June 24, 1992 Alberta Hansard 1603 Legislative Assembly of Alberta Title: Wednesday, June 24, 1992 2:30 p.m. Date: 92/06/24 [Mr. Speaker in the Chair] head: Prayers MR. SPEAKER: Let us pray. O Lord, grant us a daily awareness of the precious gift of life which Y ou have given us. As Members of this Legislative Assembly we dedicate our lives anew to the service of our province and our country. Amen. head: Introduction of Bills MR. SPEAKER: West Y ellowhead. Bill 332 Monitoring of Methane Levels in Coal Mines Act MR. DOYLE: Thank you, Mr. Speaker.

I would like to introduce Bill 332, the Monitoring of Methane Levels in Coal Mines Act, standing in my name on the Order Paper. [Leave granted; Bill 332 read a first time] MR. SPEAKER: West Y ellowhead. Bill 333 Environmental Monitoring of Respirable Dust in Coal Mines Act MR. DOYLE: Thank you, Mr. Speaker. I want to introduce Bill 333, Environmental Monitoring of Respirable Dust in Coal Mines Act, standing in my name on the Order Paper. This Act, Mr.

Speaker, will help monitor coal dust in coal mines to protect coal miners from becoming ill from coal dust. [Leave granted; Bill 333 read a first time] head: Tabling Returns and Reports MR. BRASSARD: Mr. Speaker, I wish to file a response to Motion for a Return 224. MR. MUSGROVE: Mr. Speaker, I'm pleased today to table the 1991-92 annual report of the Seniors Advisory Council. This report includes 1 1 recommendations to different departments of the government, and the council and I are looking forward to the comments on these issues. MR. McINNIS: Mr.

Speaker, I wish to file copies of a map which overlays the map of the Three Sisters project with lands that were designated as critical wildlife habitat by Mr. Gordon Kerr when he was deputy minister of fish and wildlife and also serve notice that I'll be raising a point of order related to this at the conclusion of question period. MR. JOHNSTON: Mr. Speaker, I'm pleased to table the following annual reports for 1991: Credit Union Deposit Guarantee Corporation, Alberta Municipal Financing Corporation, and Alberta Resources Railway. head: Introduction of Special Guests MR.

SPEAKER: The Member for Banff-Cochrane, followed by Edmonton-Jasper Place. MR. EV ANS: Thank you very much, Mr. Speaker. I'm very pleased today to introduce to you and through you to members of the Assembly a very dedicated and hardworking town councillor from the town of Cochrane, Mr. Jerry Jankiewicz. Mr. Jankiewicz is a first-term councillor. He's seated in the members' gallery. I would ask him to rise and receive the traditional warm welcome from the Assembly. MR. McINNIS: Mr.

Speaker, each year the Alberta branch of the Commonwealth Parliamentary Association in co-operation with the Alberta Department of Education sponsors a parliamentary essay contest. The aim of the contest is to encourage greater awareness of the Commonwealth and the parliamentary system. I'm pleased to report that this year's first place winner is Tai Ziola from Edmonton, Alberta, in fact from the constituency of Edmonton-Jasper Place. She is a grade 6 student at Rio Terrace school. Today she is honoured for her achievement. She's seated in your gallery, sir.

Tai is there with her parents, Kim and Louise Ziola, and her brother Ryder. I wonder if they would please rise and receive the warm welcome of the Assembly. I also am pleased to introduce a delegation of environmental groups in the public gallery who are concerned with the great west country, the foothills region of the province of Alberta north of Rocky Mountain House and south of Drayton V alley.

They represent the Friends of the West Country, the Red Deer River Naturalists, the Sierra Club, a group called CAGE, which is, I think, Citizen Action Group for the Environment, and the Western Canada Wilderness Committee. I wonder if they would please rise and receive the warm welcome of the Assembly. head: Oral Question Period NovAtel Communications Ltd. MS BARRETT: Mr. Speaker, just when you think things couldn't get worse, they do when it comes to NovAtel. This is unbelievable.

A week after the government announced that it was going to take a bath of at least $566 million on that whole fiasco, some genius agreed to the following deal: as part of a restructur- ing of a $71 million loan to Cellular Information Systems of New Y ork, NovAtel offered the company a seven-year $35 million loan – and listen to this – five years interest free. I don't know of any bank that would say, “We'll cut your debt in half, and you get that money for five years on an interest free basis.” My question would be to the technology minister, but in his absence I'll ask it of the Treasurer.

Did the Treasurer know about this kind of a deal, and did he approve it? MR. JOHNSTON: Mr. Speaker, the Minister of Technology, Research and Telecommunications has dealt with this question at least seven times in the last few days. MS BARRETT: Well, Mr. Speaker, this triumvirate of leader- ship here between the technology minister, the Premier, and the Provincial Treasurer starts to remind me of Larry, Moe, and Curly Joe. But you know what? The script writers for the Three Stooges couldn't have drafted a scenario that turned out this ridiculous. Mr. Speaker, let me ask the Treasurer this.

If he knows anything at all, maybe he'll know this. Does the government have

1604 Alberta Hansard June 24, 1992 any expectation of recovering any of the money from this company, or have they basically thrown up their hands and said: it's yours; the taxpayers give it to you? MR. JOHNSTON: Mr. Speaker, what we have said is this. Any of the so-called systems loans have been fully provided for. In fact, the amount that we disclosed, probably under scrutiny right now, shows that we will probably recover more than we expected, and in fact our provision may well be higher than we expected. Therefore, what we filed when we gave the full disclosure is in fact still the best estimate at this point.

MS BARRETT: Mr. Speaker, that really begs the question: if the government expected them to recover the money, why would they give them a deal like this? The taxpayers of Alberta are facing a five-year freeze on health care funding to pay for this fiasco, and the Treasurer comes up with silly answers like we hope, we think. Good luck.

My last question to the Treasurer is this: if he's not willing to come clean on all the other information related to this particular deal, this giveaway of tax dollars, will he tell us how many more companies this government plans to give interest free loans to in an attempt to clean up the NovAtel mess, or does he know how many more companies are going to get that kind of money? MR. JOHNSTON: Well, first of all, Mr. Speaker, what we have said in the Budget Address certainly is that the amount of money which we are committing to health and education is not being reduced.

In fact, it's not even being frozen, contrary to what the member has said. If you look at the debate which has just finished in this House, we have in fact increased dramatically our transfers and expenditures to the health care system. Moreover, the grants which the province of Alberta has provided to the health care system far outstripped the grants certainly in the province of Ontario's case or still further in the case of the province of Saskatchewan. We have not at all reduced our commitments; in fact they're expanding.

The member knows full well that she doesn't know what she's talking about. 2:40 Secondly, Mr. Speaker, we have already indicated in the Legislative Assembly that the question of NovAtel is before the Auditor General. We have now had in this House enough red herring debate. The members do not know at all what they're talking about in this area as well.

What we see is that the Auditor General is now busily going through all the information which has been provided to him and which he can secure through his own efforts, and as we have committed, the Auditor General will make a very formal report as to what went wrong with NovAtel. I think that until then you're simply dealing in the area of specula- tion. That report will be made public. The Auditor General is a servant of this Legislative Assembly. He's appointed by all members, and he will do his job. MR. SPEAKER: Second main question, Edmonton-Highlands, on behalf of the opposition.

MS BARRETT: Five years of frozen health care funding, Mr. Speaker. That's what's happening. I'd like to designate the second question to the Member for Calgary-Mountain View. Ski Kananaskis Inc. MR. HA WKESWORTH: Mr. Speaker, Ski Kananaskis, which operates the Nakiska ski hill at Mount Allan, is experiencing serious financial difficulty. Given that this government is backing a $3 million loan guarantee for Ski Kananaskis, this is going to be one more financial fiasco the Alberta taxpayer is going to have to pay for.

Will the Minister of Tourism, Parks and Recreation brief the Assembly as to why negotiations are currently taking place to terminate by mutual agreement the operating lease between the Alberta government and Ski Kananaskis? MR. SPARROW: Mr. Speaker, every premise of what he said is totally not factual. We do not have a guarantee. We are not canceling the lease. The lease was renewed a year ago in May. It's a 15-year lease, and they are living up to the terms of that lease. MR. HA WKESWORTH: First of all, the minister should read the public accounts. He can find that information about the guarantee there for sure.

Mr. Speaker, in taking back the lease, the government will have to cover the bank loan, and as part of the deal being discussed, Ski Kananaskis will turn over assets to the government but continue to operate the hill for a dollar while efforts are being made to find an operator for that hill. Not only will the taxpayers have to pay $3 million, but they'll have to assume the ongoing operating costs. Will the minister describe the size of the ongoing operating costs that taxpayers are going to have to pay at that ski hill? MR. SPARROW: Mr.

Speaker, I think we should reconsider the research funding b ecause everything the individual said is inaccurate and not factual, bordering on totally leading every member in this House astray. In the days to come, I'm sure you're going to see the announce- ments from Ski Kananaskis of what they're doing and how they're changing their financial picture so that they can live up to their obligations. MR. HA WKESWORTH: Well, it's the same old story, Mr. Speaker. The government pumps in millions, and the taxpayers are stiffed with the tab.

How can the minister justify once again, one more time, sticking the Alberta taxpayers with another financial disaster? MR. SPARROW: Mr. Speaker, we are not. He may have got some rumours of a request that was made and seen a request that they may have asked for, but there's a big difference between what people ask for and what this government gives them. [interjections] MR. SPEAKER: Order. [interjections] Order. [interjections] Order. Edmonton-Glengarry, on behalf of the Liberal Party. NovAtel Communications Ltd. (continued) MR. DECORE: Mr.

Speaker, Albertans now know that the collection of the hundreds of millions of dollars owing to NovAtel has been given over to North West Trust in Edmonton. Our offices have talked to a number of trust companies and have learned from those trust companies that it is most unusual for a trust company to act as a collector of a huge portfolio like the one due and owing to NovAtel. Collection agencies that have huge portfolios confirm this. Both collection agencies and trust companies that we spoke to say that the usual practice and the ethical practice is for this kind of a job to be tendered. Finally,

June 24, 1992 Alberta Hansard 1605 we've learned that North West Trust only recently hired collection personnel because they didn't have the in-house depth to do the collection that this NovAtel portfolio required. My first question is to the Treasurer. Inasmuch as it is good business practice and inasmuch as it's ethical to deal with the business community by tendering, I'd like the Treasurer to tell Albertans why this particular contract, the collection of a huge portfolio regarding NovAtel, wasn't tendered to the finance community. MR. JOHNSTON: Well, Mr.

Speaker, the member went a long way to get to the question, and he was absolutely wrong in his lead-off. Let me first of all clarify that very important point. To suggest that a financial institution can't collect financial debts is just more silliness from that member, and all Albertans recognize that. MR. DECORE: Well, Mr. Speaker, I guess the Treasurer didn't hear the question, like he doesn't hear any of the questions that are put to him on NovAtel. Let me try again. My information from the industry is that the usual collection fee for work on a huge portfolio like NovAtel is between 13 and 20 percent.

I'd like the Treasurer to stand and without dodging the question tell Albertans exactly what the fee is that the government will be paying North West Trust in the collection of these NovAtel accounts. MR. JOHNSTON: Mr. Speaker, we're still in the process of confirming the agreement between the NovAtel entity which controls and owns the loans and North West Trust, but I can assure you, that it'll be far below what the member has men- tioned. MR. DECORE: That's just plain sloppy, just the way this government has been sloppy in the whole NovAtel fiasco. Mr. Speaker, my last question is this.

