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

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

MONDAY, JUNE 28, 1993

Afternoon Sitting

Volume 11, Number 17

[ Page 7911 ]

The House met at 2:04 p.m.

Prayers.

Hon. D. Miller: In the members' gallery today we have a prominent member of the British Columbia's consular corps, Mr. Tony Joy, the consul general of the United Kingdom. He is accompanied by his wife, Lena Joy. The Joys have been in British Columbia for three years and will shortly be off to their new posting in Rio de Janeiro. Believe me, Vancouver is a preferred posting. On a personal note, I would certainly like to wish them well. Mr. Joy has served the interests of his nation exceedingly well here in British Columbia. I would ask all members of the House to join me in wishing them all the best in the future.

Hon. A. Petter: In the gallery today is a constituent of mine, Helen Ayers, who has joined us, along with a friend of hers, Catherine Logan from Auckland, New Zealand. I would ask the House to make them both very welcome.

J. MacPhail: I am sad to rise to say that a group of people who have been with us for the last several months are leaving us today. The legislative interns finish their session with us at the end of this month, on Wednesday. I know that I am joined by my colleagues across the floor when I say how wonderful they have been to all of us, in the assistance we have received. While they have gone through a great learning experience, so have we from them. To all of them, I say thank you very much.

C. Serwa: Today I have the honour to introduce two friends from Kelowna: Jacqueline and Jack Pinder. Jack works with Western Star Trucks. He's the contract manager for the NATO light-service vehicle, a Department of National Defence contract. He shared some good news with me today. Western Star is up to 12 trucks in production and is shipping them all over the world; and the testing for the prototype NATO light vehicle is progressing very well. Would the House please make them welcome.

N. Lortie: We have two visitors in the House today from my constituency of Delta North. They are two very active constituents: Eliza Olson, president of the Burns Bog Conservation Society; and Jennifer Lee, an active member of that organization. They're here today to witness me table a petition on their behalf. I hope the House will make them very welcome.

D. Mitchell: There is a group of individuals who work much harder than any of the members in this chamber. They are our constituency assistants. I have the pleasure to introduce my constituency assistant, who is here for the first time today to observe the proceedings in this House. Would the House please welcome Mr. Adam Korbin.

K. Jones: Visiting in the precincts today are 14 members of a delegation from the Republic of China. They are from the city of Taian in Shandong province and are with the Taian Association for International Exchange of Personnel. I'd like the House to give greetings to these people. They are somewhere in the precincts at the moment.

F. Gingell: I rise in the House today to speak to the memory of Douglas Turnbull, a former Liberal MLA and cabinet minister, who died last Wednesday, June 23, at the age of 90. Originally from St. Mary's, Ontario, Douglas Turnbull and his wife, Elsie, settled in Trail, British Columbia. He became involved in politics, was first elected as the provincial candidate for Rossland-T rail in 1948 and became a Member of the Legislative Assembly in the general election of 1949.

Serving under Premier Byron Johnson's coalition government in the early 1950s, Douglas Turnbull was appointed to a number of high-profile cabinet positions. As Minister of Health and Welfare, Minister of Municipal Affairs as well as Minister of Trade and Industry, his potential was recognized early. He was chosen to move the throne speech reply at the opening of the House on February 15, 1950. In his various portfolios, he spoke out on the importance of health care as well as the need for British Columbia to develop secondary industries in order to capitalize on the processing of our own natural resources.

He was also an advocate of Buy B.C. as a means of creating employment and stimulating local industry.

On a more personal note, Mr. Turnbull was a longtime member of the Victoria Natural History Society and is recognized for his contribution as one of the founding presidents of the Friends of the Provincial Museum. An honorary member of the Liberal caucus, Mr. Turnbull has visited our offices on a number of occasions, and his picture remains in longstanding memory of his political and personal contributions. I would ask the House to recognize the achievements of Douglas Turnbull and to take a moment to acknowledge his passing.

Hon. B. Barlee: That was a glowing tribute to Douglas Turnbull. His wife Elsie is not well, as you probably know. They are longtime residents of the Kootenay area. He worked for the Consolidated Mining and Smelting Company. A man with a very wide-ranging intellect, he was, I think, a very rational and well-respected politician -- which is unusual sometimes in this particular business we're in. We add our sympathies to Elsie, who, as I say, is indeed not very well.

Orders of the Day

EMPLOYMENT STANDARDS AMENDMENT ACT, 1993

Hon. M. Sihota presented a message from His Honour the Lieutenant-Governor: a bill intituled Employment Standards Amendment Act, 1993.

[ Page 7912 ]

Hon. M. Sihota: Hon. Speaker, the bill I'm introducing to the House today corrects a ten-year anomaly in the Employment Standards Act that made British Columbia the only province in Canada to allow parties in collective bargaining to contract out of the employment standards legislation. These amendments are based on a report by Prof. Mark Thompson, which is also being released today. As Professor Thompson notes in his report, it is highly unusual for any government to permit parties to negotiate away the basic protections of social legislation, but that is precisely what was done ten years ago by the then government when it allowed, under

section 2(2) of the Employment Standards Act, for collective agreements with provisions less than the minimum standards required. The amendments in this bill correct this anomaly, so that parties to collective agreements will no longer be able to negotiate standards less than the minimum requirement set out in the Employment Standards Act. The amendments return integrity to the act and ensure that all workers in British Columbia will receive a basic level of protection in the workplace.

I'm sure all members will agree with the important principle behind these amendments to preserve the autonomy of collective bargaining relationships while at the same time providing a minimum floor on employment standards for workers.

Bill 65 introduced, read a first time and ordered to be placed on orders of the day for second reading at the next sitting of the House after today.

[2:15]

Oral Questions

CLAYOQUOT SOUND DECISION

A. Cowie: My question is to the Premier and comes under the category of peace in the valley. We see that blockades are being constructed in the Clayoquot Valley by pro-logging groups to prevent anti-logging groups from setting up blockades. It's called blockade equity, I guess. Was this the fair, balanced decision the government was so proud of?

Hon. D. Miller: I don't know at all how the question relates to the very fair and balanced decision that was made with respect to land use in Clayoquot Sound. The Share groups, according to the information we have received, are setting up not road blockades but what they describe as checkpoints. They are doing that, rightly or wrongly, because of the announced intention of some environmental groups to indeed blockade the roads on July 5. My office has been in touch with the RCMP. These issues are a matter for the RCMP to deal with, and they will do so.

A. Cowie: Supplemental question. I guess we may or may not be able to get the Premier in for another press conference in the Clayoquot. But is the Premier prepared to address the first of many Clayoquot demonstrations on the lawn of the Legislature on Canada Day, or will he try to avoid the occasion or send the Forests minister?

Hon. M. Harcourt: I will be enjoying Canada Day, as a number of you in this Legislature will be doing with your citizens. As a matter of fact, I'll be helping to swear in a number of new Canadian citizens on Canada Day.

SAFE-COMMUNITY STRATEGY

A. Warnke: My question is for the Attorney General. Richmond City Council tonight joins several other city councils in seeking a safe-community strategy to combat increased crime and antisocial behaviour. What steps are being taken by the Attorney General to develop a specific strategy to help cities and municipalities get tough on crime?

Hon. C. Gabelmann: I'm happy to answer the question. It really is an estimates-style question, because it will take me some days to get through the number of steps that are underway. I did share with members in estimates some parts of it. We're developing a variety of strategies as part of our new emphasis through the newly established community justice branch of the Ministry of Attorney General. I've frequently opened my office to municipalities with respect to particular strategies that they may wish to adopt, and I would be delighted to meet with members of the Richmond council to do the same.

A. Warnke: As a supplementary to the Attorney General, what is the message in terms of a potential report or some sort of commission to deal specifically with how this government is going to get tough on crime for, perhaps, Mayor Halsey-Brandt, Mayor Campbell and other mayors throughout British Columbia?

The Speaker: The Chair recognizes that the question is, again, very broad. If the Attorney General is going to comment, I would ask him to keep his comments as narrow and as brief as possible.

Hon. C. Gabelmann: One thing we don't need on this subject is another royal commission. There will not be one.

ABORIGINAL RIGHTS

J. Weisgerber: My question is to the Minister of Aboriginal Affairs. Last Friday's decision in the Delgam Uukw case was a foregone conclusion. It was virtually authored by this government. Does the minister understand that his government put the courts in an impossible situation to uphold the McEachern decision? The decision by the government to fire Russell and DuMoulin virtually undermined any chance of the Crown's case being upheld. Does the minister understand that this decision will result in substantially larger and more expensive settlements?

Hon. A. Petter: I understand that the decisions made by the Court of Appeal in this province are independent decisions made by the judiciary, and I

[ Page 7913 ]

would not for one minute suggest otherwise. And I am shocked that the member opposite would do so. Furthermore, I would remind the member opposite that this government ensured the arguments of the trial judge were presented to the court through an amicus curiae. The court had before it all of the arguments and reached its decision, as a court should, based on legal considerations.

J. Weisgerber: Supplemental question. Most aboriginal communities are far more interested in land than cash and settlements. Indeed, they want an economic land base. That's why they are called land claims. Does the Minister of Aboriginal Affairs have any idea what he really committed British Columbia to when he signed the memorandum of understanding last week with the feds? Will he acknowledge that this decision on Friday will undoubtedly result in a larger land and resource component to settlements?

Hon. A. Petter: I'd be happy to share with the member what we agreed to with the federal government in the cost-sharing agreement. We agreed to a sharing arrangement in which this province would pay between 10 and 25 percent of the cash and cash-equivalent component of treaty settlements. Included within that component is full credit to the province for the market value of urban lands, full credit to the province for market value of high-value forest lands and full credit to the province for the foregone resource revenues of all other lands.

That's an incredible arrangement, and as a result this province will share an estimated 17 percent of the cash and cash-equivalent component; of the actual cash, it's substantially less because of the tremendous credit this province is receiving for the contributions of land it will make.

The Speaker: Final supplemental, hon. member.

J. Weisgerber: The reality is that the MOU requires the province to pay between 10 and 25 percent of the cash costs; provide all of the land and resources, all of the lost revenue and resource revenue; provide 50 percent of third-party compensation costs; 40 percent of the itemized negotiating costs; the vast majority of extraordinary costs to communities and individuals affected by the settlements; and a good chunk of the self-government costs. How can the minister possibly stand up with a straight face and say that the province is only going to be required to pay 17 percent of the costs? That's an absolutely ridiculous statement by the minister.

Hon. A. Petter: I know that the member likes to engage in hyperbole, but the fact is that at least 75 percent of the costs covered by the agreement represent treaty settlement costs. Those are the guts of the agreement. Within those costs, the province has agreed to contribute between 10 and 25 percent of cash and cash equivalents. The member may choose to ignore the fact that cash equivalents include major land values.

I will go through them again: the full market value of urban land; the full market value of high-value forest land; and the value that the member in debate in estimates said was the most important value of all, the foregone resource revenue on all other land. That means that the province's share of cash and cash equivalents, which is estimated around 17 percent, will be substantially less in cash terms. That in turn means that for every dollar that this province will contribute, many more dollars will come into this province from Ontario, Quebec and the rest of this country.

