon. C. Hansen presented a message from Her Honour the

Lieutenant-Governor: supplementary estimates (No. 3) for the fiscal year ending

March 31, 2005.

Hon. C. Hansen moved that the said message and the estimates

accompanying the same be referred to Committee of Supply.

Motion approved.

Committee of Supply

The House in Committee of Supply; J. Weisbeck in the chair.

The committee met at 4:42 p.m.

SUPPLEMENTARY ESTIMATES:

MINISTRY OF AGRICULTURE,

FOOD AND FISHERIES

On vote 10(S): ministry operations, $27,200,000.

J. MacPhail: I'm going to start by reading aloud an open

cabinet update, an agricultural update, from September 29, 2004. My questions

will flow from that update and will be relevant to this supplementary estimate.

The hon. Minister of Agriculture, Food and Fisheries is speaking as I quote:

"Thank you, Premier. I'm pleased to give cabinet an

update on the two major issues that we've been facing in agriculture. If I was

to characterize the current status, I would say that farmers and ranchers have

certainly been through tough times, but they're weathering the storm. I think

collectively, with our two senior levels of government, that agriculture is

turning things around and moving ahead."

I continue, Mr. Chair.

"If we look at the two major industries affected, the

cattle industry and poultry industry, we see that a significant part of our

agricultural economy was impacted. A $318 million industry was affected by the

May 20 announcement of BSE found in Canada, and that's the cattle industry. A

$350 million poultry industry was very directly impacted by the high-path

avian influenza virus turning up in our province.

"These two commodities represent over 30

percent of all B.C. agriculture, so they are very significant players

in our economy."

[ Page 12018 ]

That's the end of the quote. That was an agricultural update given

on the open cabinet meeting of September 29, 2004, by the current minister. So

my questions flow from that.

Although the situation is still ongoing in terms of assessment and

final solution — i.e., opening the U.S. border — we're weeks away from that, a

couple of weeks away from that as I understand it. Can the minister comment on

what the total impact of these two issues was on the industries and the economy?

[1645]

Hon. J. van Dongen: The economic impact to the industry at

the farm-gate level in a one-year period in the poultry industry was

approximately $65 million in terms of margin decline for the industry at the

farm gate. The figure we have for the beef industry is that the gross revenues

decline from about $320 million per year to $215 million in 2003. That gives the

member some estimate of income and margin decline in those two industries.

J. MacPhail: So, a loss of about $65 million per year in

poultry and a loss of about $105 million per year in the cattle section. What in

today's supplementary estimates reflects the government funding to help mitigate

the damage that was done to the industries and the economy?

Hon. J. van Dongen: The dollars in these supplementary

estimates that relate to the beef and poultry industry are two amounts — one,

$7.2 million, and the other, $4.5 million. Those two figures represent the

uplift to the CAIS program that is part of the $14.7 million that's shown in the

supplementary estimates document under "Risk Management."

J. MacPhail: I hope, for the minister's sake, that he will

explain what CAIS management and all of that is, because of course the public

doesn't understand this. And did I hear the figures $1.7 million and $4.5

million? I may have misheard them. Also, could the minister explain what that

help is?

Hon. J. van Dongen: The first number was $7.2 million for

the CAIS program, and then $4.5 million.

[1650]

The support that the provincial and federal governments gave to

the beef industry is a combination of the existing federal-provincial program

which is called CAIS — Canadian agricultural income stabilization program…. This

is a program that is designed to measure and provide some share of income loss,

where governments support producers carrying some share of the risk of income

loss from events such as BSE, AI, disastrous world markets and weather events.

That program was utilized significantly to help provide some support to the beef

industry.

There were a number of modifications made to the program to

expedite the availability of funds under that program. There were also some

additional federal-provincial and sometimes provincial programs done in addition

to that. The dollars that are part of this discussion form a small part of the

total dollars that were available to producers, particularly in the BSE event,

which has now gone on for about 22 months. Similarly, in the poultry industry,

the income loss that producers suffered…. They will vary a lot depending on

which poultry commodity was involved, but the poultry commodities are eligible

for the CAIS program — at least the disaster component.