The government has hinted that more moneys will be required to pay to bad American corporations; that is, American corporations that are in financial difficulty. Y et North West Trust was told by the Treasurer that it will be a collector only. I want the Treasurer to tell us who will authorize any payments that are made to these American companies that are in difficulty that need more financial help. Who will authorize those payments? MR. JOHNSTON: Mr. Speaker, the government has never rumoured that. The Member for Edmonton-Norwood and the Member for Edmonton-Glengarry have rumoured that.

Let's be absolutely clear where the rumours come from, because most Albertans know that this is ju st pure rumour-mongering when it comes right down to the issue. Now, Mr. Speaker, what North West Trust is doing is the following. As I have explained before, North West Trust is acting as an agent. It has not taken onto its balance sheet any of the loans that are involved with respect to NovAtel, and in fact the NovAtel loans will stay inside the NovAtel corporation itself and are not being transferred to North West Trust. Secondly, North West Trust will act as an agent.

Certain of the experts in NovAtel who were in fact involved in the collection will be essentially assigned on a contract basis so that there's continuity in the file, so that the expertise is there. Finally, because the loans are already in a Crown-controlled agency, they will be presented in the consolidated statements along with all other government information. Let me make that very clear: it will be part of the consolidated statements of the government as well. So it won't be off the balance sheet as others have claimed. It'll be full disclosure. It'll be a straight objective contract.

It'll be an agency re lationship. It will not be on the North West Trust balance sheet, and the loans will stay in the NovAtel company. Now, we have also said that we made full provision for all the bad debts. In checking, Mr. Speaker, we have found that in fact we have provided at least a hundred percent in some cases and more than 75 percent in all cases in any of the loans that have been referred to. We're confident that our loan provision will allow us to collect the loans that are now outstanding, and that essentially is the update. It's complete, and anything else is simply rumours, as I've said.

Constitutional Reform MR. DA Y: Mr. Speaker, it's hard to keep up with the ever changing agenda of the federal government relating to the constitutional meetings. First we hear that there are deadlines. Then we hear that there are no deadlines. Then we hear that the country's on the brink of disintegration. Then we hear that everything's coming together. I wonder if the Premier can tell us: has he heard from the office of the Prime Minister, has heard from Mr. Clark in terms of the process from here?

Are there going to be further meetings, or is the federal government going to just march on alone, or are the lazy, hazy days of summer just going to magically bring us all together? 2:50 MR. GETTY: Mr. Speaker, some of the thoughts that I've had over a period of time are starting to firm up with actions by the federal government. I have thought over the course of the past several weeks that it would be necessary for first ministers to get together on constitutional matters. Today we have been invited as first ministers to meet with the Prime Minister on Monday at noon hour at 24 Sussex Drive.

I'm sure that will allow us all to discuss a variety of constitutional matters. MR. DA Y: Well, forgive me, Mr. Speaker, for not having the faith that the Premier has and for being a little bit suspicious about a possible agenda here. We've got the Queen coming, we've got July 1, and we've got all the Premiers looking like they're secluded over lunch at 24 Sussex Drive. Can the Premier tell us: is he prepared for the pressure that may be upon him to give in to various demands as all of these events unfold in this scenario. [interjections] MR. GETTY: Mr.

Speaker, it's obvious that the members of the opposition don't consider the matter of Senate reform and the matter of a constitutional package for the future of Canada to be an important matter. If you watch them, they consider it just something to laugh about. I hope that the students who are in the gallery today and people who are watching the opposition by television would get a sense of the way in which they treat very serious subjects. They would not be very happy with that performance. Nevertheless, Mr.

Speaker, I believe the agenda that the federal government will want to discuss on Monday will be the matter of Senate reform, veto or amending formula, the federal economic powers as set out in

section 121 of the Constitution, and aborigi- nal matters. For my part, I believe that such a package should be expanded to make sure that the five Quebec conditions are part of the discussion as well as the Ontario desire for a social charter. It would seem to me that if we brought all of those matters together, we would then be dealing comprehensively with the key matters in a constitutional package.

1606 Alberta Hansard June 24, 1992 MR. SPEAKER: Edmonton-Avonmore, followed by Calgary- North West. Women's Health Care MS M. LAING: Thank you, Mr. Speaker. My questions are to the minister responsible for women's issues. A r ecent report, Sharing the Vision, released by the Salvation Army Grace hospital in Calgary states in the strongest terms possible the concern that government and citizens do not pay attention to the unique health care needs of women either in terms of research or in the delivery of services.

More specifically, in Calgary and Edmonton breast- feeding and postpartum support services have been cut back and women's wellness centres face serious funding shortages and may close. These services not only enhance the quality of health care, but they save precious health care dollars. My question to the minister: will she now commit to ensuring that the health care needs of women and children, indeed of Alberta families, will not be sacrificed by this government? MS McCOY: Mr. Speaker, let me first say that I have the greatest of respect for the Grace hospital in Calgary.

For example, its women's resource centre is a leader in Canada, the services it provides, and the hospital has led the way in many innovative responses to women's health concerns. Secondly, let me say that I have not had the opportunity to read their report. I believe there is a meeting in Calgary on Thursday among many of the health care givers to look at the allocation of resources. I should certainly hope that they will make a priority for women's health issues. MR. SPEAKER: Supplementary. MS M. LAING: Thank you, Mr. Speaker. I will send the minister a copy of the

section of the report. My second question to the minister. The report notes a lack of attention to women in research that deals with disease and treatment. This is not surprising given that boards making these decisions are dominated by men. For example, the Alberta Cancer Board is comprised of 10 men and two women, and the Scientific Advisory Council for the Alberta foundation for medical research has 14 men and no women.

Will the minister responsi- ble for women's issues now advocate on her own behalf, on behalf of Alberta women and Canadian women to ensure that women have equitable representation on boards making decisions about health research and treatment funding? MS McCOY: It's a subject very near and dear to my heart, Mr. Speaker. There is no question that there is no gender balance on those boards, and I would continue urging, as I have been for some five years now, more appointments of women to such important boards. MR. SPEAKER: Calgary-North West. Safety Codes Officers MR. BRUSEKER: Thank you, Mr. Speaker.

My questions are also for the Minister of Labour. I have had phone calls from the towns of Three Hills and Lomond, to name just two, concerned about a shortage of rural safety codes inspectors. In some cases, in fact, fire and new building inspections are not being performed, and as a result public safety could be at risk. My question to the minister is simply this: what is the minister planning to do about the shortage of rural safety c odes inspectors in the province of Alberta? MS McCOY: Mr.

Speaker, we are, as the member knows, moving towards implementation of the new Safety Codes Act, which will in fact increase the opportunity for more qualified people to provide the kinds of services the member is mentioning. I should also say that we have moved to identify those areas which have the highest risk, and our own department employees do prioritize their responses according to the degree of risk that is inherent in any given structure. MR. SPEAKER: Supplementary. MR. BRUSEKER: Thank you, Mr. Speaker. In many places these positions are filled by people like the volunteer fire depart- ments.

These people are being asked to give up time from their businesses to go get training. So my supplementary question to the minister is: how does the minister plan to ensure that on one hand the training will be given to these safety codes officers, yet on the other hand they can ensure that their businesses remain operational? Many of these are simply a one-person business, and they don't have relief staff to accommodate time off for training. MS McCOY: Mr.

Speaker, volunteer fire brigades are a great tradition in Alberta, and we all know that the courage and the community service of the people who do volunteer their time and efforts in those brigades has stood us in good stead over the years. In terms of giving them training so that they are able to handle the fires they are called to with a minimum of risk to themselves, this is an ongoing challenge. Our fire school in Vermilion, however, has been responding to that need over the years and continues to be again one of the leading institutions in Canada for that purpose.

However, as we continue to get more sophisticated in materials which have fire risks and also in our capacity to handle them, there is an ongoing upgrading and retraining component. In each and every one of those cases the fire school and the municipalities co-operate among themselves to have the most appropriate and expedient arrangements made to accommodate the needs of the fire fighters. MR. SPEAKER: Rocky Mountain House, followed by West Y ellowhead. 3:00 Natural Gas Sales to California MR. LUND: Thank you, Mr. Speaker.

Situated in the Rocky Mountain House constituency is the world's largest natural gas processing plant as well as many smaller natural gas processing plants, so it's easy to understand why the sale of natural gas is so important to this constituency. Today the National Energy Board issued a very strong decision regarding the sale of natural gas to California. To the Minister of Energy: is this decision consistent with Alberta's actions, and what are the immediate implications? MR. ORMAN: Mr. Speaker, as the hon. Member for Rocky Mountain House pointed out, this is a very important issue to Alberta.

Really the background for the decision by the National Energy Board with regard to natural gas exports began in December of 1988, when Pacific Gas and Electric made an application to the National Energy Board to get their gas licence extended. They made representation that it was a good long-term relationship with Alberta and that they wanted it to continue, and therefore their licence was extended. In February of 1990 they had a hearing in

June 24, 1992 Alberta Hansard 1607 California that basically tried to subvert long-term contracts between Alberta producers and the utilities in California. This relationship with California has really eroded ever since. That resulted in this government bringing forward the Nova Terms of Service Regulation Validation Act, Bill 9, this spring in the Legislature to really preserve those long-term contractual relation- ships.

The National Energy Board decision really lends weight and support in a major way to the position that the Alberta govern- ment has taken over the last couple of years and simply says that Alberta and now the National Energy Board will not allow unilateral action to be taken to abrogate long-term contracts. Mr. Speaker, producers rely on these contracts to finance their exploration and production activities in this province, and we are saying, as is the National Energy Board: if you want to buy Alberta products, live up to your contractual relationships. The NEB decision and Bill 9 do both of those things. MR.

SPEAKER: Supplementary, Rocky Mountain House. MR. LUND: Thank you, Mr. Speaker. Many of the producers in the Rocky Mountain House constituency are presently evaluat- ing further expansion of natural gas sales to California. To the Minister of Energy: what are the implications of these projects for the province? MR. ORMAN: Mr. Speaker, that is a very important yet delicate question to ask. The producers are trying to discreetly separate the expansion to California and the existing restructuring of flowing gas to California, but I don't think that can happen.

This certainly puts in some jeopardy the possibility of pipeline expan- sions to California in terms of timing more than anything, whether they occur now or whether they occur at a time when there is greater stability and a greater reliance on the certainty of the regulatory bodies in California. We want to know, as do producers, as does the National Energy Board now, that if there is further gas to be sold to California, there's a level playing field and we know what the rules are up front.

The rules are that if you enter into a contract, you live up to that contract or you negotiate your way out; you don't rely on a regulator to arbitrarily change those contracts. The Altamont project and PG and E are both looking to expand sales to California. I should say, Mr. Speaker, that I'm frankly disappointed with PG and E and their lack of support for Alberta producers before the regulatory commission in California.

I think that they should be standing up and saying, “Y es, we entered into those contracts, and we believe that contractual sanctity is an important relationship to maintain.” That hasn't happened, and it does cast a pall over pipeline expansions to California. Coal Mine Safety MR. DOYLE: Mr. Speaker, the minister of Occupational Health and Safety's committee to establish new regulations governing coal mine safety has proven to be nothing but a total sham.