ACTING MANAGER OF WOMEN'S EQUALITY GRANTS

W. Hurd: I have a question for the Premier. Can the Premier confirm that Agnes Ananichuk, the acting manager of Women's Equality grants, is the spouse of the Premier's deputy, George Ford?

Hon. M. Harcourt: The answer is yes. We'll have a chance very shortly for questions like that when my estimates come up. I'll be more than glad to answer them then.

The Speaker: Supplemental, hon. member.

W. Hurd: That's a curious response from the Premier, because he and his government had a lot more to say in 1987 when the wife of David Poole, then deputy to the Premier, got a summer job with the government. Perhaps I can remind the Premier that the current Minister of Finance stated: "It's simply a perception of the public that brings the whole system into disrepute when you see people closely connected to the government get these kind of jobs." What's the difference between David Poole in 1987 and George Ford in 1993?

Hon. M. Harcourt: One of the differences is that the person you are talking about has been employed by this government since 1989. He was hired by the former government, as a matter of fact. [Applause.]

Interjections.

The Speaker: Order, please. The Chair will wait for order.

PURCHASE OF VEHICLES FOR GOVERNMENT USE

K. Jones: My question is to the Premier. Among the nearly 1,000 vehicles required this year for the government, will the Premier commit to purchasing economical, primarily four-cylinder vehicles?

Hon. M. Harcourt: That is an important question and I will take it on notice for the Minister of Government Services, who deals with those purchasing issues. It is an important issue, and we will give a considered response.

[ Page 7914 ]

EXPROPRIATION COMPENSATION BOARD

C. Tanner: I have a question for the Attorney General. Two new members were recently appointed to the Expropriation Compensation Board. Mr. Clifford Watt, Q.C., who passed away earlier this year, was a member of that board and an authority on expropriation law. What is the expropriation experience of Mr. Shorthouse and Ms. Walls?

Hon. C. Gabelmann: Considerable, and I would be happy to share that considerable experience with the member. I can't bring that to the House right now; I don't have it on the tip of my tongue. There was a fair amount of consultation with various people in the sectors directly involved with expropriation matters. Those appointments were met with very positive reaction.

C. Tanner: Could the Attorney General tell us how many decisions were made last year by the Expropriation Compensation Board and how many cases are pending or waiting to be heard?

Hon. C. Gabelmann: I'll take that question on notice.

REVIEW OF BAMBERTON COMMUNITY PLAN

L. Fox: My question this afternoon goes out to the Minister of Municipal Affairs. Last Thursday when the public hearings resumed in Mill Bay on the Bamberton project, many of the opponents argued that the CRD should not approve such a project without a full review of the official community plan. Does the minister agree that any project of this nature should be subject to an updated official community plan?

Hon. R. Blencoe: The bylaw, information and proposal will be subject to extensive provincial review in terms of the statutory requirements when it comes to the province. That will occur. Indeed, I fully expect that other regional districts and communities who are expressing concern will have their opportunity to express those concerns in a forthright manner.

The Speaker: Supplemental, hon. member.

L. Fox: As the Bamberton project would create a virtual city of 15,000 people in a very concentrated site on the side of the Malahat, why has the minister rejected the CVRD's request to have a full economic review of those environmental concerns?

Hon. R. Blencoe: There has been no rejection of the CVRD's request. Indeed, the provincial government has granted dollars to the CVRD for a review of the planning requirements. I have indicated to them, and the information is available to you and to others, that the reviews will take place between third and fourth reading, hon. member. The information is available to you, as to others, publicly. You are aware of the way these processes go through. Your government and the former minister, Rita Johnston, actually laid out the process which this government is following.

Hon. M. Harcourt tabled the 1992-93 annual report of B.C. Trade.

Hon. C. Gabelmann tabled the annual report of the Law Reform Commission of British Columbia.

Hon. B. Barlee tabled the financial statements of the Okanagan Valley Tree Fruit Authority as of March 31, 1993.

[2:30]

G. Brewin: Hon. Speaker, I have the honour to present the first report of the Select Standing Committee on Justice, Constitutional Affairs and Intergovernmental Relations. I move that the report be taken as read and received.

Motion approved.

G. Brewin: I ask leave of the House to permit the moving of a motion to adopt the report.

Leave granted.

G. Brewin: At this time I would like to thank the members of the committee and members of the compensation advisory committee for the very important work they did in making the recommendations that I am tabling for the Legislature at this time.

I move that the report be adopted.

Motion approved.

Presenting Petitions

N. Lortie: I seek leave to table a petition from the Burns Bog Conservation Society asking the government to take some action.

With permission, could I read the petition to the House?

The Speaker: The prayer only, hon. member.

N. Lortie: "Therefore

be it resolved that we the undersigned" -- 5,000 signatures -- "British Columbia residents and others request that Burns Bog become an ecological reserve."

D. Mitchell: I also rise to present a petition signed by several hundred residents of forestry-based communities in British Columbia who are concerned about the interim management guidelines for the northern spotted owl and are asking the government to set aside these guidelines until more detailed socio-economic studies can be completed.

The Speaker: The Minister for Advanced Education, Training and Technology rises on a ministerial statement.

[ Page 7915 ]

Ministerial Statement

B.C. RESEARCH CORP.

Hon. T. Perry: Today B.C. Research Corp. is under new management. I ask that members of this assembly welcome the news that late last week the final papers confirming the purchase of B.C. Research by the Terracy consortium were exchanged. This is an example of a cooperative approach supporting B.C. Research -- a key element of our province's science and technology sector. Our government chose a cooperative approach that included the employees, the private sector, the University of British Columbia and government to assist B.C. Research through its recent fiscal difficulties. I am very pleased to say that the result of that approach is the purchase of B.C. Research by the Terracy consortium.

Terracy is an enthusiastic group which promotes research and development for B.C. firms who export to the international market. The three companies -- Terracy Inc., NORAM Engineering and Constructors Ltd. and Stothert Group Inc. -- bring their international experience to B.C. Research and will assure foreign investors that there is a fine research and development infrastructure available to them in our province.

To facilitate the successful negotiation of this purchase, our government supported the employees while they carried out the essential research work at B.C. Research during the trustee's evaluation of offers to purchase the company during the rather difficult period of the last several months. Today I would like to acknowledge the hard work, dedication and commitment of all of the parties who have worked to achieve this successful outcome: first, the employees of B.C.

Research, who provided invaluable input and advice on the restructuring of the organization; second, the University of British Columbia for making the appropriate arrangements for the continuation of B.C. Research operations on the campus; third, the Canadian Imperial Bank of Commerce for arranging the satisfactory financial arrangements, which allowed the various parties to come to terms; fourth, the trustee for ensuring the best interests of all parties were met, and for the trustee's patience and consideration of the difficulties incumbent upon all the parties; fifth, the staff in my ministry, particularly Ms.

Shawna Meade and Dr. Deborah George, the assistant deputy minister, who assisted in the development of options for B.C. Research and patiently paved the way for a successful conclusion at every step in a difficult process; and last but certainly not least, the Terracy group for recognizing the potential of B.C. Research and for believing that this province can provide the environment for research and development to prosper. Terracy is recognized as a leader in research, technology and product development, engineering and business management.

Under their management, B.C. Research is now in a sound position to make important contributions to our industrial and economic development provincewide, and the employees will continue to supply their considerable knowledge and expertise to applied research and development projects in British Columbia. This is a fitting next stage in a long, very fine tradition that was pioneered by the scientists and engineers of B.C. Research in the post-war period. I'm very pleased that the government has been able to help see it through to a successful conclusion.

J. Dalton: I would have to say that this is belated welcome news. All of the people involved in B.C. Research have certainly been very unsettled over the last few months by the lack of action of this government. So we can belatedly applaud the minister and the government for doing today what they should have done two or three months ago.

I had several frantic phone calls over the weekend when the financial difficulties of B.C. Research came to public light. Of course, the government, as we know, did nothing at that time other than to cause further concern and controversy over this issue. We on the opposition side are grateful to see that some action has finally been taken. We are certainly pleased that the research corporation will remain on the UBC campus, which is an excellent site and an ideal place for it. But this government can certainly be accused of a lack of planning and of the financial commitment that B.C. Research asked for in the first place.

I might add that it might be advisable for this government to give some thought to setting aside and providing 1 percent, for example, in each ministry's budget to be devoted to research projects so that this difficulty that B.C. Research went through would be avoided in future endeavours.

Again, we're happy with the news, and I know the people of B.C. Research will carry on the excellent work that they have done in the past.

J. Weisgerber: I'm delighted to learn that B.C. Research has been restructured and has found a way to continue to serve British Columbia. It certainly has made important and significant contributions over the years to research and development in a whole range of fields. It is an important undertaking in B.C. and makes an important contribution to the province.

The minister has glossed rather quickly over the fact that this whole crisis was brought on in the first place by the government's withholding of modest financial support for the organization. The government created the crisis that put B.C. Research in jeopardy, so it's somewhat ironic to hear the minister stand and talk about cooperation. Indeed, it is the exact opposite of cooperation. We must have a commitment, and government must make a commitment to research and development. Because a company is structured as a private corporation, albeit a non-profit one, is no justification for removing government support.

I think the government clearly missed the mark by failing to support B.C. Research when the difficulties arose.

While we're delighted that we will continue to have an important research and development facility in B.C. and at UBC, it is a tribute to the people working there, not, I think, any real tribute to this government, that a way has been found for that organization to continue to operate and contribute to the province.

[ Page 7916 ]

Orders of the Day

Hon. M. Sihota: I call Committee of Supply. Committee A will be meeting in the Douglas Fir Room to debate the estimates of the Ministry of Women's Equality.

The House in Committee of Supply B; E. Barnes in the chair.

ESTIMATES: OFFICE OF THE PREMIER AND EXECUTIVE COUNCIL OPERATIONS

On vote 7: office of the Premier and executive council operations, $4,237,000.

Hon. M. Harcourt: It's my pleasure to present the 1993-94 estimates for the office of the Premier and executive council operations and the B.C. Trade Development Corporation. Staff members responsible for the administration of these areas are my deputy minister, George Ford, as well as Lesley Wolfe-Milner, manager of finance and administration. To my right is Wilson Parasiuk, chair of the B.C. Trade Development Corporation, and Oksana Exell, president of the B.C. Trade Development Corporation.

I'd like to give you a short overview of the substantive changes that have occurred since last year to the budgets of both the office of the Premier and the B.C. Trade Development Corporation which impact on the estimates that I am presenting here today. Within the office of the Premier and executive council operations, two factors have affected this year's budget. First, five positions that support cabinet committees were transferred to the cabinet planning secretariat.

Second, eight personal service contract positions were converted to employee status, consistent with the recommendations of the Korbin commission. Overall, the estimates of the office of the Premier have increased 1 percent over the restated 1992-93 budget. Even with this slight increase, British Columbia still has the lowest level of all the provinces, per capita, in expenditures on the office of Premier and executive council operations.

[2:45]

I have supplied the Leader of the Opposition with some of these opening comments, to focus on the areas of change from last year's budget to this year's.

The B.C. Trade Development Corporation has assumed a number of responsibilities and related budget amounts transferred from the Ministry of Economic Development, Small Business and Trade. These include the administration of nine international offices, the cooperative overseas market development program and Airshow Canada. The corporation in turn transferred responsibility for the business information centre in Vancouver to the Ministry of Economic Development, Small Business and Trade.