The program has two components: what's called a disaster

component, where there is a very major income loss; and a stabilization

component, where there is a more moderate income loss. For producers under

regulated marketing, they have that CAIS program available to them. Those are

calculated at year-end based on income tax returns.

The major compensation to the poultry producers is the Health of

Animals Act payment made by the federal government, because this is a federally

regulated and federally listed disease. The major compensation comes when there

is notice given to the producers that those birds need to be depopulated. That's

where the major recovery comes. The subsequent backup support comes from the

federal and provincial governments through the Canadian agricultural income

stabilization program.

J. MacPhail: Okay, so that's income stabilization. I notice

that there's money being given in this supplementary estimate for industry

competitiveness — $9.1 million. Where is that money flowing to? What has the

minister done in that area?

Hon. J. van Dongen: The three categories of expenditure in

the industry competitiveness core business area include $3.5 million for the

science and innovation fund. This fund will provide B.C. agriculture, food,

beverage and agro-biotechnology sectors with the opportunity to move innovative

ideas through research and the commercialization process, resulting in economic

growth to the province.

Secondly, there is $1 million earmarked for the 2010 industry

opportunities fund. Its purpose is to promote B.C. food and beverage products

and agriculture and cuisine tourism initiatives in connection with the federal,

provincial and industry 2010 marketing initiatives.

Finally, there is $4.65 million earmarked for the orchard replant

program for transitional funding to enable the B.C. tree fruit industry to

develop and implement a grower-financed orchard replant program to convert

traditional low-density orchards to improved tree fruit varieties planted at

higher densities. Those are the three expenditures in the core business area

that the member referred to.

J. MacPhail: So there's no money for either the poultry

industry or the cattle industry to enhance industry competitiveness. What was

the effect of BSE and avian flu on, respectively, the cattle industry and the

poultry industry competitiveness? Was there no effect?

[ Page 12019 ]

[1655]

Hon. J. van Dongen: We have allocated certain funds from

other parts of the ministry budget, particularly from contingency funds, for the

poultry industry and the beef industry in terms of providing additional

resources to overcome some of the effects of AI and BSE. In particular, we have

earmarked $3 million for the poultry industry to do a number of things,

including improved biosecurity for the future, improving genetics and rebuilding

genetics for the specialty poultry industry, and support for what is an

industry-driven biosecurity protocol committee.

We have also earmarked $5 million for dealing with a range of

needs and impacts on the cattle industry, particularly the impacts on waste

disposal. Where the ruminant waste material historically was an economic

value-added product, it is now a cost and a disposal issue. Our ministry has

earmarked $5 million to work with the industry, to work with the Canadian Food

Inspection Agency, to deal with some of those impacts on the industry as a

result of BSE and to have a long-term proactive approach to helping the industry

cope with those changes.

J. MacPhail: To what contingency fund is the minister

referring?

Hon. J. van Dongen: The contingency fund which is managed

by the Ministry of Finance on behalf of the government.

J. MacPhail: On this industry competitiveness fund of $9.1

million, which doesn't have anything to do with the two major areas of concern

in terms of competition…. We have one fund for science innovation, one fund for

2010 industry opportunities and $4.6 million for tree replanting, orchard

replanting.

I note that this fund for industry competitiveness decreases in

the '05-06 budget. Then again in the '06-07 budget, it decreases substantially.

Why is that? Are these not ongoing needs for competitiveness?

Hon. J. van Dongen: I don't have numbers for subsequent

fiscal years here. We came prepared to speak about the supplementary estimates

for '04-05. I could certainly try and get those numbers, but we were here to

deal with supplementary estimates.

J. MacPhail: Yes, I'm sure you were. God forbid that you

look at anything else.

My question is about supplementary estimates for competitiveness,

though. It's $9.1 million this year. Next year it falls to $6.416 million and

the year after that to $5.916 million. Why is it that just prior to an election

it's so high? What's the need that disappears after the election?