While labour negotiated their position in g ood faith and arrived at an agreement with management's negotiating team, management and owners of the coal mines are now refusing to accept the recom- mended new regulations. They're saying that their own represen- tatives in the negotiations did not have the power to bind them to any agreement.

Will the minister of Occupational Health and Safety admit that the long negotiations of the new regulations he has been relying on to deflect questions about coal mine safety were a farce and a waste of time, designed to accomplish nothing but a delay in dealing with the problem of coal mining? MR. TRYNCHY: No, Mr. Speaker. MR. DOYLE: I guess he wouldn't admit it, Mr. Speaker. Mr. Speaker, the minister has pledged to the mine workers to establish another mine safety committee. He wants to start the new negotiations based on the draft regulations agreed to in the first round.

Since labour accepted the agreement and management didn't, it appears that the minister would like the draft to repre- sent labour's position and leave management free to try to water it down to see if it would be acceptable. Given that the miners now have no reason to believe in this minister's commitment to mine safety, what assurances w ill the minister give that the regulations coming from his new negotiations will not be weak- ened even further and will be finalized by January 1993? MR. TRYNCHY: Mr.

Speaker, I think the gentleman across the way should get another script writer, because everything he says in that riding is wrong. I visited the mine a week ago, and they pledged to the workers and the employers . . . MR. DOYLE: I was there yesterday. Speaker's Ruling Interrupting a Member MR. SPEAKER: Order please. [interjection] Order. Y ou asked your question and your supplementary. [interjection] Hon. member, just be quiet, please. Y ou forget what the system is: ask a question, wait for an answer, ask a supplementary, wait for an answer, and don't shout back and forth. Got it? Thank you very much.

Now we'll look to Edmonton-Jasper Place. Sunpine Forest Products Ltd. MR. McINNIS: Mr. Speaker, the area south of Drayton Valley, north and west of Rocky Mountain House, east of the Forestry Trunk Road is a natural treasure. In any given weekend thou- sands of Albertans can be found hunting, fishing, or observing nature. A recent study in the private sector suggested that the Rocky Mountain House corridor is worth much more ecologically and economically in its present state, where tourism is a prime activity and small local logging operations already occur.

I would like to ask the minister of tourism if he is documenting the tourism/recreation use and potential for that area, known as the Brazeau timber development area, so that these options can be considered alongside the Sunpine option of clear-cutting. MR. SPARROW: Mr. Speaker, on a continual basis we work with the departments of Forestry, Lands and Wildlife and tourism on the integrated management planning process, which sets out the objectives of an area. On each area that is in a forestry area we actually work on a continuous basis on their yearly plan.

So very definitely our staff work hand in hand and have identified the opportunities throughout many regions of the province. MR. McINNIS: Mr. Speaker, the problem is that the ongoing tourism activity can be destroyed by rapacious logging. So I'd like to ask the Minister of Forestry, Lands and Wildlife, who has many times promised public input on major allocation decisions by his department, if he will undertake today to ensure that he will take whatever steps are necessary to have the proposed

1608 Alberta Hansard June 24, 1992 Sunpine forestry management agreement sent to the Natural Resources Conservation Board alongside tourism options so that the public can review the options before he signs the deal. MR. FJORDBOTTEN: Well, Mr. Speaker, first of all, there's been a lot of public consultation on the area that goes back a number of years with respect to the integrated resource planning process that took place. I have to remind the hon. member that a forest management agreement is a commercial document that spells out terms and conditions for the company.

That doesn't give them the right to cut any wood. Before they cut any wood, they need harvesting plans and an annual operating plan, and that is subject to ongoing public consultation. It's not good to have just one snapshot in time, because it's an ongoing, a living process, and that's what we've established to review this. Along with that, going back to his first question, what's of paramount concern is not only the wood resource but the wildlife resource, the recreational opportunities, sensitive habitat, and sensitive areas, which are all looked at along with logging. Logging is only one part of the process.

It's not to take away from the recreational opportunities that are in the area. MR. SPEAKER: Calgary-McKnight. Senior Citizens Programs MRS. GAGNON: Thank you, Mr. Speaker. We continue to get phone calls from seniors who express skepticism over the government's supposed concern about their welfare. The minister's public meetings are causing seniors to rightfully question the government's commitment to their open and fair consultation. Seniors are telling us that the meetings are stacked and manipulated by government. My question is to the minister responsible for Seniors.

If the government really wants to hear what seniors have to say at their public meetings, why are the meetings chaired, facilitated, and the results of proceedings recorded and controlled by government employees? 3:10 MR. BRASSARD: Well, I'd like to thank the hon. member for her interest in a process that's been going on for almost a year, in fact a little over a year. Mr. Speaker, about a year ago we made a commitment to consult with seniors. We've done this on as comprehensive a basis as possible, and it's true that part of that consultation process is holding forums across the province.

The participation has been voluntary. We've asked people of all ages to come forward to the meetings and devote a full day to the discussion not of our agenda but of theirs and what they see are the principal issues facing seniors now and in the future and what they see as a solution to that. We felt it only fair that if we are asking as many as 120 and 150 people who attend these meetings to give up a day, we handle this day in as professional and as neutral a manner as possible. So it is true that we tendered a process where we would have facilitators who were skilled in chairing such meetings.

We didn't prepare the agenda. We prepared discussion papers that they may use at the meetings, but certainly we did not control either the input or the outcome of those meetings. MRS. GAGNON: Mr. Speaker, the seniors see this as patroniz- ing and manipulative. If the government really wants the seniors to trust this process, will the minister stop the nonsense right now and let the seniors run and record their own meetings? MR. BRASSARD: Well, I'm really disappointed in the reaction of the member, because I haven't heard those comments from any of the people who have attended the meetings.

As a matter of fact, we have had nothing but praise from the members of the seniors' community as well as from those providing services to the seniors for the meetings that we've held. They've been informative, they've been thought provoking, and they are going to be a portion of our document that is laying out an agenda for the next 15 or 20 years for the seni ors in this province. It's a very, very worthwhile exercise. It has had very good results. The meetings have ended.

We're in the business right now of trying to compile all of the vast amount of information we've gathered, and I have nothing but praise for both the process and the results. MR. SPEAKER: Banff-Cochrane. Access to Children of Divorced Parents MR. EV ANS: Thank you, Mr. Speaker. Last night I was privileged to participate in a meeting that was organized by the minister responsible for women's issues to discuss a very thorny issue, and that's court-ordered child access.

Representatives from the Premier's Council in Support of Alberta Families, the Alberta Women's Secretariat, noncustodial parent support groups, grandparent support groups, and also from the justice system met in a very nonconfrontational environment to discuss issues. I believe the meeting was an important first step. My question to the minister is: what did the minister learn about the inadequacy of the present system? MS McCOY: Mr.

Speaker, I think it's fair to say that all of the participants found the meeting to be very useful, and I take this opportunity to thank the Member for Banff-Cochrane for taking the time to participate and contribute as well. It was a meeting, as I said yesterday, to begin to explore the issue, and it rapidly emerged that there was wide consensus among the various points of view at each of the tables. One of them was that the current system dealing with access to children after divorce in fact is adversarial, and indeed the way it is structured tends to increase adversarial relations between parties.

Moving beyond that, however, we approached values and principles, and it was without a doubt everyone's shared value that children should be the centre of any process that deals with these questions and that it is their rights and interests and needs which we must concentrate on at all times. Moving from there, there was also a statement that was endorsed by the meeting that we need to be very careful in how we deal with the definition or the understanding of family, because we must always remember that when there are children, the relationship with them does not depend upon a marriage certificate. MR.

SPEAKER: Supplementary, Banff-Cochrane, followed by Vegreville. MR. EV ANS: Thank you, Mr. Speaker. I certainly agree with the minister that there was a great deal of consensus at the meeting last night, and based on that consensus, my supplemen- tary question to the minister is: what course of action has she identified to follow up on this very positive meeting? MS McCOY: Mr. Speaker, we left that to the participants to address, given that it was one evening and also of course that it is their process that has begun. They recommended that this

June 24, 1992 Alberta Hansard 1609 should be the first step only. I think their second recommendation is that we have another similar evening. In fact, because of the time we had last evening, we began to get a much better and in- depth understanding of the issues from the various points of view but had not really moved into beginning to sketch out solutions. So I would expect now to convene a similar meeting fairly shortly with the same people involved, and we will begin then to explore solutions. MR. SPEAKER: Vegreville, followed by Edmonton-Whitemud. Drought MR. FOX: Thank you, Mr. Speaker.

While rainfall has finally blessed the southern part of the province, the northeast region remains extremely dry. In fact the drought that began over five years ago continues in 1992 with no relief in sight. The govern- ment has refused to provide disaster assistance for the area, and the Minister of Agriculture refuses to recognize just how serious the situation is.

In fact, he said in this Assembly on April 29, and I quote: “One year – or more correctly put, half a year – of severe drought can hardly constitute a disaster.” To the Associate Minister of Agriculture: what specific plans does the government have to help livestock producers, grain farmers, farm families, and their communities who need water in northeastern Alberta? MRS. McCLELLAN: Well, Mr. Speaker, we have responded on the water issues with a very comprehensive water assistance program, first in the dugout program, some emergency measures for the short term late last fall. So on that side of it we have.

For the grain farmers certainly we have in place a very compre- hensive crop insurance and revenue insurance program, which this government commits to very significantly through its budget process. So that's on the crop side. For the feed side certainly I would hope that the producers in that area are taking advantage of the forage insurance and pasture insurance programs, because certainly that is what they were put in place to deal with. MR. FOX: Mr. Speaker, the minister mentions the supplemental rural water development program. That program ended on March 31, but the need for the program did not.

Will the government agree to extend funding for this program so that farm families in the northeast can get the help they need to dig wells and dugouts? MRS. McCLELLAN: Mr. Speaker, parts of that program definitely had a sunset on them and with good reason, because the dugout program and so on was put in place to provide a catchment in the hope that there would be some runoff. I would just simply tell the hon. member that we do have a drought committee in Alberta Agriculture that was reactivated very early this season because we had a number of areas in the province that were dry.

That committee is continuing to work, and we will continue to work with that committee and with the producers in that area, particularly in water for livestock, because it is a very critical problem for them, as well as for their domestic use. MR. SPEAKER: Edmonton-Whitemud. 3:20 Ombudsman's Report MR. WICKMAN: Thank you, Mr. Speaker. In the Ombudsman's 25th annual report three departments stand out way, way over the average in terms of complaints and, even more significant, in terms of the number of complaints upheld by the aggrieved parties.

To the minister with the most complaints and responsible for workers' compensation: why has the minister failed to come to grips in dealing with injured workers and their grievances? MR. TRYNCHY: Mr. Speaker, when looking at the Ombuds- man's report, complaints supported are 19 out of 195. I thought that was a pretty good record. MR. WICKMAN: Mr. Speaker, to the minister: 19 in compari- son to the others is way, way, way, way high.

My second question to the number two minister of complaints, the minister responsible for Family and Social Services: when will the minister start to deal with his responsibilities in a fashion that reflects compassion and heart instead of the harshness his complainants have encountered to date? MR. OLDRING: Well, Mr. Speaker, that kind of nonsense is what we've come to expect from that particular member, but I'm not going to participate in the debate at that level. I would only want to reiterate, I think, a very significant observation that my colleague to my right pointed out.