After incorporating these transferred responsibilities and budgets, the B.C. Trade Development Corporation has only increased 1 percent in its estimate for 1993-94, and that is after a 14 percent cut in the 1992-93 budget from the previous fiscal year.

Over the coming year my office will continue to take a leadership role in establishing cooperative working relationships both at home and abroad that I believe will ultimately improve both the way we do business and our standing in the global economy. With that, I'd be more than pleased to answer questions that members of the Legislature have about the estimates for these three areas.

F. Gingell: If I could sing -- and I can't, as members of this House who were at the media party are well aware -- I would start this off with a rendition of "Is This All There Is?" The Premier's office, in the office alone, spends some $4 million. It is without question the most important role in our government. It is the position of leadership, and I must admit I expected a much longer and greater dissertation on the Premier's estimates.

I know that the Premier is a very busy man, and I guess that's the reason these opening remarks were so sparse. I know he's busy because, as I understand from a review of the staffing in his office, there are five people involved in his scheduling, as well as a principal secretary, an executive secretary, an executive assistant and a press secretary. Perhaps the Premier would be willing to discuss the question of staffing -- the number of people and the number of dollars -- that are committed to just his scheduling process.

Hon. M. Harcourt: Five people are involved in the scheduling branch. This includes two people who staff the switchboards receiving the very substantial number of calls that come into the Premier's office as a first point of communication with the government. These calls are then directed to the appropriate minister or staff person who can deal with a citizen's request or suggestions offered to the government. There is a scheduling director, who has substantially expanded responsibilities from those of the person who headed up the scheduling office before.

Two other staff people work with the scheduling director not just to deal with requests for the Premier to attend the many hundreds, if not thousands, of functions that take place in this province but also to coordinate travel and other commitments of the cabinet ministers with the activities of the Premier. Those are the five people. One person oversees the office; a second person deals with the logistics and advance work for specific events; a third person deals on a day-to-day basis with my

schedule and with scheduling requests; and the two other staff members deal with the many phone calls that come into the Premier's office.

F. Gingell: In his response, I note that the Premier stated that the scheduling director's responsibilities and volume of work have increased substantially from those of the previous administration. I wonder if you could elaborate on that. Why, all of a sudden, would there be a greater need for scheduling? Why would there be more work than there was in the previous administration?

[ Page 7917 ]

Hon. M. Harcourt: First of all, last year there were 2,800 requests for the Premier's attendance at various functions and meetings. To deal with those requests, to coordinate travel and activities of the ministers and to make sure that the availability of the Premier and the ministers is dealt with in a businesslike way -- so that we ensure the maximum number of possible meetings with the public -- takes that level of staffing. That is no different from previous years. In some cases, previous administrations have had more staff than are presently in the Premier's office.

So this is not an unusual number of people to handle not just the 2,800 requests for the Premier's appearance but, as I said, the many phone calls beyond the requests to appear at meetings or celebrations in this province.

F. Gingell: I guess I misheard you. I thought you said that the number of requests is much greater now and the scheduling director has a greater workload. Evidently it is the same as it was in the previous administration.

When the Premier was first appointed, he appointed someone to a new position called outreach director. Could you let us know exactly how that job is defined?

Hon. M. Harcourt: The outreach department acts as the liaison for the office of Premier to ensure that communication and information-sharing among the Premier's office, cabinet ministers' offices, and government caucus and constituency offices are done in conjunction with our central activities -- through the policy coordination office, the government communications office, and caucus communications and research departments.

On top of that primary role, the outreach department is responsible for coordinating regular ministers' staff meetings; briefing various ministries' staff on issues, communications initiatives, the legislative agenda and various government initiatives; and arranging for appropriate resource people to brief the ministerial assistants and the executive assistants.

The outreach department is also responsible for and acts as the Premier's office designate in recruitment of ministers' staff as vacancies arise, and is involved in the interview and selection process. Further, the department has identified training needs for the staff, who are there to serve the public in the various ministers' offices. The outreach department has a number of very important functions to make sure that all staff members have the required information when citizens phone in, on either their minister's prime responsibilities or some of the cross-government responsibilities.

F. Gingell: As I understand it, the outreach department has a staff of 14 individuals -- which includes responding to your mail. Can you tell us whether that number is greater or fewer than previous years, or as compared to the previous administration?

Hon. M. Harcourt: The staff of the outreach department is three. It's the same number as last year. The correspondence branch has 15 FTEs, who are responsible for handling the many thousands of pieces of correspondence they receive every month.

F. Gingell: I do appreciate that you get a lot of correspondence, because I get copied on 99 percent of them, or so it would seem. Can you please advise what kinds of targets your correspondence group have for responding to letters? What is the turnaround time you are actually accomplishing and the turnaround time you would like to get it to?

Hon. M. Harcourt: I'm sure the Leader of the Opposition will agree that it depends on the type of correspondence we receive -- whether it's a petition, a form letter, a mail-in token that people have been asked to send on a particular issue, or a citizen asking for help on a specific complaint or problem, whether it's with a landlord and tenant matter or involves a woodlot. If it's an individual item like that, it's different than a major letter involving four or five areas of concern about a large land use decision like Clayoquot or Tatshenshini. So it depends on the nature of the correspondence.

The office received 120,990 pieces of correspondence last year. So you can see that we are talking about 10,000 a month that are dealt with by the correspondence unit. Petitions are received and certainly considered by the government. If it is a standard form letter, then the interest shown by citizens is noted, as is probably done in the office of the Leader of the Opposition. But in most cases a form letter or mail-in token is not responded to.

A letter that involves an individual minister is sent very quickly to that minister's office for a response, and it is acknowledged in a return letter to the individual citizen. A letter that has significant complexity to it and requires research is, again, acknowledged as quickly as possible and then researched further; we would get back in touch with the citizen when we had received the detailed information.

[3:00]

So it really depends on the nature of the reply. Now that we're moving into our second year, we're trying to improve the quality of the response time. Sometimes a letter is not responded to as quickly as I would like to see, and we're attempting to address that by improving the performance of the correspondence branch, as I'm sure the hon. Leader of the Opposition is trying to do with the many c.c.ed copies that he receives of correspondence to our office. It would be difficult to give you a specific turnaround time, as it depends on the nature of the correspondence that we receive.

F. Gingell: Could the Premier please advise me of the budgeted cost for his correspondence department for this current year, including all of the add-on costs -- office space, mailing costs, etc. -- and how that compares to the 1992-93 year?

Hon. M. Harcourt: The 1993-94 estimate for the correspondence branch is $589,399, and last year it was $580,497. There's an increase of $8,902 this year over last year.

F. Gingell: Could the Premier advise us whether he has hired any summer students for this current year or is planning on hiring any summer students?

[ Page 7918 ]

Hon. M. Harcourt: No, we don't have any plans this year.

F. Gingell: Have you hired any summer students in past years? Did you have any last summer?

Hon. M. Harcourt: I think one student on a co-op program worked in the correspondence branch last year.

F. Gingell: Perhaps we could turn briefly to the issue of the constitution. I would presume that all of the costs incurred in 1992-93 by the provincial government on the constitutional and referendum question were, in fact, paid through the Premier's office. Could he confirm that that is true?

Hon. M. Harcourt: The costs of the referendum were paid through Elections B.C. and the Attorney General's ministry.

F. Gingell: So none of the costs for the material mailed out or for travel to various meetings throughout the province and back east were paid through the Premier's vote?

Hon. M. Harcourt: Constitutional travel expenses for the pre-referendum activities were covered through the office of the Premier and the executive council, in the amount of $182,234. The vast majority of that involved our staff who are part of the intergovernmental relations branch -- people like Jack MacDonald, Peter Heap, Vick Farley, Claudia Herbert and Patrick O'Rourke -- and were the key advisers to myself and the Minister Responsible for Constitutional Affairs.

For the 1992-93 fiscal year, that amount was $182,234.47, and it covered many months of very intense meetings when the ministers were meeting across the country in April, May, June, July and August and the meetings of the first ministers in July and into August.

F. Gingell: The $182,000 covered travel and hotel costs but not the cost of the staff; they were on the staff of the Minister Responsible for Constitutional Affairs?

Hon. M. Harcourt: The $182,234.47 that I just read out was part of the Premier's estimates.

F. Gingell: I wrote down the sum of $182,000. But you named off a series of about six staff members. Clearly the $182,000 doesn't cover one year's salary for the six staff members. On top of that, there were travel costs, office costs and pre-referendum costs for the quite expensive pieces of literature that were sent out to the citizens of British Columbia selling, I think, the particular position this government had on it. I want to find out what's in that $182,000 and what costs are under other government departments.

The reason I am interested in this is purely and simply that a cost was incurred in 1992-93 that you won't be incurring in '93-94. So when we look at your budget for this year, we have to recognize that there's a chunk of last year's budget that won't be spent.

Hon. M. Harcourt: The amount I've just outlined is the expenditure for staff in the inter-governmental relations branch of the Premier's office, who are our most experienced staff in terms of federal-provincial relations. The constitutional issue is a significant issue, but it's not the major part of the activities of these staff, which is to deal with the whole complex array of relationships between the federal and provincial governments, including arranging to get together with the new Prime Minister prior to her going to Tokyo for the G-7 meetings.

There are a series of other very specific activities that they are undertaking on behalf of British Columbians to make sure that they are treated far more fairly by Ottawa than they have been in the past. They are working very closely with Lorne Seitz, who is the director of B.C. House in Ottawa. This amount just covers the travel expenses for those particular staff who work in the intergovernmental relations branch.

The other costs that you've talked about are contained in the other estimates, whether it be the Attorney General, Elections B.C. or the government communications office, which is in the Government Services estimates.

F. Gingell: I take it that this intergovernmental relations group within your office is a clearly defined group. Could you give me a quick rough breakdown of the costs of that group?

Hon. M. Harcourt: I can, and while I'm getting that information I can say that your point on the travel is one that is well taken. That's why the travel costs for staff and others in my office in this year's estimates have been reduced 28 percent from last year. There won't be as extensive a travel requirement as we had last year due to the constitutional negotiations and discussions.

The costs of the intergovernmental relations branch, which has 15 people -- and as I described, some of those people have been brought from contract to be employees, following the very strong recommendations from the Korbin commission -- was $1,264,248 for the 1992-93 budget. This year the budget is $1,161,312, which is a reduction of about 8 percent, or $102,936.

F. Gingell: So the $182,234 that you identified earlier is simply part of the $1,264,248, and not in addition to? That's correct? Thank you. The Premier mentioned that a certain number of individuals who were on contract before have now been moved onto full time. Can you advise me on the number of individuals that were moved, and whether the change in the employment arrangement increased or decreased the cost to the government of those individuals?

Hon. M. Harcourt: As I stated in my opening remarks, eight contractors in the fiscal year '92-93 were offered and accepted public service positions. This was consistent with the overall review of service contracts under the auspices of the Korbin commission. The

[ Page 7919 ]

increase is approximately $43,000 in fiscal year 1992-93 for the Premier's office budget.

F. Gingell: Is the $43,000 cost increase the result of wage increases for the individuals who are involved, or is it a result of them committing more time in going from a part-time arrangement to a full-time arrangement?