[1700]

Hon. J. van Dongen: The $9.1 million for '04-05 are

one-time dollars. Those dollars were budgeted because they were available due to

the surplus this fiscal year.

J. MacPhail: So they are election goodies. Well, that's

terrific. Very interesting. What are the performance measures that you've

established for these election goodies?

Hon. J. van Dongen: All of these investments are sound

investments on behalf of the industry. They were intended to increase capacity

within the industry to deal with future events. They're intended to improve

capacity in the area of biotechnology, particularly in plant biotechnology. With

respect to the tree fruit replant program, there were a number of acres from the

previous program that were not funded. This will give an opportunity for all of

those applications to be funded.

J. MacPhail: Oh, those are very specific. This is a 20

percent increase in this minister's budget. I want to know what the performance

measures are. Let's just look at the $4.6 million for orchard replanting. What's

the performance measure? Who's getting that money? What's the expected outcome?

Is that ongoing money for '05-06, '06-07?

Hon. J. van Dongen: The orchard replant program is a very

progressive program that has stood the test of time. Our ministry, despite a 27

percent reduction in the overall budget three years ago, maintained every dollar

in that program. It is a program that has been proven to significantly improve

the competitiveness of the industry. It has allowed the industry to overcome

some of the very high upfront costs of investing in new varieties, in new

planting systems, in systems that are environmentally friendlier, in systems

that are easier to operate from a labour point of view and in new varieties that

are able to develop exclusive positions in markets.

This program has proven its effectiveness through successive

governments. I might note that the previous government did reduce the funding

for the program and recognized the error of that decision. Our government had

maintained all of these funds, and we have provided these additional funds to

help meet the original commitments of the program. The funds will be turned over

to Investment Agriculture, who will work with the industry to manage and get the

best value for this money.

[1705]

J. MacPhail: This government didn't have any commitment to

it. It's coming in, in a supplementary estimate, just before the election, and

it's not being carried on in the following year. There are no performance

measures attached to it.

What the minister just said is just his view. How much is the

government getting — demanding — in terms of plantings per acre, for instance?

What is each orchardist getting in terms of conversion to a particular grape? Is

there a particular grape that's being promoted? You didn't answer any of those

questions.

Okay, what about the Olympic fund there? What's that for — the

industry opportunity fund? Perhaps the

[ Page 12020 ]

minister could outline some of the opportunities that would be available.

Hon. J. van Dongen: These dollars are intended to assist in

the planning for a range of agricultural and agrifood products, including

agritourism. It would include things like agritourism, cuisine tourism,

garden-inspired tourism, wine tourism and sport fishing tourism.

All of these products, whether it's tourist-oriented products or

actual agrifood products…. The planning for that needs to start early. It is

less than five years to the Olympics, and these dollars will provide assistance

to plan and gear up for the provision of agrifood products to the Olympics. They

will include promotional informational materials for international markets;

media campaigns in Europe, Asia and the U.S.; market research; and consumer

demand, tracking and response.

[H. Long in the chair.]

J. MacPhail: Who gets the million bucks? Who's doing all of

this work?

Hon. J. van Dongen: These dollars will be vested with the

Investment Agriculture Foundation, and there will be matching dollars from

industry in terms of…. They will take applications for qualifying projects.

There will have to be matching dollars from industry to trigger any of these

dollars. Investment Agriculture has a very good record of managing these types

of funds, and there has to be a major commitment from industry to trigger some

of these incentive dollars.

J. MacPhail: Investment Agriculture Foundation reports

when? Has it issued an annual report? When can we expect an annual report? Is it

subject to FOI?

Hon. J. van Dongen: Investment Agriculture is a society

that reports on an annual basis. Its fiscal year ends December 31. Its report

will be out sometime in early April. Those reports are available. It gives a

full accounting of the funds that they are managing and the provisions that are

followed in terms of release of those funds.