That is to say that in our department, Mr. Speaker, we're not very pleased that there were 184 files opened in 1990. Obviously if there's one file opened, we're not very pleased with that. We do our best to make sure that complaints and problems can be resolved at the delivery level of the services that we provide.

Recognizing that this department is responding to the needs of hundreds of thousands of Albertans, is involved in some very complex programs, some very significant programs that were undergoing some very thoughtful changes this past year, I would be remiss if I didn't point out that out of those 184 files opened only 39 complaints were supported. Although we're not happy about having 39 complaints supported, as I say, we do everything we can to resolve it long before it reaches this report.

I would say that it is an incredible tribute to the employees of this department to think that they could reach out to as many Albertans as they do to provide the multitude of programs that they do and only have 39 complaints substantiated is pretty significant in my books, Mr. Speaker. MR. SPEAKER: Might we revert to Introduction of Special Guests? HON. MEMBERS: Agreed. MR. SPEAKER: Opposed? Carried. Thank you. Lesser Slave Lake. head: Introduction of Special Guests (reversion) MS CALAHASEN: Thank you, Mr. Speaker.

On behalf of my colleague the MLA for Grande Prairie I am pleased to introduce a grade 6 class from Beaverlodge elementary school sitting in the members' gallery. There are 42 students and 15 adults in the group, including two teachers, Alan Walker and Richard Smith. I'd ask the whole group to stand and r eceive the warm welcome of the Assembly. MR. SPEAKER: Two procedural matters. First, a point of order, Edmonton-Jasper Place, and then the Chair will give the ruling with respect to the purported point of privilege of a few days back. Thank you. Edmonton-Jasper Place.

1610 Alberta Hansard June 24, 1992 Point of Order Factual Accuracy MR. McINNIS: Thank you, Mr. Speaker. Y esterday in question period I asked questions of the ministers of tourism and Forestry, Lands and Wildlife about the Three Sisters project presently before the Natural Resources Conservation Board.

The questions I asked were about a 1979 agreement signed by two ministers setting aside certain lands for wildlife habitat in mitigation of development in Kananaskis and a memorandum from the assistant deputy minister of fish and wildlife declaring certain lands to be critical wildlife habitat and asking the government to acquire them for that purpose. The minister of tourism, in response to my question on why the government would encourage development on critical wildlife habitat, said, “We're not,” and the Minister of Forestry, Lands and Wildlife said, “The way the hon.

Member for Edmonton-Jasper Place phrases his question is totally inaccu- rate.” He went on to say other things to the effect that he felt the 1979 agreement was in place. Now, Mr. Speaker, it's well known in parliament that questions must be factually based and that the member asking questions is responsible for the accuracy of those facts, and I'd refer the Chair to Erskine May's 21st edition at page 287 dealing with that point and also at page 383 dealing with the laying of documents before the Table.

I believe that the two ministers may inadvertently have misled Albertans and the Assembly in their answers, and I wish to provide information to that effect. I earlier tabled a map of the Three Sisters development which overlays Mr. Kerr's, the assistant deputy's, recommended purchase and critical wildlife lands. There is an area of overlap in the Wind valley area. To quote very briefly from the assistant deputy's memo, it says: Without belaboring the point, the above lands are absolutely critical to the long term well-being of wildlife in the P-W-R complex.

As previously mentioned the Calgary Regional Planning Commission recommends that this area be zoned for wildlife preservation and that all intensive uses be excluded. So having laid on the Table a copy of the 1979 agreement and the 1979 memorandum by the assistant deputy minister and the map which compares the two, I believe I have a point of order. I would appreciate it if the minister would rephrase his answer in light of this information. MR. SPEAKER: The Minister of Forestry, Lands and Wildlife, in response to the point of order. MR. FJORDBOTTEN: Mr. Speaker, yesterday the hon.

Member for Edmonton-Jasper Place made this statement. He said: I'd like to ask the minister who's in charge of fish and wildlife if he can explain when it became government policy to promote condomin- ium, golf course, and commercial development on critical wildlife habitat. My answer: Mr. Speaker, the way the hon. Member for Edmonton-Jasper Place phrases his question is totally inaccurate. What he was doing in his question was leaving the implication that we don't care about wildlife and that we don't care about sensitive wildlife habitat, and that is not accurate at all.

Today there was a map filed, and I appreciate that the hon. Member for Edmonton-Jasper Place sent me a note with the map initially, saying that he was going to raise it as a point of order today. I might say that the map may be accurate, but I think the map is old. I'm going to have it checked, and I will undertake to report back to the House on the accuracy of that.

When we worked the trade, recognizing that there was critical wildlife habitat in that Wind valley area, we negotiated and got approximately 1,270 acres of land from the Three Sisters, and we returned some 840 acres of other land that wasn't a sensitive habitat area. So our habitat biologists were very pleased that we'd made an excellent arrangement and captured I don't think all but most of the critical wildlife habitat in that area. Going back to the hon. member's point of order, Mr.

Speaker, I know that the hon. member takes great pride in being accurate, but he is not accurate when he says that it's the policy of this government, as he states, “to promote condominium, golf course, and commercial development on critical wildlife habitat.” We don't do that. Secondly, I might say in addition that the NRCB process is put in place to make evaluations of projects like this, and we should let them complete their work. If there are serious concerns with wildlife, they'll be raised and they'll be heard and a judgment will be made. There are hearings taking place right now with respect to that. Mr.

Speaker, I stand with my statement of yesterday. MR. SPEAKER: The hon. minister has given an undertaking to check the accuracy of the map with respect to current conditions. The Chair looks forward to hearing about that. Thank you. Privilege Obstructing a Member in Performance of Duty MR. SPEAKER: Now we'll deal with the matter of privilege. On Friday, June 19 of '92, the hon. Member for Edmonton- Strathcona rose on a purported point of privilege with regard to being denied access to the Fort Saskatchewan correctional facility.

While the point of privilege was not raised at the first reasonable opportunity, as required by Standing Orders, the Chair accepted at that time the argument that the situation complained of is of a continuing nature and therefore allowed the point to be examined. With respect to a possible breach of privilege as a result of restrictions being placed on a member wishing to visit a correc- tional facility, the Chair has examined the issue to first determine whether or not such access is necessary for the Member for Edmonton-Strathcona to fulfill his parliamentary duties.

If the touring of a correctional facility relates to the member's service in the House and that service is interfered with, then privilege becomes a concern. 3:30 Beauchesne 24 is clear . . . [interjection] Hon. member, sorry; we're in process. Cause the door to be opened and the member to come in. I'll start from the top of the page. I assume the hon. Member for Edmonton-Whitemud will read what's already in Hansard to this point. Thank you. Beauchesne 24 is clear that The privileges of Parliament are rights which are “absolutely necessary for the due execution of its powers”.

They are enjoyed by individual Members, because the House cannot perform its functions without unimpeded use of the services of its Members. On June 19 the Member for Edmonton-Strathcona at page 1506 of Hansard stated that as Official Opposition cr itic for the Solicitor General's department, access to certain correctional facilities is an extension of his duties in the House. The Chair accepts on a qualified basis the principle of this statement, as members do have duties which are an extension of their parliamen- tary duties. The Chair also accepts on a qualified basis that the

June 24, 1992 Alberta Hansard 1611 work of an opposition member relating to his or her critic responsibilities can be considered a matter connected with the internal workings of the House. After considering that the members' parliamentary duties may be affected by restricted access, the Chair examined whether or not such restrictions, if they indeed exist, could prima facie constitute a breach of privilege. The Chair is concerned that all policies related to members be equitably applied.

If restrictions placed on one member were not applicable to all members, this could, in the Chair's opinion, potentially constitute a breach of privilege. The Chair requested additional documents from both the Solicitor General and the Member for Edmonton-Strathcona to determine whether or not the restrictions on visitors to correctional facilities are uniformly applied against all individuals of any particular group or class, including MLAs. An internal policy directive supplied by the minister from the correctional services division of his department dated May 30, 1983, seems to clarify the matter.

The Chair will file a copy of this policy statement in the House. The document consists of a policy statement and six implement- ing procedures specific to granting access to correctional facilities for MLAs, MPs, and other elected officials or dignitaries. The policy states, “Members of the Provincial Legislature shall be provided access to Correctional Centres at all reasonable hours.” Based on the policy statement alone, it would appear that the Member for Edmonton-Strathcona should have been provided access.

However, the six procedures which follow as part of the policy directive must be considered, as they form part of the policy. As the Chair understands these procedures, it appears that safety is the primary consideration in the present policy, and the policy directive takes note that elected officials may in fact be in more danger in a correctional facility than ordinary members of the public. The memo makes no mention of party affiliation or any other criteria which might allude to arbitrariness and a possible breach of a member's privileges.

Importantly, the first of the six procedures specifically states: Members of the Legislative Assembly of Alberta wishing to tour provincial Correctional Centres are required to receive permission . . . from the Solicitor General. The Member for Edmonton-Strathcona did indeed comply with this requirement by writing to the Solicitor General on June 9, 1992. On June 12 the Solicitor General responded in writing to the hon. member's request. The Chair notes in the Solicitor General's response two specific sentences: Unfortunately, I am not able to grant your request at this time . . .

Should the opportunity arise where a tour might be facilitated, I will inform you. When one reviews the response of the Solicitor General to questions raised by the Member for Edmonton-Strathcona during question period on June 18, 1992, as found on page 1461 of Hansard, the reasons for these two statements in the Solicitor General's letter to Edmonton-Strathcona become clear. Quoting from Hansard: Mr. Chivers: . . . will the Solicitor General now reconsider his arbitrary refusal to grant me permission to visit the Fort [Saskatchewan] correctional institution? Dr. West: Mr.

Speaker, at the present time – and I've been Solicitor General for not too long at this time – I'm reviewing the policies as they relate not only to the structure of our correctional facilities but to our policies as they relate to touring the facilities. The answer directly is: until I have finished those types of reviews and looked at the structure, no. The visitation policy has been in place since 1983, and the Chair has no evidence before it that the policy is arbitrarily or inconsis- tently applied.

The Solicitor General has clearly indicated the visitation policy to be under review, and the Solicitor General's decision to put in abeyance all visits while he reviews the existing policy is within his prerogative as a minister of the Crown. The Solicitor General has clearly stated that he is not able to grant the Member for Edmonton-Strathcona's request at this time and that should the opportunity arise where a tour might be facilitated, the member would be informed. In light of this information, th e Chair rules that there appears to be no prima facie breach of privilege.

The Chair also wishes to advise all hon. members that in assembling and reviewing information over the past days with respect to this entire matter, both the Member for Edmonton-Strathcona and the Solicitor General were most co-operative. The Solicitor General did inform the Chair that the Member for Edmonton-Beverly had toured the Belmont correctional facility since he had become Solicitor General, but approval for this visitation had been granted by his predecessor and had occurred prior to the current review of the visitation policy.

Thank you. head: Orders of the Day head: Government Bills and Orders head: Second Reading Bill 34 Appropriation (Alberta Heritage Savings Trust Fund, Capital Projects Division) Act, 1992 MR. JOHNSTON: Mr. Speaker, we've had a debate which ended last night on the capital projects division of the Heritage Savings Trust Fund, and as all members know, this Bill simply appropri- ates the money to carry out that expenditure profile. The total amount of money is listed in the Bill as between departments.