Hon. M. Harcourt: These positions were assessed and a classification was given to each. Some were classified downward and some were classified upward. The net result was a $43,000 increase, bringing the independent contractors into the public service.

F. Gingell: I'm not sure that told me what I wanted to find out. Coming from that response, in the instances where the determination of the classification of the position was one that was a lower-paying position than the amount that was in the contract, were they red-circled and paid at the old amounts or were they paid the higher amount related to the classification?

[3:15]

Hon. M. Harcourt: In some cases the total amount for that position was actually reduced; some were increased, depending on how they were classified.

F. Gingell: Just to finish this off and to make sure I've got the picture right, some of those individuals had their pay reduced.

Hon. M. Harcourt: Yes.

F. Gingell: With respect to the contract positions which were previously in existence, were they all converted to full-time jobs, or are there any contracts still employing individuals?

Hon. M. Harcourt: There are no full-time service contractors. A lot of these were shuffled around from various ministries and seconded over to the intergovernmental relations branch, and they were working full-time for a number of years in intergovernmental relations. As I said earlier -- given the very strong recommendations of the Korbin commission -- people who are working full-time and carrying out functions that fit within the public service should be brought into the public service. There are no full-time service contract people working in the intergovernmental relations branch.

F. Gingell: The question not only included the intergovernmental relations branch, but all of the Premier's office.

Hon. M. Harcourt: There are no full-time service contractors in the Premier's office.

F. Gingell: How many part-time people are on contract?

Hon. M. Harcourt: There are none at the moment.

F. Gingell: Recognizing that particularly with a subject like intergovernmental relations, which can deal with such a wide variety of subjects and requires a wide variety of skills, isn't it sometimes necessary to hire someone with specific expertise when it's a relatively short-term assignment? Is the Korbin commission recommendation on converting contracts to FTEs a hindrance in being able to get the right kind of people for specialty work?

Hon. M. Harcourt: Short-term contractors were hired during the constitutional negotiations. At the present time, we need full-time people to deal with -- if there is such a thing -- normal times in federal-provincial relations and to deal with hundreds of complex contracts, understandings and jurisdictions. You really need people with a knowledge of not just the constitutional, fiscal and other arrangements between the federal and provincial government but people who know those who are involved. Those personal relationships are as important as knowledge of the substance of the constitution or special areas that we're involved in as a government.

Our feeling was that these people were working full-time. They had been working full-time very effectively for the people of British Columbia. They are able, as a team, to put a great deal of emphasis on B.C.'s agenda in Ottawa, in terms of the post-referendum, post-constitution world that we're in. For example, they are finalizing the Aboriginal Affairs ministry's Treaty Commission arrangements on cost-sharing of treaty negotiations, third-party negotiations and some of the ongoing negotiations with the federal government.

They are working with the federal Finance ministry and our Finance ministry to change the fiscal arrangements so we don't have more federal debt dumped onto our taxpayers. Those are some examples of the ongoing need that this government has in representing the people of British Columbia well in federal-provincial relations.

F. Gingell: Yes, I appreciate that it is an important role and responsibility.

When we are discussing a group of employees classified as "contract," does that, in your mind, include people whom we might describe as consultants?

Hon. M. Harcourt: No, it doesn't. As a matter of fact, the issue of when to use special expertise, or when you have peaks of work and need to supplement the skills of your full-time staff, is a good question. Quite frankly, the government is very pragmatic about it; there may be a need to use outside contractors or people with specialized skills.

The test is a very simple, straightforward one. The previous government was illegally contracting a number of employees classified as consultants or as service contractors. Up to 2,000 people were working with the provincial government against the provisions of the Income Tax Act and the Unemployment

[ Page 7920 ]

Insurance Act. So the test was whether there was a legal employee-employer relationship under the Income Tax Act and the Unemployment Insurance Act. That was the basis for the decision to bring the eight, and others, into the public employment.

F. Gingell: Could the Premier please advise us of the amount spent on consultants in 1992-93, and what you're budgeted for in 1993-94?

Hon. M. Harcourt: There has been no money budgeted for contracts for this year.

F. Gingell: Can you tell me, Mr. Premier, how much money was spent on consultants last year?

Hon. M. Harcourt: It was the amount for those eight contractors minus $43,000. I'll try to get the exact amount for you. The fees were $466,625 in the 1992-93 actual expenditure for contractors.

F. Gingell: Am I hearing you say that in 1992-93 we spent $466,625 on consultants, rather than individual contractors, and we don't intend to spend any money in that area in '93-94?

Hon. M. Harcourt: As I explained earlier, that was for the eight people brought into the Premier's office. Other than that amount, there were no other funds expended for contractors; it was just those eight people who had their status changed.

F. Gingell: The reason this is becoming a rather painful exercise is our

interpretation of the words "consultants" and "contractors." I was asking about the amount of money.... I was satisfied as you told me that the contractors had all been put onto FTEs. You have no part-time contractors. You don't intend to bring any people in on a part-time basis to do specialty work. But you have spent money on consultants last year. You spent a bunch of money on an image consultant. We discussed that issue in the House. I forget whether the amount of money was $12,000 or $18,000, but an amount in excess of $10,000 was spent on an image consultant.

Hon. M. Harcourt: No, there wasn't.

F. Gingell: I am confused. It was a subject of some debate in this House. But I can come back to it later on, if I need to.

On many occasions, we have tried to get the total expenditure by the British Columbia government on the Yes campaign. We have talked about this $182,000. But it sounds to me that that was much more involved with B.C.'s negotiations and not with the campaign to go to the people of British Columbia and sell the government's negotiated position. I appreciate that some of it may be in your office and some may be in the office of the Minister of Labour, but it is sometimes very difficult for us to get all of these numbers. Do you have a complete number for the spending by the provincial government on the Yes campaign?

Hon. M. Harcourt: All I can provide you with is what was spent within the Premier's estimates, and I came prepared to deal with the budgeted amount for this year in my estimates. In my earlier remarks I outlined one of the changes: the eight full-time contractors were changed to full-time employees, and there were no other private contractors used last year nor this year. That is the amount that is within the Premier's estimates. I am quite prepared today to answer any questions on those Premier's estimates.

[3:30]

F. Gingell: The costs I was talking about were the Yes campaign costs. There was a glossy brochure, the mailing of that brochure and the cost of people to prepare that brochure. The costs that we have discussed, as I understand it, were the costs that your office incurred in representing the interests of British Columbians in negotiating with the federal government and with the other provinces. The $182,000 was an allocation of salaries and travel for the intergovernmental relations branch within your ministry. Then, as I understand it, there were other costs for that same thing that were probably in the Ministry of Labour vote.

But leaving aside the issue of the province negotiating with the other provinces and the federal government, the cost that I was trying to find out about -- because it's not going to be incurred this year.... When one considers how much your office is going to spend, it's important to know what you spent last year and what you did last year that you won't need to do this year. There was the cost of the campaign to the people of British Columbia encouraging them to vote in a certain manner.

There were large brochures produced that gave details of the Charlottetown accord, and there was a series of other brochures that interpreted those arrangements in the eyes of British Columbians in terms of their consequences for B.C. I don't have any problem with that; I just want to find out what the total cost of that campaign was.

Hon. M. Harcourt: None of the Yes campaign costs were paid for from the Premier's office estimates. Some of those costs were under the Minister of Labour, as I pointed out earlier, and some were under the government communications office of Government Services, but none of the Yes campaign expenses were paid for out of the Premier's estimates.

F. Gingell: Accepting then that I can't look at those costs as costs that would have been in your budget last year, but just as a matter of interest -- and I am sure that all members of the House are interested in the cost that was borne by the other ministries -- can you as the Premier advise us how much that was?

Hon. M. Harcourt: I can't. I assumed that those questions could or would have been asked in the estimates of the Minister of Labour, the Attorney General and the minister responsible for government management services. As I said, the amounts I can give you clear information about are those contained in my estimates. I have pointed out the conversion of the eight

[ Page 7921 ]

people. I've said that because of the less onerous travel requirements from the constitutional negotiations, the cost of travel for the Premier's office has been reduced 28 percent this year.

F. Gingell: Foiled again. We tend to chase this around. It seemed to me that the Premier -- the man who's in charge -- would be in a position to advise us of that cost. I think the people of British Columbia are disappointed. The money is spent, the issue is over, the government did what it believed to be right, and I don't question that in any way. But I think the people of British Columbia would like to know what that number is.

I'm sure there are all kinds of questions on the order paper and questions that have been taken on notice, so perhaps the only opportunity I have at this point is to encourage the Premier so that this number could come out and we could get it dealt with and get it behind us. I would encourage the Premier to follow through on that.

Just coming back to the eight people who were on contract and have been converted to FTEs, can you advise me whether these contractors were hired originally under contract by your government or by the previous administration?

Hon. M. Harcourt: Five of the eight had been hired by the previous government and three by this government.

F. Gingell: Just while we're dealing with these conversions and the very strong recommendations that came from the Korbin commission, I will say that as an accountant I'm all in agreement with processes that create better accountability and a better count. We've had the first preliminary report from the Korbin commission, and we understand certain parts of it have gone to cabinet. Can you advise us, Mr. Premier, if the government is going to issue the Korbin report in one piece, or is it going to come out in dribs and drabs? Are those parts of it that are ready going to be tabled in the House within a very reasonable and short time period?

Hon. M. Harcourt: The first report on the public service will be tabled shortly, and the other report on the public sector will be tabled in the immediate future. So these reports will be coming out separately: one quite quickly, and the other in the near future.

F. Gingell: Just one last question. Which is a shorter time span: shortly, or in the immediate future?

Hon. M. Harcourt: Shortly is more immediate than in the immediate future.

K. Jones: In view of the fact that the Korbin commission has not been tabled before the House, why is the Premier using recommendations from the commission in his responses in the estimates? What type of procedure is this?

Hon. M. Harcourt: We had an interim report in December which very clearly pointed out that a number of people who had been removed, forcibly or otherwise, from the public employ were employees in all of the sense of that, particularly in regard to the federal Income Tax Act and the Unemployment Insurance Act, and that the government had been acting illegally in treating those people as independent contractors. I know that the Leader of the Opposition, as an accountant, is interested in these matters -- I am certainly interested in them as a lawyer -- and is concerned that we do not act illegally as an employer.

That is why we have tried to bring the practices of British Columbia in line with the laws of this land.

K. Jones: The Premier is trying to say that an interim report is the actual recommendations of the Korbin commission. Interim reports aren't intended to be the final recommendations; they could vary, certainly, from that. But the Premier was actually stating that he was making this based on the recommendations of the Korbin commission. That would indicate that the Premier is jumping the gun on the announcement to the Legislature of the full recommendations of the Korbin commission and is therefore giving out a portion of the Korbin commission in his estimates today.

Is he going to give out more of it later in the estimates if we ask the right question? Are we going to hear some other portion of it from some other minister? Is the whole Korbin commission report -- which the Minister of Finance promised to table within two weeks; the two weeks came due last Thursday -- going to be tabled in this House right now, today, instead of holding off?