J. MacPhail: Yes, this was set up by the Liberals, Mr.

Chair. So it will be very interesting to see what the accounting of it is.

[1710]

Interjection.

J. MacPhail: No, it wasn't? Perhaps you could explain who

it is, then, that's getting this million bucks.

Hon. J. van Dongen: Investment Agriculture is a society, as

I said, that was set up in 1996-97 with the support of both the federal and

provincial governments of the day. The board of directors is composed of a

variety of representatives from the agrifood industry, including some processor

representation. It also includes non-voting representation from both the federal

and provincial governments through people with the ministries of Agriculture. As

I said, they do publish the release of funds.

The member asked: where do the funds go? They go, generally, to

industry commodity organizations that develop programs and projects on behalf of

their overall industry.

J. MacPhail: Sorry, Mr. Chair; I'm completely unaware of

this program. Give me an example of what they'll do with this million bucks, and

also tell me what the formal commitment is from industry for industry-matching

dollars. Where can I find that?

Hon. J. van Dongen: The funding for industry-driven

projects is generally more than 2 to 1 industry dollars to trigger some

government dollars. As I said, the board is controlled by a variety of

agricultural industry and agrifood industry representation.

The process involves commodity organizations developing

applications for projects based on a rigorous set of criteria. The projects have

to be beneficial to the overall industry, and all the research and information

have to be available to the overall industry. The reporting on the projects is

in the annual report of Investment Agriculture, and I would be pleased to

provide copies of past reports to the member.

J. MacPhail: I want to continue on with the minister's report

to cabinet on September 29, 2004. I'm going to quote the minister directly from

his open cabinet update. Let me continue:

"The last time I reported on the avian influenza

situation, I indicated to cabinet that it looked like things were turning

around. I can certainly confirm today that things are turning around. They're

looking much better. We know the high pathogenicity of the AI virus we had….

We believe we have beaten that virus, and things are gradually getting back to

normal.

" The disease was found originally in

February on a farm in Abbotsford, and then we got a number of

additional cases in April. In early April, on April 5, the decision was made

by the Canadian Food Inspection Agency to take down the whole poultry industry

in the Fraser Valley. That decision was supported by the industry and our

government, and we worked together to accomplish that. By August the

depopulation was fully completed, and the cleaning and disinfection were fully

completed. Farmers were putting birds back into their barns. The current

situation is that there have been no new instances, and we are confident that

the avian influenza virus that existed has been dealt with."

[1715]

In September '04 the minister stated that he was confident the

avian influenza virus that existed had been dealt with. What lessons did the

ministry learn from the avian influenza outbreak, and what steps have been taken

to mitigate similar outbreaks in the future?

Hon. J. van Dongen: It needs to be stated first off that

the Canadian Food Inspection Agency and the

[ Page 12021 ]

federal government had the main jurisdiction in dealing with the disease. We

cooperated with them and assisted them, particularly with respect to the

provision of lab services, through our modern lab in Abbotsford — our animal

health and plant health lab. We also worked with them in terms of bringing in

assistance from the provincial emergency program to assist in executing the

depopulation.

Some of the lessons learned were discussed on October 26 and 27,

when we had a conference that was co-sponsored by the federal government, the

provincial government, our ministry and the industry. It was an open dialogue

with all of the industry players — everyone that had been involved in the

process — and also included some outside speakers. There were 15 recommendations

that came out of that two-day conference that are in various stages of being

implemented now by both federal and provincial agencies.

One of the key things we believe we need to do is update the

emergency agreements, the foreign animal agreements we have for dealing with

foreign animal disease. We also need to have better protocols with all of the

various agencies when an event like this happens. We also believe that there

needs to be a review of the valuation, particularly of specialty birds, under

the Health of Animals Act, which is a federal act. As I said, there are a number

of specific recommendations that came out of the process that we are working on

in terms of implementation.

J. MacPhail: I'm trying to figure out what part of today's

supplementary estimates reflects what the minister has just said. Could he tell

me? Where is all this work being done, and is it reflected in these