The ministers have had an opportunity to present their position, and members of the opposition have had an opportunity to question the various members on these appropriations. Accord- ingly, I move second reading of this Bill. SOME HON. MEMBERS: Question. MR. SPEAKER: Edmonton-Kingsway. 3:40 MR. McEACHERN: Thank you, Mr. Speaker. A few comments about this Bill. This being second reading, it is the

section in which we are supposed to talk about the principle of the Bill. The principle of this Bill is that $102,384,000 of heritage trust fund money is going to be spent in the capital projects division. Now, since the capital projects division of the heritage trust fund has no money of its own, that means it will come out of one of the other divisions, probably the cash and marketable securities section, which has some $4 billion in it. Mr. Speaker, the various other sections of the heritage trust fund have in total about $12 billion in them.

Each year the Treasurer spends some of that money in the capital projects division of the heritage trust fund, and each year we stand up and say that that is not where these expenditures should come from. Clearly, these are expenditures that belong in the general revenue budget of the province. There is no reason that Farming for the Future shouldn't be funded out of the Department of Agriculture on an ongoing basis. The money does not need to come from the heritage trust fund, nor the irrigation rehabilitation and expansion, nor the private irrigation development assistance.

So it is with the other – the Energy, Environment, Executive Council, and so on – expenditures in this Bill.

1612 Alberta Hansard June 24, 1992 The Auditor General has pointed out over and over again that once these expenditures are made, the Treasurer just adds them to previous expenditures in these and other areas. In fact, there's a total of some $3 billion – the latest figure we have, Mr. Speaker, is from the December 31, 1991, quarterly. Capital projects division of the heritage trust fund expenditures, once they are made, are put into a

section called the deemed assets, listed in the quarterly report as deemed equity represented by deemed assets. The latest figure we have is for a total of $3,258, 937,000 of moneys that have been spent out of the heritage trust fund for the university hospital, for Kananaskis, for these items that are presently before us. What the Treasurer does by keeping them on the books is imply that somehow that money is not spent. He spends the money – and make no doubt; the people of Alberta need to know that that money is spent and that we're not going to get it back.

We are not going to sell Kananaskis park to anybody; we're not going to sell the university hospital to anybody. At least I certainly hope not. Certainly a New Democrat government would not. These are assets which the Auditor General says the government has given over to somebody else or has spent the money and is not going to get that money back and in no way is going to be able to claim it as their own again. That's true even of the two foundations, the medical foundation and the scholarship founda- tion. So he says that we should not be counting that spent money as an asset of the province.

Y et the Treasurer consistently spends that money and then doesn't account for it in a way that makes it clear to the people of Alberta that it has been spent. If you notice point 2 on the bottom of page 1 of the Bill, it says, “The due application of all money expended under this Act shall be accounted for,” but it doesn't say how it will be accounted for. We would argue on this side of the House that it will not be accounted for properly. Y es, we've had a little debate on the various expenditures in that budget, and we agree with some of the expenditures, that they are worthwhile expenditures.

My colleague from Vegreville talked about the Farming for the Future program and said that it was a good program. Some of these expenditures we have approved as being worthwhile programs, but the way of account- ing for them is not appropriate. The money is taken from the other assets, what the Treasurer likes to call the financial assets of the Heritage Savings Trust Fund. That's made up of the other five or six divisions of the heritage trust fund. At March 31, 1987, there was $12.7 billion in the financial assets of the heritage trust fund.

Through the years, due to these expenditures, that amount has gone down and down and down until we are just under $12 billion with these expenditures. Because the Treasurer then turns around and lumps in the deemed assets with these financial assets and claims that there is still $15.3 billion in the heritage trust fund, the people of Alberta are left with a false impression.

The Treasurer says the heritage trust fund is not eroded, but in fact since 1987 it has eroded consider- ably in terms of its real value and of course with inflated dollars as well, so that even more than the $700 million or $800 million that I mentioned that it has gone down in the last five years – it's worth even less than that because the dollar today is not worth as much as it was five years ago. Mr.

Speaker, the Treasurer brings forward this Bill and asks the people of Alberta and the people of this Assembly to approve $102,384,000 to be spent out of the heritage trust fund from April 1, 1992 to March 31, 1993 for the purpose of making investments in projects which will provide long term economic or social benefits to the people of Alberta but which may not necessarily by their nature yield a return to that Fund, as set forth in the

Schedule to this Act, including the amount of $55,876,000 voted by

section 1 of the Appropriation (Alberta Heritage Savings Trust Fund, Capital Projects Division) Interim Supply Act, 1992. We've already approved some of these expenditures is what that says. It says that these expenditures may not generate a return for the fund. Therefore, the Treasurer in that line is admitting that these are just expenditures, that they're not an investment that then brings a return, at least not a financial return, back to the heritage trust fund.

Therefore, it's not just a moving of dollars around in the heritage trust fund, and the Treasurer is not able to claim – with any credibility anyway; nobody else believes him – that the assets of the heritage trust fund are still $15.3 billion. He cannot claim that. The financial assets have dropped down by the amount of these expenditures, and that fact should alone tell Albertans that we should not be passing this Bill separately from the general revenue expenditures of the province.

I have spent considerable time over the last couple of weeks trying to explain to Albertans – because there's no point in talking to this government anymore; if they are in the House, they don't listen anyway – the difference between the general revenue expenditures, which is the number the Treasurer likes to throw out, and the consolidated expenditures of this province.

I certainly intend to get back to that theme in a little more detail on Bill 36, so I won't take a lot of time now, except to say that on average over the last five or six years the consolidated expendi- tures have exceeded the Treasurer's budget expenditures – the ones he owns up to and the number that he likes to use – by $2.2 billion to $2.5 billion every year, yet the Treasurer does nothing about rationalizing the system. It's here again in the Auditor General's last annual report, on page 17, for everybody to read.

He says: The practice of including deemed assets and deemed equity represented by deemed assets on the balance sheet is not appropriate nor is the presentation in acco rdance with generally accepted accounting principles. The Treasurer fails year after year after year to deal with that admonition by the Auditor General. Basically what the Auditor General is telling him: these kinds of expenditures should not be done in this way, that they have to be accounted for in a more specific and straightforward manner so the people of Alberta know what we're spending. Mr.

Speaker, I don't understand why the Treasurer should expect us to go on okaying a procedure that isn't acceptable according to generally accepted accounting principles or to the people of this province. MR. SPEAKER: Deputy Government House Leader. MR. GOGO: Well, thank you, Mr. Speaker. Speaking to Bill 34, the appropriation with regard to the heritage fund, capital projects division, one can only assume the Member for Edmonton- Kingsway is the official critic of his party.

Here we have on record again the New Democratic Party in this Assembly opposing the whole concept of the capital projects division of the heritage fund. I don't care how he clouds it. He's talking about account- ing. Indirectly he is being very critical of the various programs that are funded by the Heritage Savings Trust Fund appropriation Act. I well understand why the hon. member has no interest in Farming for the Future. I understand that. I understand, Mr. Speaker, because in Edmonton you never go without water.

Y ou cannot appreciate the very fact that water brings life to southern Alberta, the very fact that we probably have 3,000 to 4,000 farmers south of Cardston who for 75 to 100 years have provided their own private irrigation, and finally the government recognized that and put in place some assistance. The hon. member for some

June 24, 1992 Alberta Hansard 1613 reason does not understand – and if I had Genesee 2, I probably wouldn't understand either – the renewable energy research that's going on in this province. Mr. Speaker, I've listened ad nauseam to the hon. member, who's by any other way critical of what this government has done to help this province through the capital projects division of the heritage fund.

He is attempting to cloud the issue in terms of accounting, in terms of what the Auditor General may or may not say. [interjection] It's very clear to me that applied cancer research has hope for many thousands of Albertans, and indirectly he's turned around and said, in effect, on behalf of the New Democratic Party, that that program is not worthy of the funding. 3:50 MR. McEACHERN: Nonsense. That's nonsense, and you know it. MR. GOGO: I don't understand. I do not understand when the New Democratic Party lays claim to the authorship . . . Speaker's Ruling Interrupting a Member MR.

SPEAKER: Order please, hon. minister. Hon. member, you yourself are very good at shouting out comments the rest of the time, and you spoke your piece. Now it's up to you to be quiet and to listen. [interjections] Order please, and you will not interrupt the Chair on top of it. Got it? In case your memory is defective, you can look at Standing Order 13(4)(b). Thank you. Hon. minister. Point of Order Imputing Motives MR. McEACHERN: Point of order, Mr. Speaker. MR. SPEAKER: Let's hear it. MR. McEACHERN: The member across the way is imputing motives. SOME HON. MEMBERS: Citation. MR. McEACHERN: Oh, yes, he is.

He's imputing motives: 13 whatever it is. I talked about accounting principles, and he started implying a whole lot of things that I didn't say that were suppos- edly true. He's putting words in my mouth, and he's imputing motives. I resent that. MR. SPEAKER: Thank you, hon. member. Some members are right. We look forward to citations in future, but at the moment I'm afraid I interpret it as just being your reaction to getting some of your own medicine. The Minister of Advanced Education. Debate Continued MR. GOGO: To carry on, Mr. Speaker.

It was only the other evening that the official critic of the New Democratic Party with regard to Agriculture claimed authorship of the individual line service to the thousands of rural Albertans. Without the 3 and a half million dollars in here it wouldn't have happened. Here the official critic for his party is standing up and condemning that. I can only assume, Mr.

Speaker, that on the record and in Hansard today we have the official record of the New Democratic Party, which purports to represent these tens of thousands of Albertans, very clearly opposing the use of the capital projects division of the heritage fund. If they wish to withhold their support, so be it, but I can assure you that this government made its pledge to the people of Alberta and will carry it out through the continuation of the Heritage Savings Trust Fund and the passage of Bill 34. MR. McINNIS: Mr. Speaker, I would like to address a few comments in second reading of Bill 34.

I certainly agree with the acting Government House Leader that he doesn't understand, as he said several times. He clearly didn't understand what the Member for Edmonton-Kingsway said, because if he did, he wouldn't have made the comments that he did. We're darned sure that he didn't say what he said he said. W e're darned sure of that. In fact, I think the record will show very clearly that he didn't say anything like what the hon. acting House leader said he said. AN HON. MEMBER: Agreed. MR. McINNIS: He didn't say that at all.

Now, the difficulty here: we're talking about our province's heritage, and I think that's exactly what the acting Government House Leader was talking about when he interjected his remarks in the record on second reading of this Bill. These are invest- ments from the Heritage Savings Trust Fund, so they're part of the heritage of this province, which are being invested in projects which by their nature don't earn an economic return but have economic or social benefits nonetheless.

I believe the Member for Edmonton-Kingsway is entitled to be critical, as I am, of the way this government has handled our province's heritage, because there were billions and billions and billions of dollars that passed through the Treasury in terms of oil and gas nonrenewable resource revenues, which in effect were assets stripped from this province, the sale of a nonrenewable asset. It was very clear when the Heritage Savings Trust Fund was set up that some small portion of that cash flow stream was to be reserved for future generations.

Well, what is the heritage that this government's passed on from the petroleum wealth of the province? It's the heritage of NovAtel. It's the heritage of all of the economic fiascos which have to be paid for from the heritage of our province, from the sale of a nonrenewable asset. I believe that if this government had any sense at all, it would have tried a lot harder than it did to get for Albertans somewhere in the ballpark in terms of value in relation to what we gave away, because the value of those nonrenewable resources is there on the record. It's an extremely high value.