Let's get this up front. Who can be believed? Two weeks ago last Friday the Minister of Finance said that he would table the report in this House. The report has still not been tabled. I requested it on Friday in his office, and it has still not come forth. When is it going to be tabled? The hon. Minister of Finance is a truthful person, and I believed he was true to his word that he would bring it forward. I would like to see it here today. If you are going to be referring to it and saying that you are implementing the recommendations, then surely to goodness we should have the whole report before us, not just dribs and drabs.

Hon. M. Harcourt: There are two or three questions and points. First of all, within the first month of the Korbin commission being established, Ms. Korbin dealt with the 2,000 positions, which I described, that were employer-employee positions and clearly within the

definitions of the Income Tax Act and the Unemployment Insurance Act. Over the last year, those employees were brought into the public sector to bring us in conformance with the laws of Canada. That's one of the first tasks Judi Korbin and her commission were asked to deal with, and they have done that. Secondly, the Minister of Finance has said that the Korbin report will be coming forth shortly. I understand your impatience and eagerness to see that report. As I've said here in the House, volume 1 dealing with the public service will be available shortly.

[ Page 7922 ]

F. Gingell: Seeing that officials of the B.C. Trade Development Corporation are here, perhaps we should deal with some of those issues so that we can get them dealt with today. If your estimates go over more than one day, it will save them coming back. I'm very glad that this document was tabled today. When the reports are filed it is a great help to us in dealing with these issues and saves us a lot of time. I would have encouraged you to give me a copy before, but I've had a very short time to look at this, and therefore I hope I don't waste your time by asking questions that don't need to be asked.

[3:45]

In 1992 this government set up an amount of $400,000 to establish a program to market the services and expertise of Crown corporations and provincial ministries. Subsequent costs incurred were only $150,000, and you have returned the remaining $250,000 to surplus. Can you tell us briefly what went wrong with the original plan and why the money that had originally been set on one side to follow through on this important function wasn't used for that purpose?

Hon. M. Harcourt: I think we're all aware that as a government we take deficit reduction as a very serious goal. Over the fiscal year 1992-93 we were committed to trimming the deficit, given the large size of the deficit that we found after the Peat Marwick review. As a matter of fact, we trimmed $316 million from ministerial estimates last October-November. The federal government felt that it was doing a massive cutback when it chopped $400 million out of the federal budget during that same period, which was the equivalent of B.C. cutting about $3 billion if we had done the same as the federal government.

We took some very substantial measures to reduce the deficit, to cut back on ministerial estimates, and this was one of those areas. We cut $250,000 out of the $400,000 that was set aside so that we could pay down the deficit figures. However, the $150,000 was utilized because the government feels that British Columbians do a number of services extremely well in our Crown corporations, various authorities and agencies, working very closely with the private sector. That position was also taken by the B.C. financial review conducted in February 1992.

Peat Marwick and Deloitte Haskins noted that certain branches of government produced goods and services that have an economic value in the marketplace, and that we have a competitive advantage in a number of those areas: health care, education, assessment authorities, B.C. Hydro and others.

As a result of working with the Crown corporations during the last year, from the $150,000 that was remaining we were able to put $75,000 along with other funds to fund the International Geomatics Services Corp., which is a joint-venture company established by B.C. Trade and 23 private sector companies representing the B.C. digital mapping and geographic information systems industry. The corporation combines the expertise and experience of the private sector with essential expertise developed by the Ministry of Environment, Lands and Parks. B.C.

Trade contributed seed capital and the Trade Corporation's experience in international marketing, finance and trade intelligence. To date, the marketing efforts of that initiative have resulted in proposals that are submitted for projects in Iran and Bolivia.

The remaining $75,000 will be used for other government marketing opportunities as they develop. Examples of opportunities presently being pursued by B.C. Trade include the marketing of the business information centre concept to Trinidad and Tobago, the formation of a fire protection alliance in conjunction with the Ministry of Forests, as well as a project to market land registry systems in some of the former Soviet republics, where it's pretty hard to introduce a market system and private property if you can't identify the property. You can't assess it, and you can't apply a property tax to it.

If you don't have the hardware or software to be able to establish land title, it is very difficult for companies to go in and feel that they can put paper against it, mortgage it, describe it and have some security.

So those are some of the areas, as well as the very successful efforts of B.C. Hydro International in a large number of countries to market Crown corporation services.

F. Gingell: Just to go back over this. The original appropriation was $400,000 to market the services and expertise of Crown corporations. In the year ending March 31, 1993, you only spent $15,000. There's $135,000 that is still available for expenditures in this current year, one presumes. So this $75,000 that you spoke about for International Geomatics.... If the $75,000 was expended in the year ending 1993, it wasn't charged to this program; it was charged somewhere else. Can you advise me on where that's charged, or if the expenditure is later than March 31, 1993?

Hon. M. Harcourt: That money is currently being expended; in other words, it was part of that project.

F. Gingell: I know it's not very much, but what program in the 1993 fiscal year was that $15,000 spent on?

Hon. M. Harcourt: That was spent on the development work needed to get the project up and launched. That was the pre-proposal work.

F. Gingell: I take it this is the only one that has actually moved along to a state where you're now in the process of marketing it. Perhaps you could confirm that. Perhaps also you could advise us if the B.C. Trade Development Corporation anticipates any return from this investment in this current year. What kind of returns might you anticipate in future years, if any contracts have been signed?

Hon. M. Harcourt: We're involved with 23 private sector companies that have put forward proposals in Iran and Bolivia. I can't give you the exact details of those proposals because that's all they are right now. We have been encouraged by the response of

[ Page 7923 ]

the private sector companies. I will be able to furnish you with that information when the proposals are accepted, and we can then see the true extent of those two particular proposals that we're working on in those two countries. With regard to the other projects, they too are advancing.

As I outlined earlier, I understand that the business information centre with Trinidad and Tobago has been purchased and that a contract has been entered into to supply this particular service. Another very exciting area, where B.C. is the best in the world, is fire suppression and fire protection. We have brought an alliance together to market that skill. We're doing that in conjunction with the Ministry of Forests. I think there have been questions about that in the past.

I also described some of the work going forward in some of the former Soviet republics, and I described the reasons why I think it's fundamentally important. In my opinion, B.C. happens to be among the best in the world with our Torrens land registry system and the computerization of public records that people can get with the payment of a small fee. The B.C. Assessment Authority, a market-based assessment authority, is again among the most accurate and best in the world. So is the ability that our municipalities have with respect to the system for tax notices and collections.

If you add to that the hardware and software that B.C. Systems Corporation has, it's a very substantial asset that the people of B.C. have. The ability to take that whole concept to a modernizing country like Russia, or to some of the other former republics of the Soviet Union, is a very useful activity. We're not going there to sell a particular kind of software. As a matter of fact, that's the advantage: we're going there to help these countries modernize with something we've perfected here in B.C.

F. Gingell: When this concept was originally developed, there must have been some thoughts in the business plan for it about future revenue streams. What kinds of revenue streams do you think are reasonable from just this first one, International Geomatics, which we've been spending $75,000 on? Do you anticipate some return to this corporation in the current year and perhaps next year? Will it be in the region of recovering the investment? Can you advise what the anticipated returns are?

Hon. M. Harcourt: That's a good question, as to what a trade development corporation should expect to be able to recover in fees, in appraising loan guarantees and in providing services. We've done a study of other trade development corporations in the world, and the best at recovering costs is Hong Kong, which recovers 57 percent of its operating costs. That's with the Hong Kong government giving the trade development corporation the trade and conference centre and the revenues from that. Most export promotions, or trade development corporations, recover between 10 and 15 percent of their total budget from fees and revenue sources like that.

Money invested by the people of British Columbia in working with 23 private sector companies to form a consortium to go into a country with one united presence will bring tremendous benefits, not directly back to the Trade Development Corporation but to the B.C. economy, by those companies getting the contracts and having people employed here in British Columbia providing those services and, in some cases, providing the equipment, which could be manufactured here in British Columbia.

If you're asking about the payback on export promotion in the broader sense, Crown corporations or agencies usually target about 10 to 15 percent of their total budget revenues from fees and other mature sources of revenue.

F. Gingell: I'm afraid we've focused on the wrong question. The issue I'm dealing with is specifically what you call the special program to market the services and expertise of Crown corporations and provincial ministries. I'm not talking about the corporation market development loan fund to assist British Columbia companies to develop export markets; I'm talking about the program to sell the services and expertise of ministries and Crown corporations. With all the investment we've had in the Crown corporations and ministries developing this expertise and the programs, I would presume that we do in fact have something to sell.

[4:00]

As I understand it in this particular case, this program has taken a program and expertise developed in one of the ministries -- I presume the Ministry of Environment -- and packaged it for private enterprise corporations to sell. Surely that will return revenues to the province in excess of the cost of packaging and selling it, because the real cost was incurred in years past when the programs were being developed for use in British Columbia and in government ministries.

Hon. M. Harcourt: The advantage of the approach we're taking is that we're working in partnership with the private sector, not with just a company but with a consortium of the best and brightest companies in British Columbia, to go into a market with one presentation. For example, with the project we're talking about, the International Geomatics Services Corp. proposals have been submitted -- and we hope to hear back soon -- for projects in Iran worth $2 million and projects in Bolivia worth somewhere between $600,000 and $900,000.

If those contracts succeed, that consortium then has the ability to go into other countries with a proven track record in those two countries. We will have performed a very useful service of launching them, of giving them an opportunity to get started and of having some success with these initial contracts. As a corporation, B.C. Trade has the ability to help people with international market intelligence, to put these groups of B.C. companies together where there is a market opportunity, to help open the doors for them, and to hopefully have them successfully sign contracts after the proposals are accepted.

Then to be able to see them spread their wings and go into other areas of the world is worth the seed money that we put

[ Page 7924 ]

in to get those contracts, which will then bring money back into the B.C. economy.

F. Gingell: I take it that the International Geomatics package of expertise and skills comes from government ministries and from nowhere else; that this is part of the program to market the services and expertise of Crown corporations and provincial ministries.

Hon. M. Harcourt: This partnership brings the synergy of an expertise that has been developed in the public and private sectors. In other words, a number of companies in British Columbia are world leaders in this area. We also have expertise in the Ministry of Environment, Lands and Parks, through the experiences that they have had over the last many years. We can take that experience, combine it with private sector skills and experience -- some of which they developed here in British Columbia working with that ministry -- and now export it to those other countries.

F. Gingell: I'm sorry this is taking so long. The expenditure that we have been discussing is made under special programs appropriations. If you turn to page 18 of the notes to the current financial statements, note 7(

b) describes the special programs. That's what I thought we had been discussing.

Hon. M. Harcourt: In the last fiscal year, $15,000 was utilized to do the development work for these proposals. The other $135,000 will now be utilized to carry forward the remainder of the proposal to the contract stage and, hopefully, to launch the contracts in Iran and Bolivia. I think the other $75,000 will be utilized with the mixing and matching that we are getting in being able to use scarce public dollars to trigger other funds from the private sector and from the federal government, with the partnerships we are working out with them. We are also working on export enhancement to trigger contracts that are many more times the modest seed money that B.C. Trade can put in.