The value of some of these investments from the heritage fund and the expenditures from the general fund, all funded by this stream of petroleum dollars – you know, it was a great game for the governments of the '50s, '60s, '70s, and '80s to spend money without having to tax. That was the key to popularity. That was how they racked up these enormous electoral victories: spend, spend, spend, build facilities, programs, plaques put up. They're all over the place, but who's paying for them? Why is our budget so fundamentally out of whack?

Why is it that the Treasurer can't bring in a balanced budget, even when he stood up here with a straight face and said that he had? Now, I think we have to question what's happening on an ongoing basis from this Heritage Savings Trust Fund, in particular the capital projects division. If these are things that are of value for future generations, they should be s upported, but if they're things like subsidies for ongoing private industry, what kind of a heritage is that? Let's look at Forestry, Lands and Wildlife, the Pine Ridge reforestation nursery enhancement: what's that all about?

I'll tell you what it's all about. It's all about the govern-

1614 Alberta Hansard June 24, 1992 ment growing seedlings free of charge for the forest industry so that the industry can meet its so-called obligation for reforestation in the province of Alberta. We have a reforestation policy which is about as clear as mud in this province. We have a minister who says that the trees have to be free to grow and that it's the industry's responsibility, but we have a Treasurer who brings in a Bill that says we're going to subsidize the cost of growing those seedlings, 100 percent by the taxpayers, and that's coming out of our heritage.

He says that the Free to Grow standard is going to apply across the board; the industry says, “But we can't do that without herbicide.” Are we going to have herbicides in our province? They don't know. They haven't got any answer for that. All they've got is a bill for $1.127 million to pay more ongoing subsidies for the growing of seedlings for industry free of charge. What about grants for private irrigation projects? Is that really part of our heritage, hon. member? Is that what he's talking about?

I don't really believe that he has any credibility when he says what he said the Member for Edmonton-Kingsway said, which I know he didn't say. I think we've got some questions that need to be answered, in particular about these ongoing subsidies to private industry which were provided from the Heritage Savings Trust Fund.

I'm hoping that the minister will read more carefully in Hansard before he engages in such outbursts in the Assembly, and I'm hoping that the Minister of Forestry, Lands and Wildlife will come to this Assembly, in committee if not in s econd reading, and explain why we have to provide ongoing subsidies for private industry from this part of our heritage. Thank you. MR. SPEAKER: Edmonton-Centre. REV. ROBERTS: Thank you, Mr. Speaker.

Further to other comments from this side of the House – which make a whole lot more sense than the comments from the Minister of Advanced Education, who maybe should go out and get himself a degree in accounting. Certainly, if he got any kind of degree in accounting, which is readily available at the 29 board-governed institutions in this province . . . [interjections] Twenty-eight? However many. There are many good schools of accounting which maybe the minister and maybe the Treasurer should avail themselves of.

I mean, the Treasurer already knows how much trouble he's in by the accountants' group of Alberta having written him earlier this year telling him just how completely out of whack he is with his budget projections and the rest. [Mr. Jonson in the Chair] What I take issue with is not just the misrepresentations, the purported points raised by the Minister of Advanced Education about the Member for Edmonton-Kingsway – what we're really talking about here is how the funds are accounted for.

We'd like to have a better sense of the accounting of the funds if we're going to be appropriating another $102 million, as we are today, through the heritage trust fund to what are going to end up being deemed assets of the province. Then to have the Provincial Treasurer, the members of Executive Council, the members of the government over there going around purporting to say – Mr. Speaker, I do say purporting to say – what the fund is worth. Now, it's the task of accountants in the business world, as I understand it, to get an evaluation of worth and assets and losses and equity.

To be able to say what something is worth is no easy task. It might be worth something today that it isn't worth tomorrow. It might have had a value in the past which has in fact depreciated over time. My point is that time and time again with this Treasurer and with this government, their accounting practices are just completely sloppy and inadequate.

I mean, not only does the Auditor General, the chief accountant of the province, have to point this out to them, but we have to stand in here year after year, in some ways going around in circles of this government, telling them that this is completely inadequate. 4:00 What I would like to ask in terms of the principle of this Bill at second reading, Mr. Speaker: the principle of accounting for depreciation. Now, it seems to me that in any balance sheet, in any fiscally responsible accounting procedures, there is an amount written in for depreciation expense.

It's not just an investment that we put into this building, particularly in these capital funds which build up over time because we keep putting money into them. As anyone knows, that value has, at a certain percentage, to be written down from year to year, a certain depreciation expense. There are a variety of ways of accounting for deprecia- tion. I don't see any such method being used by this Treasurer with respect to the capital appropriation from the Heritage Savings Trust Fund. Now, there are deemed assets.

I'd like to know what the deemed depreciation is of these assets, whether he's using a straight line depreciation, if it's just according to the book value or the market value, what these investments are, how much of them will represent sunk costs. For instance, with the Husky upgrader there are a lot of sunk costs in that project.

Now, there will be equity which will be returned in time and maybe profits from that investment and that equity represented on the positive side of the balance sheet, but as we know, there is the loss side of the balance sheet which represents the sunk costs, the deprecia- tion, the amount where there will be very little rate of return on the equity because they have to pay out and the equipment will become less and less valuable over time. We see this time and time again with hospitals in this province. I mean, what is the average life of hospital buildings? It would be interesting to try to calculate that.

I think they can mostly be written down after about 15 years. Some are totally repl aced within 20, 25 years, yet that depreciation expense, that write-down, is never really calculated. I don't see what the complete inventory is of the value of those investments. Mr. Speaker, I just want to raise this again. I raised it last year and the year before. I think it shows sloppy accounting methods, poor stewardship of the resources, not b ecause we don't believe in Farming for the Future or we don't believe in health care or we don't believe in water management and irrigation districts.

All we believe in is having a proper evaluation of the worth of those investments in that asset. Now, there are methods, as I've said, that accountants use to be able to calculate this so that in the sense of an accrual accounting basis you can better plan.

This sort of cash-basis accounting from year to year – transactions in, transactions out – doesn't fairly represent the full economic financial power leverage of this government and its $12 billion worth of expenditures, let alone through the trust f und, so we'll be able to have a better accrual accounting, be able to have better understanding of both the book value and the market value of the investments, what are sunk costs, give us a better sense of how to plan, certainly how the bond raters throughout the world who look at our accounts take this into account.

They don't just look at what is represented by this Treasurer and by this government in terms of what they say are the assets of the province. They no doubt look at what the

June 24, 1992 Alberta Hansard 1615 Auditor General says about what are deemed assets. In fact, I quote from the Auditor General's report, Mr. Speaker, that says: The financial position of the Fund would be better understood if the deemed assets and deemed equity represented by deemed assets, which both amount to $3,197,338,000 were not included. And today we, the members of this Legislature who vote for this Bill, by this accounting method will be adding to this $3.2 billion which the Auditor says should not be included.

Whether it is misrepresenting the true value and worth of this investment of the assets, it's cer tainly not, as the Minister of Advanced Education said, a way of us misrepresenting the value and worth in a political sense of what these dollars represent. We want to know from an accounting sense what methods can be generally agreed to by accountants in the field so that we can know truly what the worth of these investments will end up being, which includes an accounting for the depreciation of these assets over time. MR. ACTING DEPUTY SPEAKER: Further speakers? Seeing none, the hon. Treasurer to conclude. HON.

MEMBERS: Question. [Motion carried; Bill 34 read a second time] Bill 36 Spending Control Act MR. JOHNSTON: Mr. Speaker, in moving second reading of the Spending Control Act, I'd point out again that this is a very important piece of legislation to ensure that those areas of program spending which are normally voted by the Legislative Assembly and for which normally ministers are accountable are controlled. In this Act the control is in fact the simple control of the amount of program expenditure that can take pl ace between 1992-93 and '94-95.

In fact, there's a decreasing function moving from 2 and a half percent down to 2 percent by quarters at an interval. Accordingly, this puts a tremendous focus on our program expenditures in the near term and I think will certainly complement the work that's already been done by this Legislature and this government to control the size of our expenditures. In fact, our expenditure record I think has been as well controlled as any government's. Certainly in comparison over the last five years our expenditures are below those of any other government.

Accordingly, this Bill will simply ensure and impose upon us the discipline necessary to control expenditures still further over the three-year period ahead. [Mr. Deputy Speaker in the Chair] The second aspect of this Bill, Mr. Speaker, which is probably more indirect than direct, is in fact a provision which is not stated so much, and that is that should there be a sharp increase in revenues, or any increase in revenue, for that matter, then of course that revenue will go right to the deficit because we already have imposed the spending control limits.

Therefore, any revenue increase would go right to reduce the deficit as opposed to being available for spending. That's an important signal, because we do intend to balance the budget over the near term. In doing so, we have to reduce the deficit, and one direct aspect that's within our control is in fact the program spending. The third point of this piece of legislation, Mr.

Speaker, I think responds to some of the suggestions from the opposition parties in that should we exceed the 2 and a half percent estimate of program expenditures, then we'll have to come back into the Legislative Assembly and ask via an appropriation Bill for additional dollars which normally would have been provided by special warrants by Executive Council. It will have to be voted by appropriations through the Legislative Assembly. We do have some flexibility; we do have an opportunity to move to the 2 and a half percent level.

If that 2 and a half percent level provides any opportunity for flexibility through special warrant spending, then of course we can proceed, but anything above the 2 and a half percent will have to be voted here in the Legislative Assem- bly by way of special warrants. The opposition parties, if they like, can block important expenditures on forest fires or any other emergency which normally is funded by a special warrant. They will have a say in whether or not that expenditure moves forward. Mr.

Speaker, that's an important step which confirms our view that legislative authority should be there should special warrants be required. In fact, I can assure you that given the very few dollars which we have remaining to pay for any special warrants expected, we will be back with an appropriation Bill this fall to do just that, to ask for more money. How much remains to be seen, and I'm hopeful that the stringent controls we have in place, including program review techniques and other discussions with our client base, will allow us to control the expenditures still further. 4:10 Mr.

Speaker, there is some discussion which could take place, I'm sure, on the technical nature of the Bill. There is a definition

section which is at the front of the legislation. I may leave those kinds of technical discussions to the committee study, but at this point I think this is an important piece of legislation for us. It was outlined in our budget. It confirms our view on expenditures of programs and the necessity to control what we can within our area. It allows for any increase in revenues to go directly to the bottom line, to the deficit reduction. It ensures accountability to the parliamentary process for special warrants.

Finally, still further, it sends a signal to other user groups that in fact we mean business about our control position, and that means that if you're looking into the '93-94 budget year, you'd have to expect that you'd see a reduction in our transfers likely, given the limits of our program spending.

How much is uncertain, but given the real rate of inflation, which is now before us, of 1.3 percent in the case of Alberta, in fact we're in a very new position with respect to expenditure control being afforded by the monetary policies and the inflation policies of the Bank of Canada, which have afforded us an opportunity to control still further our expenditures. Mr. Speaker, I would encourage all members of the Assembly to support this Bill in second reading.

It's unique to the provin- cial Legislatures, it's an important piece of legislation for Alberta, and it complements our already well-defined, well-understood fiscal policy, which is moving towards a balanced budget. SOME HON. MEMBERS: Question. MR. McEACHERN: Don't you just wish you could call the question without having any speeches on this Bill? This Bill just points out the hypocrisy of this government more than any Bill ever. I cannot believe the gall of this government. The idea of setting spending limits on yourself for a start is just childish.

I mean, what you're really saying to the population of Alberta is, “I can't be trusted to look after the expenditures of the province properly, so I'm going to pass legislation that says I'll have to,” and as long as you're in power, as long as you've got 58 or 59 seats out of 83, you can do whatever you please. So this Bill is just window dressing. It's a feeble attempt to hang on to

1616 Alberta Hansard June 24, 1992 the Reform Party vote in this province because they failed so miserably to balance the budget after six years. Every year they've promised a balanced budget just down the road. First it was in three or four years. It stayed three or four years a little too long. Then they had to bring it down a little bit, and in '89-90 they said it was in two years for sure. The next year, sure enough, the $2 billion deficit that was institutionalized by this time became a billion dollars even t hough, of course, it was just a fiction.

It turned out to be $1.8 billion when the Auditor General brought out his books, nearly double. Of course, the next year he had a balanced budget. Wonderful. Oh, the glory and the hallelujah among the Reform Party supporters of this government and the Conservatives saying, “Look, we did it.” They went off to the convention, and everybody was happy. “Oops,” he says next year, “I guess I was wrong,” and he admits to a $1.6 billion deficit.

At th is stage he gives up trying to balance the budget and says: oh, well, you know this recession that we've been denying for a year and a half really is still with us, so I guess we'd better stimulate the economy. So he comes out with the only honest budget he's ever brought out, this $2.3 billion borrowing power, except that of course he still hasn't done the job of accounting for those expenditures which he doesn't put in his budget. By the way, if you listened to his remarks a few minutes ago, he talked about the budget deficit part as if it was the only part he's in control of. That's sheer nonsense, Mr.

Speaker. The other 2 billion to 2 and a half billion dollars in expenditures that the Auditor General includes in the consolidated statements of the province is very much under the thumb of the Treasurer and in fact is even accounted for in the way the Treasurer tells the Auditor General he has to account for them. Sometimes they have quite a fight about deciding how to do that because the Auditor General has some integrity about how the people of Alberta should be presented with the books in Alberta, and the Treasurer of course wants to manipulate it to make it look as advantageous as possible to the government.

The Treasurer is in full control of all of the expenditures of this province except that sometimes things get out of hand and he has to go “Oops” again when NovAtel suddenly costs him another $400 million and some. Mr. Speaker, for this Treasurer to try to placate the Reform Party types in this province, those people who want to slash budgets everywhere – slash taxes, slash government involvement, slash education, slash health care – all those people are really upset with government over this expansionary or stimulative budget.

So in order to try to placate them, the Treasurer says: I know what we'll do; we'll promise to control spending this year, next year, and the year after; we'll hold it down to 2 and a half percent this year, 2 and a quarter percent next year, and 2 percent the year after. Well, if he was talking about the whole budget, maybe that wouldn't be all that bad an idea, although I think he needs to take a look at both the revenue and expenditure sides and the gap that is now institutionalized and try to make some more concrete plans. He keeps talking about his great fiscal plan, and of course there's been none.

He drew a graph back in '87-88 and said: we're going to balance the budget over four or five years. He drew a picture and said: this is what we're going to do. Of course, he didn't come anywhere near close to it. I remember when they were halfway through and were way off track and they were standing up and saying: we're really close, we're right on target; this year was a mistake, but next year we'll be right on target. That's been the picture. There was no plan. None at all.

What his plan is now is to hope to God that there's going to be a 6 percent growth every year for the next five or six years to help us get the deficit under control. This minister has no plans whatsoever. He just talks a good story and obfuscates the books to the point where it's very, very difficult to sort them out, but I've made it my life's ambition in the last six years and I've got him figured out. We have totally destroyed his credibility. Anything he stands up and says in this Assembly about the books of this province: nobody believes him anymore.

It took a lot of doing, but we've done it, and thank God, because now we can get on with some honest figures about what's going to go on in this province. The minister is, of course, applying this only to the general revenue account, the part that's passed in the Assembly under his budget. Like I said a few minutes ago, he was trying to claim that that's the only part he's in control of. Not true, Mr. Speaker. He's also in control of the Capital Fund, but that's not going to be under this legislation. He's also in control of the heritage trust fund, which we just passed a few minutes ago, some expenditures there.

He's in control of that too, but that's not going to be covered by this legislation. That isn't the end of it. There's a whole raft of other things that this Treasurer is in charge of, things that are set up in sort of an ongoing basis: spend tax dollars, and in some cases there are offsetting revenues and in some cases there aren't. I've already mentioned a couple of them. I guess we could add to that list the Capital Fund, the heritage fund. We could add the Lottery Fund.

The debt servicing costs aren't going to be under this restriction. “Valuation and similar adjustments and obligations of the Crown . . . under guarantees and indemnities” will not be under this restriction. Now, I like that one, the Crown guarantees. I mean, how about NovAtel for a guarantee? Wasn't that a great guarantee? Four hundred and thirty-five million more than the $131 million expenditures that they put into the 1990-91 budget. Now he's saying that most of the rest of the $566 million will go into last year's budget.

That's another $435 million that's got to be tagged on to his “oops” of a $1.6 billion deficit that was supposed to be a balanced budget. I'll bet that didn't include the $435 million. So there's the $2 billion that we 've said all along that it was going to be, but there are some other things there as well, because we weren't counting on that either. We didn't know that NovAtel was going to be such an incredible disaster. Actually, I think we could also add some loans and investments, unless they were specifically passed in the Treasurer's budget.

This government does a lot of loan guarantees outside the budgetary process, and often they turn those into equity invest- ments. Sometimes they're done in combinations with loans. Most of the loans I think are included in the budget, so they may be covered there, but you don't know quite what arrangements they'll make with a company once they're into financing a company or giving them guarantees, and we may end up some- times with investments which are not passed by this Assembly. 4:20 There are other special expenditures that are not voted under general supply.

I've listed a few of them: the Alberta Municipal Financing Corporation, any expenditures we might get out of that. Actually, they don't really affect anything much because it's sort of money in and money out, although there's an interesting little problem, and I want to stop for a minute. The present budget, the one that the Treasurer says is $2.3 billion and that he's going to hold to a 2 and a half percent increase for this year, does not include the $252 million of the Capital Fund and the $102 million of the heritage fund which we just moved along in a Bill a few minutes ago.

One of the other items that I've been saying had to be also added to that was the $300 million claim that the Treasurer was making from the Alberta Municipal Financing Corporation.

June 24, 1992 Alberta Hansard 1617 *see page 1546, right col., para. 3 Now, it turns out there's a bit of a problem there. I assumed that the Auditor General included the Alberta Municipal Financing Corporation in the consolidated statements of the province. I want to take a minute to explain this, because what I said in the House the other day ended up not quite correct, and there's a very interesting reason why. [interjection] Well, you'll see the explanation if you just bear with me for a minute.

If you were to turn to page 1.17 of the latest public accounts, you would find that the Treasurer lists the unmatured debt of the province for March 31, 1991, as $15.7 billion. Now, I have been fair in my analysis of the numbers for this province, so what I and the New Democrats have done is look at that list. It includes the General Revenue Fund, some $8.6 billion, the Alberta Municipal Financing Corporation, $3.9 billion, the farm credit stability program, $1.4 million, and so on and so on.

What I've always said is that the Treasurer is not responsible for the debts of the municipalities under the Alberta Municipal Financing Corporation. Therefore, we subtracted that nearly $4 billion from that, and we get $1 1.7 billion or $1 1.8 billion as the unmatured debt at that time. Now, that happens to be a billion higher than the Treasurer owned up to in his budget last year. That just makes me suspi- cious that his $12.1 billion in this year's budget is also a little light, that he's over $13 billion, heading for $14 billion. That's another justification for that statement I made the other day.

The problem with the $300 m illion is this. The Auditor General by including the Alberta Municipal Financing Corporation unmatured debt here led me to believe – and I didn't ask him about this specifically – that he included those figures in the assets and liabilities statement for the consolidated basis of the prov- ince's books back on page 1.4.

So I said that if you take those $300 million out of moneys that the Auditor General counts and put it into the part the Treasurer talks about, this $2.3 billion, you have to turn around and add it on again when you're talking about the consolidated picture, because clearly just moving it from one part to the other does not change the consolidated picture. However, I was talking to our researcher this morning, and he said that he asked the Auditor General and the Auditor General did not count the $300 million as part of the consolidated balance sheet.

Sure, it's over here on page 1.17 where he's talking about unmatured debt because the Alberta government guarantees that Alberta Municipal Financing Corporation debt, but he does not include it in the balance sheet, which I did not realize. So it's fair enough to leave, then, that $300 million off, but the reason the Auditor General didn't count it was because he believed that that $300 million belonged to the municipalities that use the Alberta Municipal Financing Corporation, not to the Treasurer.

But the Treasurer comes along and says, “Oh, no; I'm going to use the Financial Administration Act to assert my authority,” and took the money. So I apologize to the House for saying the other day that you could already add up the Treasurer's deficit to nearly $3 billion right now without some of these odd other things that the Auditor General is going to count.

Y ou see, I thought you just had to add to the $2.3 billion the $252 million from the Capital Fund, the $102 million from the heritage fund, and this $300 million, and you would be at $3 billion approximately, but now I will back off the $300 million.* Now, with NovAtel having gone under, if he puts the $435 million that's he admitted to into last year's, that portion of the $566 million beyond the $131 million that they put it into the year before, there will be more NovAtel stuff. So take heart every- body.

That $300 million will get made up in a whole range of odd things of other guarantees and indemnities of one kind or another, some of which, by the way, the Treasurer has already pushed back into previous years. Y ou'll see that one of the reasons that the Treasurer had to ask for $4 billion in borrowing power is because he's got a lot of things to put money out on, some of these indemnities and guarantees which the books have already accounted in previous years.

Y ou know, he adjusted the books for the last five or six years and dumped a lot of the present expenditures into previous years, going as far back as 1985-86. Totally ridiculous of course. I'll get back to that point and give some new numbers in the debate on Bill 37. I've listed some of the things. I had to stop and explain that about the Alberta Municipal Financing Corporation, but there are others. There are the health insurance costs, partly covered by premiums. The premiums come in and cover part of the health insurance costs.

That inflates the expenditures, and it inflates the revenues, and so the figures that the Treasurer puts into his normal budget are not all of the figures. Utility rebates is another one. The school foundation program inflates the numbers again. Hail and crop insurance inflates the numbers.

The farm credit stability program administration costs, the small business term assistance plan administration costs, the Alberta heritage trust fund medical research foundation, and so on: there's a number of things that inflate the Auditor General's consolidated picture compared to the Treasurer's narrow budget that he likes to talk about, and those are the only figures he likes to talk a bout. He tried to tell us a minute ago that all the ones that he's in charge of are the ones that we're going to be controlling the spending on. The fact of the matter is he's in control of the whole ball of wax.

Everything that the Auditor General accounts for, the Treasurer has his finger in the pie, is the controlling person. He's supposed to be the controlling person. If he's not, that means he isn't able to take his caucus with him. Now, the Treasurer likes to brag that he actually has done a pretty good job. In his budget book he said that over the last several years the increase in program expenditures, which is the one he's trying to control, has been 2.3 percent only. Well, if it's been that darned good, why do you have to pass a law to keep it at that level? The fact of the matter is, Mr.