The other reason it's important to put in these modest amounts of money is that a lot of these countries' governments want to see that the government of the day in British Columbia has confidence in the participating private sector companies. That confidence is showing up and saying we support these companies; they have a track record here in British Columbia, and it opens doors. Going in with that kind of Good Housekeeping seal of approval of the government makes the process for these companies a lot less tortuous. So we have been able to take that $150,000 and lever a tremendous amount of private sector investment, which we hope will then bring those contracts back into British Columbia.

F. Gingell: Was the decision to reduce the original appropriation from $400,000 to $150,000 part of the decision that I seem to hear you now saying -- that you're going to bring in private enterprise partners in this program -- or was it always contemplated that private enterprise or private corporations would have a role in this marketing of expertise and skills developed by Crown corporations and the ministries?

Hon. M. Harcourt: I think there were two processes. One was the cut to budgets that we undertook during the last fiscal year to pay down the deficit, and that process did take place. Of course, the Leader of the Opposition is aware that we changed the Trade Development Corporation's activities because we found a more effective way for our smaller, and in some cases medium-sized, businesses to work. It was not to work individually but together in consortia, in joint ventures, and it was to work in a partnership with the B.C. Trade Development Corporation.

What we can do best is trade intelligence, help to open doors, cut down the costs by putting together groups, cut down the travel costs, accommodation and hosting costs. Then we have the private sector do what they do best, which is to provide the expertise in the goods and services they can provide. In some cases we combine Crown corporations' goods and services with private sector goods and services.

So during the year, as the Trade Corporation was tightened up, its budget was reduced 14 percent. We found better and smarter ways of doing business. We started to move towards taking the engineering consulting businesses in British Columbia and having them work together, for example, in Vietnam, with the backing of B.C. Trade and with links into the Asian Development Bank. We are having some success now in working with the Vietnamese government on the tremendous backlog of infrastructure needs that they have in modernizing their economy.

F. Gingell: The reduction of $250,000 and its return to the equity of the B.C. Trade Development Corporation doesn't do anything for the budget reduction. It has nothing to do with the budget reduction. It's purely and simply a movement of an appropriation back to surplus within the financial statements. The only thing that would have anything to do with a budget reduction, as I understand the financial accounting system of the province, would be a reduction in the amount of the grant from the provincial government to B.C. Trade. It would only be this that would be considered a reduction in expenditures.

Was the grant to B.C. Trade Development Corporation reduced by the $250,000 or any other amount? Can you advise us how the grant changed in the past year?

Hon. M. Harcourt: That $250,000 was returned to the provincial treasury, so the budget was reduced.... B.C. Trade was reduced by $250,000. It was returned to unappropriated equity and then returned to the provincial treasury.

F. Gingell: Okay. As the Premier says, I will take the question on notice. I'm going to have to think about that for a moment.

In addition, there was established in 1991 -- I would presume that would be prior to the change in administration, because these are March 31 year-ends.... An amount was appropriated for the purpose of the market

[ Page 7925 ]

development loan fund to assist B.C. companies engaged in developing projects for export markets. That fund, in the amount of $500,000, was also cancelled. Where is that particular function being carried out now, and how much money was expended on that kind of work in the past year?

Hon. M. Harcourt: The special programs and the market development loan fund that I talked about totalled $630,000, which is the 14 percent reduction in B.C. Trade Development Corporation's budget that took place during the course of fiscal year 1992-93.

F. Gingell: I take it you're referring to the loan guarantees.

Hon. M. Harcourt: That's another part of the activities of B.C. Trade Development Corporation. During fiscal year 1992-93 we brought in $630,000 in cuts to reduce the operating budget by 14 percent and to reduce the pressure on the provincial treasury so that we could bring down the deficit.

F. Gingell: Of the $630,000 by which you reduced it, $250,000 was taken out of special programs and $500,000 out of market development fund assistance. Seeing as we're already $120,000 over the top, what other reductions were made to make up this total of $630,000?

Hon. M. Harcourt: Expenditure savings during 1992-93 in B.C. Trade were operating and administrative savings and budget reductions of $170,000, the application of funds appropriated for the B.C. international corporation -- that's the $250,000 we spoke about earlier -- and program savings and reductions across the Trade Corporation of $210,000.

[4:15]

F. Gingell: What about the cancellation of this $500,000 in the market development fund to assist British Columbia companies engaged in developing projects?

Hon. M. Harcourt: There are three ways in which the Trade Development Corporation has tried to do its part to help pay down the deficit. First of all, the 1992-93 budget was reduced $1.599 million over 1991-92. During the year, a further $630,000 was cut from the Trade Development Corporation. Thirdly, during the year to date the Trade Corporation achieved further expenditure savings of $91,400 as of June 17, 1993.

F. Gingell: When you speak about the $1.599 million reduction in the expenditures between 1991-92 and 1992-93, how does that reconcile with the fact that the British Columbia Trade Development Corporation's expenditures were $11.914 million for the year ended March 31, 1992, and $14.118 million for '92-93? That is an increase of $2.204 million.

Hon. M. Harcourt: Those were the additional responsibilities I talked about in my opening remarks. They were transferred from the Economic Development ministry to B.C. Trade Corporation, being the international offices. I want to make the reason for those changes as clear as possible. If you have the international offices, the cooperative overseas market development program and Airshow Canada 1993 -- which used to be in the Economic Development ministry and was transferred to the B.C. Trade Development Corporation -- and you compare those two budgets as though they were in B.C. Trade the year before, you would then find that 1 percent increase in the overall budget.

The international offices, which used to be in Economic Development, had a budget allocation of $6.951 million, and the cooperative overseas market development program had a budget of $2.005 million. When you add in the Airshow Canada 1993 budget and subtract the business information centres -- which should be at the local level through Economic Development and the community-based offices we're establishing -- that is a budget of $888,800. The net transfer to B.C. Trade's budget of those functions and added responsibilities was $8.068 million.

F. Gingell: I'd just like to summarize that. In the year 1991-92, they spent a total of $11.914 million for expenses. You add to that the $8.068 million, which is the net of the additional responsibilities and the ones taken out, and you would come to a total of $20 million, all but nothing. You actually spent $14,118,000. So I take it that you reduced the expenditures by almost $6 million?

Hon. M. Harcourt: Just so we're going off of the same piece of information, can you tell me which page in the annual report that I tabled this afternoon you are operating from?

F. Gingell: Page 14.

Hon. M. Harcourt: Okay. As I stated earlier, we cut substantially in the 1992-93 budget compared to the 1991-92 budget. We basically chopped $1.6 million out of that budget. Probably the more accurate comparison would be to add the functions that we received from Economic Development into last year's budget and compare them in this year's budget. That would give you a fairer comparison of how B.C. Trade is operating.

If you look at page 19 in the annual report, you will see that it gives the half-year costs for the nine foreign offices and includes the provincial contributions and other revenues. It shows some of the revenues that the B.C. Trade Development Corporation gains through fee-for-service or the loan guarantee program. If you add those functions that I've talked about -- the three that we received from Economic Development -- to last year and compare it to this year, that gives you a more accurate description of the change in budget, which I said was a 1 percent increase this year over last year.

[ Page 7926 ]

L. Stephens: I'd like to talk a little about the overseas trade offices that were taken from Economic Development, Small Business and Trade and moved over to the B.C. Trade Development Corporation. I'd like to know whether or not there have been any substantial changes in their mandates and programs. Have there been any significant changes at all since the transfer?

Hon. M. Harcourt: Yes, there have been some substantial changes in the operation of those offices, based on an internal review by the executive and the board of B.C. Trade. The decision was to get out of the diplomatic business and into export promotion, to work very closely with the Canadian government and our embassies and legations abroad, and essentially go to a leaner, more result-oriented series of offices.

To that end, we and the board have adopted the policy -- and it's being implemented over the next few months -- of having three continental headquarters: one in London for Europe; two here in Vancouver for the Americas; and three in Asia, with a Tokyo office. The other offices are being changed to economic and trade and investment promotion offices, with local contractors who will be able, in their contracts, to deal with their own housing and office expenditures.

One of the problems with these offices if they're set up as junior embassies is that in a number of centres they're very costly. We think we can get better performance for less cost to the taxpayers out of people who have very specific contracts and targets for what they're expected to do there. For example, in Tokyo we discovered when we took over that the cost of accommodation for the British Columbia agent general was about $400,000 a year; it was very expensive.

We think that the cost of the office, although it's located in the embassy -- and it's a magnificent embassy in Tokyo; you can't find a better combination.... In certain other areas we'd be better off to have local business people, local trade-related people who know those markets, pick up the costs of their accommodation, the schooling for their children, their annual leave and the cost of office accommodation. We can get far better performance for a lower cost.

That's the direction we're going in, and the changeover of the offices in Munich, Korea, Taipei, Hong Kong and Southeast Asia will be to that concept. As we see new market opportunities -- as we do in Mexico, Chile, Argentina and other centres -- and they justify having a presence in those areas, then we will look at similar types of arrangements.

L. Stephens: I certainly support a privatized form of the operation of the trade offices. We're all aware of the costs associated with running organizations, and we have to cut costs as much as possible. I think we would support that move.

[4:30]

I'd like to talk a little about the office in Osaka that was opened on your last trip. One of the stated objectives was that the Kansai area will be experiencing some significant growth -- something like $300 billion in investment expenditures is coming up in that area, including the international airport, Transport Osaka, Osaka Bay development area, Kansai Science City and the Osaka domed stadium.

I wonder if the office has been there for sufficient time to bring some benefits to business in British Columbia, whether or not any British Columbia businesses have been able to access contracts in some of those areas from the Osaka office in particular, and whether or not there have been some substantial benefits to the province.

[M. Farnworth in the chair.]

Hon. M. Harcourt: The office activities will start after July 1. Wilf Wakely, who will be our trade officer in the Kansai area, is going to be on the ground in July locating his family and looking at some of the very creative office arrangements you can arrive at with the greater independence he will have: sharing office space; having people who would like to have the B.C. trade official in their space and giving them good market lease arrangements. Even though it doesn't physically exist right now, the office got off to a very successful start at our recent visit in April.

Over 30 companies from British Columbia were in attendance at a trade and investment forum that the Trade Development Corporation put on in Osaka. The Osaka trade officials and the consul general for Canada thought we would maybe have 200 to 250 Japanese business leaders attend the afternoon function and reception following it. Over 500 attended. They had never had such a successful economic forum. No other government had had that kind of success. For a series of reasons, there was huge interest in British Columbia.

The other reason for the success is that the audio-visual presentation was done, by and large, in Japanese. We can now use this elsewhere as a very attractive centerpiece, along with Robert Davidson's mask of the eagle, in opening up British Columbia's opportunities. Six of the speakers focused on food and agricultural products, housing components, manufactured homes, knowledge-based industries, tourism and other areas of opportunity. The airport for the Kansai area which will be opening shortly is quite technically breathtaking. It cost $12 billion. The Japanese government picked up 87 percent of that.

It was built four kilometres out into the sea. That airport is going to open up some tremendous new opportunities for Canadian Airlines, Air Canada and others when it opens next summer.

Three of the six British Columbia speakers spoke fluent Japanese. Our trade representative, Wilf Wakely, is not only fluent in Japanese but is also fluent in the Kansai dialect, which is quite different from that of Tokyo. He is married to a woman from a very old and respected family from Kyoto. We think that we have developed some tremendous opportunities in the Kansai area, which has about 23 million people directly but opens out into 60 million citizens in the western and southern parts of Japan.

L. Stephens: So July is sort of the kickoff date for this new office to be open for business, so to speak, to facilitate British Columbia business and the Japanese market getting together, and it is going to be part of the

[ Page 7927 ]

programs that will be initiated in much the same way as the other trade offices.

You spoke a little bit about the Latin American countries. I know B.C. Trade has now focused somewhat on Latin America. I wonder what the extent of that focus is, what countries are being particularly targeted and in what areas we feel that we could do business with these countries. Is it in telecommunications, transportation, infrastructure, or high technology? In what areas would we be looking to form some kind of trade relationship with the Latin American countries?

Hon. M. Harcourt: You are right. We are starting to work very actively in Mexico and Central and South America. This is a result of our discussions with the Mexican Ambassador, the trade minister and others, both here and in meetings in Davos, Switzerland, at the World Economic Forum. At that forum this year I was also able to meet with President Menem of Argentina and his ministers, who invited British Columbians to participate in Argentina.

As well, I met with the Ambassador of Chile and the consul general here. They are very enthusiastic about working with British Columbia in a variety of areas, whether it be in forestry equipment, mining expertise and equipment, hydroelectric and energy projects, knowledge-based technology. And there's a growing tourism market from Mexico into B.C. As a matter of fact, on the slopes of Whistler and in other areas of B.C. there is now a significant number of middle-class and wealthy Mexicans who are looking for safe, beautiful, enjoyable places to come to vacation, and they're coming to B.C.

To that end, Wilson Parasiuk and Oksana Exell have been working with a number of business people here in B.C. to put together a trade association with Mexico headed by Wendy McDonald of B.C. Bearing, who has company offices in Mexico.

There are other opportunities for us in these countries. Mr. Parasiuk has just returned from a visit to those three countries and Brazil to work with members of the private sector and some of the Crown corporations on the growing trade opportunities that are presenting themselves. Now, they're not immediate or around the corner, but there are certainly tremendous opportunities for British Columbians in Mexico and Central and South America.

L. Stephens: You talked briefly about the strategic alliances that have been formed with a number of other countries and businesses in B.C. and internationally. In speaking with Latin American counties -- and Mexico in particular -- is this the same kind of format that you will be using in reaching out to industry in other countries to form strategic alliances?

Hon. M. Harcourt: Yes, we think this is an innovative way to proceed -- by combining the B.C. Trade Development Corporation, the Premier and other ministries, going as "Team B.C.," if you want to put it that way, with the best we've got in B.C. in the areas where we are a world leader, such as environmental technology, engineering services, telecommunications, transportation, subsea vehicles and computer software. Going into a market like Vietnam or Bolivia with a number of companies, or into Iran with the Geomatics team, gives tremendous clout.

We don't have companies going in individually, competing against each other and, quite frankly, confusing the business and government leaders you're dealing with. You take your best talent and mesh them, and have them drop in and out depending on the particular project. We find that going in with this consortia approach, in partnership with B.C. Trade, a Crown corporation or a government ministry, is a tremendous new way to lay down long-term relationships that don't come and go month to month, year to year. So we are expanding that.

We have something like 12 different marketing alliances which include over 400 of B.C. Trade's clients. I'll just give you an example of those alliances: the B.C. Food Marketing Council, which is a very large group; and the B.C. Environmental Technology Supplier Group, which, for example, is now dealing with the cleanup at the Hanford site in Washington State -- somewhere between $50 billion and $60 billion worth of contract work. There is also the B.C.

Wood Specialties Group of companies like Primex, Merit Kitchens, Panabode and others, a significant and growing group moving more and more into value-added wood products. One of B.C. Trade's excellent staff put together a display that we took throughout Japan to show B.C. value-added products. In Tokyo, half a million people went by this display in six days. So we're working with them.

We're working, as I said, with the Digital Mapping Group, in two countries, and Geodetic Pacific Surveys. Another consortium is the Western Canadian Wood Machinery and Service Export Association.

Other groups are Canadian Wood Technologies Group; the Western Canada Marine Group, which is looking at providing ferry construction services because of the success we're having here in British Columbia in building the superferries and other innovations that have come out of that; the Medical Devices Group; the Canada Health Initiative; the British Columbia Accelerator Technology Supplier Group, for the accelerator in Texas; and the Asia Marketing Group.

So yes, we are proceeding with a leaner, more effective trade office approach and moving into consortia and joint ventures in the private sector, with the public sector playing an appropriate role where we can be helpful.

L. Stephens: The trade initiatives fund was set up from the $30 million that was available from the B.C. Endowment Fund to go into a merchant banking proposal. What investments have been made through that trade initiative fund in this past year?

Hon. M. Harcourt: We're moving slowly and carefully with this proposal, because we don't want to duplicate what is happening in the private sector. We have reduced that $30 million to $10 million and renamed the fund the export initiative fund, because the trade initiatives fund conflicted with the name used by a very successful company here in British Columbia, the Ventures West B.C. technology investment fund --

[ Page 7928 ]

TIF. The $20 million was transferred to the ministry's merchant banking initiative. It is the Finance ministry's initiative to be involved in assisting merchant banking activities in British Columbia to expand. We are putting the final proposal together as to how the export initiative fund will operate, and we hope to have it operational this fall.

L. Stephens: Are there any policies or initiatives you would be able to tell the committee about that will be coming forward under the export initiative fund?

Hon. M. Harcourt: The focus of the Trade Development Corporation is small and medium-sized companies. We find that most major private companies have the ability and have been marketing their products and services on the world market for a long time -- except for a push here and there, as we are doing in Europe to deal with the attack on our $2 billion-a-year forest products industry, for example. It's important for us to work with industry there to beat back some of the misconceptions and misinformation about British Columbia. By and large, except for those instances, our focus at B.C.

Trade is on the small and medium-sized businesses that can benefit from consortia and the market intelligence that B.C. Trade has -- its ability to give advice on sculpting marketing plans for a particular country or a region of a country, and to potential customers; and to help put together the trade presentation and facilitate the deal.

[4:45]

The $10 million.... How it will operate is hard to predict, because that will depend to a large extent on the ingenuity of the small and medium-sized business people we will be asking to put proposals in so we can help them out. The three areas we are putting most of the emphasis on are the value-added forestry sector, the small high-tech companies and the food processing companies, whether it's agriculture or fisheries.

L. Stephens: Would that be part of the flexible networks that have been set up to assist small and medium-sized companies with marketing strategies, allowing those companies to have greater economies of scale when they are trying to penetrate export markets or markets within British Columbia, or is it particularly a provincially focused program?

Hon. M. Harcourt: They may connect. What we would be doing with companies that are moving into the export market for the first time and may need some leverage to get into a joint venture with somebody else; that have a good proposal but need the ability to secure investment from some other source; that don't have a track record at a commercial bank but have a good product.... Those are the kinds of people we're looking for. They could then join a consortium, or they may already be a member of one. But to get in and be a player, they need this kind of equity partner.

L. Stephens: I have a couple more questions. One is about the export training and counselling the corporation is involved in through the British Columbia Institute for Studies in International Trade. I understand that this is a new service the corporation is offering. I wonder what some of the programs might be and what the objectives of the institute are.

Hon. M. Harcourt: This is on page 6 of the report I tabled for B.C. Trade for 1992-93, which was just ready today to be tabled. I tabled it at the earliest possible convenience. I would have liked to have got it to you a couple of days earlier so you would have had a chance to view it.

The B.C. Institute for Studies in International Trade is described on page 6 of that report. It was launched in the fall of 1992 to give export-minded individuals and firms the job-related skills and the smarts needed to be involved internationally. It's a very pragmatic institute. It was co-founded by B.C. Trade and the Asian Development Business Seminar Society. It is a private organization guided by a private sector board of directors. The courses there are taught by experienced mentors, if you want to use that word -- people in the private sector who have succeeded in export and trade matters. It does fill a gap of knowledge that people require.

It is supplemented by another program, in which B.C. Trade works very closely with the Asia Pacific Foundation to give people who want to go into Japan, Korea or China skills in understanding the culture, the business practices, the language, the traditions and the market situation. B.C. Trade has links to these other organizations that are expanding B.C.'s capability to be a major international player, particularly in the Asia-Pacific.

L. Stephens: One final question on the merchant banking aspect: how is the merchant banking program through B.C. Trade Corporation set up? Is it in partnership with the Asian Development Bank?

Hon. M. Harcourt: The merchant banking proposal that you're talking about is not within B.C. Trade's mandate; it is within the responsibilities of the Finance minister. I understand that the Finance minister is talking to the merchant banking community about the appropriate role the province can play.

J. Weisgerber: I'd like to ask a few questions of the Premier about his trade junkets. Shortly after the 1991 election -- almost immediately after the election, as I recall -- the Premier went to Asia. While he was in Asia, the Premier promised a few things to potential investors, one of them being, as I recall, no new taxes. The other was that when questioned about his government's approach to labour policy, the Premier advised groups that his government didn't contemplate any labour legislation changes.

When the Premier came back to B.C. after that first trip abroad, he went almost immediately from the airport to the B.C. Federation of Labour convention to reassure them that his government intended to bring in changes to the Labour Code. The world is certainly small enough now that this was relayed back very quickly, and people were aware

[ Page 7929 ]

that the Premier was saying one thing in Asia and another in B.C.

It wasn't long before the Premier's Minister of Finance introduced his first budget, which had a host of new taxes and clearly revealed an anti-business bias on the part of the government. Subsequently the Legislature was called back last fall to introduce the changes to the Labour Code that the Premier had promised to the B.C. Federation of Labour, even though only shortly before he had promised potential investors in Asia that no such legislation would be introduced.

Recognizing that the Premier had seriously damaged his own reputation abroad and seriously undermined the confidence that potential investors had in his government, many British Columbians felt that after that rather disastrous first trip abroad the Premier might well save the taxpayers some money and simply stay home.

Could the Premier give us some details of his international trips? I know that he's been to Europe; I know that he's been to the United States and back to Asia. I'm curious to know how he was received. More importantly -- because I'm sure that the Premier will tell me he was very well received and that these were very productive trips -- perhaps the Premier could also give us some specific examples of the results he was able to achieve on those trips.

Hon. M. Harcourt: As the Leader of the Third Party is probably aware, I have done that. I made a ministerial statement on May 3, when I returned from my investment and trade mission to Japan, Korea, China and Hong Kong. At that time I described for the Legislature a number of very specific initiatives that had successfully been concluded or were advanced during that visit.

Just to recap, I said that we were able to sit down with the principals of Nippon Cable and to conclude an agreement for a 50-year lease on Tod Mountain. As a start, that will result in $50 million worth of investment in a magnificent new four-seasons resort that will be of tremendous benefit to the people of British Columbia and particularly to those in the Kamloops area. People will not have to freeze going up that cold, two-person chair that used to exist, because it's going to be replaced this year by Nippon Cable with a high-speed quad chair with a cover.

They are opening up that wonderful resource, Tod Mountain, to the people of British Columbia, and their reputation will bring more visitors from Japan and other areas in Asia.

In China I was able to meet a number of the leaders in Beijing, including the Vice-Premier of China, Zhu Rongji, who was the first major Chinese leader to come back to Canada, visiting here a few weeks ago. I met a number of other Chinese leaders, including ministers, vice-ministers and top officials in the China International Trade and Investment Corporation (CITIC) and Ministry of Foreign Trade and Economic Cooperation (MOFTEC).

While in Guangzhou in Guangdong province, I was able to take advantage of the personal relationships that I had built up over a number of years with the Chinese leaders. The Governor of Guangdong, which is a province of 63 million people and the administrative centre for 200 million Chinese in the southern part of China, was the mayor of Guangzhou when I was mayor of Vancouver. We were able to sign a memorandum of understanding between British Columbia and Guangdong province enabling British Columbia public and private sector companies to participate in a number of major infrastructure projects. B.C.

Hydro is pursuing the energy projects. With the Vancouver International Airport and others, we are pursuing the two major airport projects that the people in Guangdong province are going to launch. One of them is an airport in Guangzhou that will service 60 million people a year, the size of LA-X. There are a number of other projects that we included in that memorandum of understanding.

In Hong Kong I was able to conclude an agreement with Valles Steamships that will bring that flagship shipping company, if I can use that expression, into the International Maritime Centre here in British Columbia. This was possible because we worked out a new agreement with the federal government on what core staff a shipping company could bring here and removed some of the impediments that those shipping companies used to face. So Valles is going to be coming here, and we think a number of other shipping companies will soon follow.

While I was in Korea, I was able to put a proposal before SDS, which is a very rapidly growing, major high-tech company in Korea. They have had a very interesting relationship with MPR and another high-tech company here in British Columbia at Simon Fraser University, and have agreed to look at establishing their North American base here in B.C.

So those are just some of the examples, aside from what I described earlier of what occurred in Osaka and some of the activities that took place in Tokyo, which I described in my report to the Legislature a few weeks ago. The hon. member calls them junkets. I call them essential activities for a Premier and, on top of that, the minister responsible for B.C. Trade. I didn't hear the member use those terms when he was in government and his Premier and ministers went to visit their major customers.

As a matter of fact, he probably didn't use it for Japan, because until my visit, no Premier had visited Japan for four years. It is our best customer in Asia. I don't think you'd sell many cars or much lumber or coal if you didn't visit your best customers and show more enthusiasm for their purchase of our products. There hadn't been a Premier's visit to Korea -- our second major customer in Asia -- for nine years.

I can go into some other missions I've taken that were clearly targeted and had very specific purposes, which were to increase B.C.'s economy and increase investment and trade. But I think I've given a flavour of the success we were able to realize on my last visit to Asia and some of the follow-up that will occur on a wide variety of initiatives -- all told, 35 to 40. There have been similar aggressive, targeted approaches by the Premier -- and the private sector went along with me -- to the $1 trillion market in Washington, Oregon and California, and on my visit to Europe.

[5:00]

[ Page 7930 ]

J. Weisgerber: At the time the Premier made his ministerial statement, I thought that he was stretching it a bit on the Tod Mountain issue. It had been announced so many times that it was starting to wear a bit thin. As I listened to the recital of accomplishments, I am reminded of a salesman who has had a very poor month, trying to report a sale from last month and some very good prospects he might develop during the current month -- albeit not having made a sale.

It seems to me that it's very much what one would anticipate after the first trip by the Premier to Asia. Those people in British Columbia familiar with that market were convinced that the Premier would be cordially received on subsequent visits, as befits his office, but that there would be an enormous amount of suspicion because of broken commitments made by the Premier on his first trip.

Although the Premier paints a picture of a number of contacts that he has made, there is no question that those initial commitments that weren't kept in Asia have caused the Premier and his government a pretty serious loss of credibility. I wonder if the Premier has any plans to send some other trade ambassadors over there -- perhaps some people who could take a fresh look and bring some fresh credibility with them to try and re-establish those markets.

Hon. M. Harcourt: I think the success of a number of these cooperative missions speaks for itself. Quite frankly, it's not up to the Premier to sell the goods and services of the entrepreneurs in British Columbia; it's up to the entrepreneurs to do that. What I can do is help open doors. I can let people in Asia know that these are valued members of our business communities who have a track record. We can help put on receptions and trade seminars and introduce our business community to the top leaders, who are going to be their customers and will maybe go into joint ventures together in China on some of those megaprojects.

Their role, my role and the government's role is very clear. We're not manufacturing wood products or making coal or being tourism resort operators, but we can go in partnership with those entrepreneurs, and we have. In my first visit to Japan over 60 B.C. companies were in Tokyo for B.C. Week. In the latest visit, over 50 private sector companies went with me to Asia into new market opportunities in Osaka and the southern and western part of the Japan that either hadn't been prospected before or had been ignored by the previous government.

Korea, our number two customer, hadn't had a visit from the Premier for nine years. I don't think that's acceptable. For a Premier, where 60 percent of our trade is Asia-Pacific-based, to not meet the leadership in those countries is irresponsible. As the Leader of the Third Party knows, personal relationships are very important in Asia.

I talked person-to-person with some of the Asian leaders the member has mentioned about the very difficult financial situation and mess we inherited from the previous government and how we intended to deal with it, and about the very straightforward ground rules I laid down while I was in opposition and as Premier: you are welcome to invest and come and do business in British Columbia if you pay your fair share of taxes, treat your employees fairly and don't mess up the environment. Those rules are still there.

We made commitments to bring in fair labour laws and to have taxation based on ability to pay instead of punitive taxes that shifted the burden onto middle-income people and small business, and away from those who had the ability to pay. That shift under the previous government was addressed in our budgets, as well as helping to pay down the deficit.

I had a frank discussion with a number of leaders in Asia about the steps being taken by this government to pay down the deficit and our commitment to doing that. We have paid it down 35 percent in the last two years. Instead of letting it climb, as it was under the previous government, up to $4 billion and over -- way beyond the means of the people of British Columbia -- we brought it down. We brought the deficit down more than any other government in Canada, aside from Saskatchewan, and we are going to bring it down even further. We are going to do it in a balanced and measured way.

When I explained that to some of the leaders in Hong Kong, China, Korea and Japan, they understood the challenges that we faced. They still didn't like the corporate capital tax and certain aspects of the balanced and fair labour law that we brought in, but they understood the circumstances that we faced.

J. Weisgerber: I think the Premier correctly says that personal relationships in Asia are important. I guess one could say that personal relationships are important everywhere, so I'm not quite sure what that particular focus is. Equally important in Asia and British Columbia is keeping your word. Those people in Asia will recall -- and they remember -- the fact that the Premier went there in the fall of 1991 and made commitments and promises to them, and didn't keep them.

I would suggest that the province would have been better served by a Premier who stayed home and dealt with the issues that we are facing as government. The Premier would have served this province far better by being here, establishing and developing some confidence in his government and in his government's ability to manage the economy.

Previous Premiers didn't trek off to Asia and Europe at every opportunity. They were here in British Columbia building an economy that was growing, keeping tax rates low and indeed keeping the debt in control. Perhaps when the Premier was in Asia talking to them about reducing the annual deficit, he explained to them as well that when his government took office the province was about $5 billion in debt, and that by the end of this fiscal year it will be $10 billion in debt. Perhaps he will explain to them why his government has borrowed $3 billion in each of its two fiscal years, including the current one.

If the Premier is proud of having incurred more debt in two budgets than every other government combined since Confederation, then I expect he would be a pretty good salesman if he could take that package of information out and at the same time convince people that he's managing an economy they should want to buy into. But I suspect that he didn't. I suspect that the amount of borrowing by government was glossed over, if it was even mentioned.

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I'm surprised that the Premier would try to suggest to this House or to his potential customers in Asia that he had in fact controlled government deficits and government spending. Nothing could be further from the truth. As much as the Premier would like to justify his labour legislation to his own constituents, the reality is that he told business people and potential investors in Asia that there would be no significant changes to the labour code in British Columbia. He simply did not keep his word on that issue. I'm surprised that the Premier would try to paint that issue as being something other than it is.

The globe is too small for the Premier. I thought he would have learned by now that you can't move from one side of the world to the other telling different versions of the same story and expect people not to sit down and compare stories. I've no doubt that it has been discussed.

I suspect that there may be some benefit to going out from time to time to tell people about the tremendous opportunities that exist in British Columbia. This is an outstanding jurisdiction in which to invest and do business. I also suspect that the Premier would recognize that he has a responsibility to manage this economy and the government's involvement in it, and that what investors are looking for is stability in government, fair tax regimes and a commitment by the Premier to continue building an attractive investment climate here in B.C.

I suggest that the Premier and his government have failed miserably in that regard. Increased debt, increased cost of government and the policies that have been brought down over the last year and during the current year are not aimed at building economic confidence, and I'm surprised that the Premier would have the temerity to suggest that this is the situation today.

Hon. M. Harcourt: I would like to request a short break so that I can come back and address in some comfort the points that have been made by the Leader of the Third Party.

J. Weisgerber: Sorry to trouble you.

Hon. M. Harcourt: No, it didn't trouble me at all. A lot of water has been consumed during the last three hours.

The Committee recessed at 5:13 p.m.

The Committee resumed at 5:15 p.m.

Hon. M. Harcourt: I'll attempt to restrict my comments to the Premier's estimates and his responsibility as the minister responsible for B.C. Trade. I will say, though, that we have taken a far more hard-nosed look at the amounts that were being utilized by Premiers in previous governments when they were involved in trade activities. After I was sworn in as Premier on November 5, 1991, one of the responsibilities I had was for B.C. Week in Tokyo. I found that $1.2 million had been set aside for that.

I asked my officials to take a look at that, because it was a very large sum of money in very difficult financial times. Two or three weeks prior to going, we were able to cut the expenditure from $1.2 million to $840,000. So we were able to reduce that budget quite substantially and still have a very effective B.C. Week in Japan at the Canadian Embassy.

As well, I understood that in 1989 the predecessor of my predecessor budgeted $800,000 for attending Davos, and the next year $300,000 was budgeted for Davos. That basically went into hospitality and hosting. When I was there I saw that it was not necessary to spend that amount of money for what is essentially the top information-gathering forum and the ability to meet the world's leaders in business, finance and government. So the amount for Davos was reduced to $30,000, basically to cover travel, accommodation and a few other modest activities, such as targeted breakfasts, lunches and meetings.

I think we have been quite frugal with the taxpayers' money, given the way money was being utilized before. When we came in we recognized that the financial situation was going to be difficult. We didn't realize until after I had returned from my visit to Asia just how difficult it was, because the previous government had misled the people of British Columbia quite a bit about the state of the deficit.

They had not told people that we were $26 billion in debt, that $22.5 billion of that had been chalked up by the previous Social Credit government, that it was escalating at an alarming rate and that expenditures were climbing at 10 to 12 percent a year. There was just no way that was sustainable.

Peat Marwick and Deloitte Haskins gave us that information in mid-February, and it was indeed a shocking state of affairs that the $400 million deficit we were supposed to have was really $2.4 billion and climbing. The state of the books was there to be seen by mid-February. When we made that first visit to the Asia-Pacific, neither I nor the government had contemplated some of the tax measures we had to introduce to stem the red ink. But the extent of the financial difficulties that had been hidden by th