Speaker, that if we look at the consolidated picture, which the Treasurer is supposed to be in control of, and turn to page 1 14 – I've said this a lot of times in this House this session, and I wonder how many people have bothered. I guess nobody over there really wants to make the Treasurer out that he doesn't really tell all the truth all the time. If you look at page 1 14 of the Auditor General's last annual statement, taking us to March 31, 1991, he lists the figures for the last three years for expenditures. In 1988-89 the expenditures were $13.2 billion; in '89-90, $14.2 billion; in '90-91, $15.2 billion.

That's an increase of 7 and a half percent in the second year over the first figure and 7 percent the third figure over the second. That's the consolidated picture; that's the whole ball of wax. So where does he get off telling the people of Alberta we've kept program expenditures to 2.3 percent? It's just sheer nonsense. He just takes some of the numbers, and what he counts into it is his projections of what he hoped to do last year and what he hoped to do this year. Last year you'll remember he said he had a balanced budget when he didn't have one.

That's where those numbers come from, from what happened on the general revenue side only, not on a consolidated basis. Then in the last couple of years he was just using his forecasts and his projections of what

1618 Alberta Hansard June 24, 1992 he hoped to do. So he gets this figure 2.3 and bandies it around the world and stands up and says: we're the best in all the provinces in Canada. Based on what kind of analysis? Partial analysis, selective figures, guesswork on a couple of the numbers that he must have used. I did the figures on a consolidated basis from '85-86 to '90-91, which are the only hard numbers we have, and the increase in expenditures was 4 and a half to 5 percent a year right through the whole period.

It was a $2.6 billion increase in expenditures over the five-year period on a base of, I believe, $12.6 billion. On a consolidated basis that's the only possible reasonable figure to use to explain what's going on in the province. To use any of the other numbers, one should admit when you're using them that they have limited applications. Y et the Treasurer doesn't do that; he isolates these specific numbers, makes them sound good, and then pretends that's the whole picture. In the balanced budget book he brought in last year, in his forecast he quoted the year before as being a $1 billion deficit year.

He quoted that figure, and it was quoted all over the papers and passed around the world as if it were the final figure. Those of us who know the game know he was just talking about his expenditures here in the General Revenue Fund and the general expenditures of the province. We knew that the consolidated picture would be close to $2 billion. Sure enough, it tu rns out to be $1.8 billion. But we don't hear a bout that un til a year later when the Auditor General brings out the books and proves that to be the case. 4:30 Mr.

Speaker, over several years in this discrepancy between the figures the Treasurer likes to talk about in this budget and the consolidated picture, the differences have varied from $2.2 billion to $2.5 billion. In 1990-91 the Treasurer said his expenditures would be $13 billion, but the consolidated picture was $15.2 billion. To pick a couple of other years at random: in 1989-90, $12 billion was what the Treasurer said he was going to spend; the consolidated figure was $14.2 billion. If you go back to '87- 88, the Treasurer claimed expenditures of $10.4 billion, but the consolidated figure was $12.7 billion.

So the fact is the Treasurer doesn't account for all the books in his province in a straightforward way and give us a consolidated picture as to just what's happening, and he should. The deficit, of course, is related to how big a discrepancy there is there. As well as the expenditures being 2 to 2 and a half billion dollars higher than what the Treasurer talks about in his budget each year, the revenues are aro und 1 and a half billion dollars higher. The difference depends on just how much the Treasurer decides to kid us about what the books would actually show.

It was rather interesting following through the last six years in terms of deficits, and this was before the Auditor General decided to adjust them, which I still think is a more reasonable way to look at things, but I'll leave that debate for another Bill. The first year, the year of the really big collapse in the price of oil in this province, 1985-86, there was a balanced budget because it sort of came at the end of that year. It was really the next year that got nailed, that $4 billion deficit we had on a consolidated basis in 1986-87.

The difference between the figures the Treasurer was putting forward as the deficit for the province and the consolidated deficit shaken out at the end of a year or two, when the Auditor General got his hands on the books and got the actual number sorted out, was $600 million. The Treasurer at that stage used to do a combined deficit, he called it, of the expenditures of the general revenue account and the revenues and the heritage trust fund expenditures. He called this a combined figure and said it would be $3.44 billion in his forecast.

The year before he said it was only going to be 2 and a half billion dollars, but in any case when he got to the forecast point, he said it would be $3.44 billion, or should I say that's what it was when you added the heritage fund and the General Revenue Fund together. The consolidated figure was $4 billion, so there's a $600 million gap there. That gap narrowed down over the next few years to $400 million, $200 million, and one year, the year he took $250 million in lottery money, they were actually almost equal; the deficit was almost equal on both sides.

But would you believe that in the last public accounts we have, '90-91, that gap is up to $600 million again? I guess that would count the $131 million if the Treasurer had got around to including it before those books were published for NovAtel. In any case, what that indicates to me is that the Treasurer is being more and more sloppy about making sure some things are hidden as long as possible.

That leaves it up to the Auditor General to come along at the end and account for what's happening and put it together so we get a final figure as to just what the expenditures were, just what the revenues were, and how big the deficit is. I guess what I'm really saying is that you can't trust the Treasurer's figures. They're only partial figures. He's changed the accounting processes and procedures several times. There's one that he never explained. That was on his '90-91 budget figures when he was claiming that his budget deficit would only be $780 million.

In that year he had a net cash requirement of some $1.76 billion. I sort of asked him a lot of questions about why and how that worked. He never did explain it. When we got around to getting the Auditor General's report on it, we saw that the consolidated deficit was $1.8 billion. Even though he changed back some of the accounting procedures to what he had originally forecast, nonetheless the deficit still ended up as big as I said it would be but with no explanation from the Treasurer as to why those numbers were what they were. I'm afraid, Mr.

Speaker, that's traditional for this Treasurer: tell as little as possible, and what you do tell, make it sound as good as possible so it looks like the government's in control and knows what it's doing. In fact, after six or seven years we've totally destroyed this Treasurer's believability in this province in terms of the account- ing for the books, and this Bill puts the final and finishing touches on it. To have the gall to bring this Bill in alongside a $4 billion increase in borrowing power Bill, Bill 37, is absolutely incredible.

How can anybody claim they're in control of the finances of this province and say they know what they're doing and how they're going to control expenditures when he's had to increase his borrowing power from $2 billion a year consistently over the last several years to a $4 billion increase, an increase from 13 and a half billion dollars to 17 and a half billion dollars in Bill 37? Right alongside it he says, “Here's this Bill that's going to make sure we control our expenditures.” Mr. Speaker, nobody believes him, least of all those of us on this side. The whole population of Alberta doesn't believe him.

When is the next NovAtel coming along, for one thing? Mr. Speaker, I don't really see much point in voting for or against this Bill. The government will obviously push it through, but it is so hypocritical it's laughable. The other day when the Treasurer got up and tried to make a speech on first reading, when he's not supposed to make a sp eech, I might point out – he's supposed to introduce the Bill in two short, sharp sentences like all the rest of us do – it's no wonder that when he made that speech the laughter was so derisive he had to sit down and keep quiet for a while. It served him right.

Then the gall for him to say we were being rude. I mean, how can anybody bring in a Bill to borrow $4 billion extra and at the same time bring in a control-

June 24, 1992 Alberta Hansard 1619 the-spending Bill? This guy is totally out of control. The only way we're going to get control of him is to get this government out of office and get a New Democrat government in office to look after the books properly. [interjections] I will quote you Saskatchewan. In Saskatchewan the Blakeney New Democrat government ran 1 1 balanced budgets in a row and left a $2 billion surplus in 1982. In nine years the Devine Conservative government had nine deficits and left government with a $13.9 billion deficit.

We are the party of fiscal control, not the Conservatives, not the Liberals, and we will show that to be true to the people of Alberta when we get our chance. MR. DEPUTY SPEAKER: The hon. Member for Edmonton- Meadowlark. MR. MITCHELL: The operative question, Mr. Speaker, is: when would they ever get their chance? Having asked that question, I think there are some comments this Bill requires. It is interesting, Mr. Speaker, that it is very, very difficult to find what could be the legitimate reason in this Treasurer's mind for bringing in this Bill.

The Treasurer, for example, has told us over and over and over again that he has limited program spending to 2.3 percent per year since 1985-86. So if spending is the problem and he's already limited it to 2.3 percent per year, why is he putting a cap in the first year at 2.5 percent? I mean, this isn't even as good as what he claims his limit to this point has been. This wouldn't be an improvement even in his own context, using his own figures.

This wouldn't be an improvement in his limit; this would be an increase in the limit of expenditure. 4:40 He defines the problem, he continually tells us that he has in fact limited expenditure, and then he turns around and tries to take credit for introducing an expenditure control Bill. Well, it makes no sense, Mr. Speaker. In fact, he says the problem with his deficits hasn't been expenditure control; it has been revenue shock. Then why doesn't he bring in a Bill that recognizes the revenue reality?

The fact is that you can't just control expenditure in isolation; you have to consider expenditure in the context of your revenues. This Treasurer has given us no logical argument, no understanding of why he is bringing in this Bill in the face of the contradiction to the various arguments he has made in defence of his own budget. He says he's controlled spending to 2.3 percent; he puts a 2.5 percent cap on expenditure. He says spending, however, isn't really the problem, and then he brings in an expenditure control Bill.

He says revenue shock is the problem, but he doesn't bring in a Bill that reflects a revenue reality. Mr. Speaker, left with that analysis and that logic, one can only conclude that the Treasurer's Bill is nothing more than public relations. He is trying to communicate a message to Albertans that somehow he has become the Treasurer of tough-minded expenditure control measures when in fact his record indicates that isn't the case. His record indicates that to the extent he can claim any control at all, it is only over a very limited and selective feature of his areas of responsibility. [Mr.

Speaker in the Chair] There are some substantive problems with this Bill, Mr. Speaker. In fact, it doesn't really constitute a limit at all. I admit that this is a process problem. He says he's going to limit expenditure, but he can turn around and increase expenditure through special warrants. He, of course, puts no limits on special warrants, so in effect de facto there is no true limit on expenditure. The second and very critical feature of this Bill is that it excludes areas of expenditure which are his responsibility over which he does not impose a cap.

He doesn't include in this cap increases in interest carrying costs. He doesn't include in his cap the Capital Fund. It isn't inconceivable, Mr. Speaker, that the Treasurer could take all capital expenditure out of the General Revenue Fund, out of what he calls program funding – for example, the capital expenditure th at exists that's put into the transportation department now – and put it into the Capital Fund and increase the Capital Fund as much as he wants because he's excluded the Capital Fund and expenditures under that fund from this so-called expenditure cap. Of course, he also excludes guarantees.

He says: I'm not going to put that into the 2 and a half percent cap. Well, it may be that that would create huge problems for him. Certainly we've seen that a $500 million sudden shock to a given year's budget, as in the NovAtel case, or a $250 million shock would certainly skew and cause difficulty. At the same time, Mr. Speaker, what this Bill means, I would think, is that he could relate excess expenditure over and above the 2 and a half percent cap to a shock like NovAtel and then not have to bring in a special warrant to the Legislature for prior approval to pick up that expenditure.

So it gives him a way of getting around bringing special warrants to the Legislature if he wants to define the reason for the special warrant as not being something that falls under his expenditure cap. In effect, that's a particularly distressing problem, because if there is any advantage in this Bill at all – and they are limited – it is that the Legislature would have to approve special warrants before rather than after their implementation.

But he has a weasel; he has a way of getting around that by relating the need for a special warrant to some unforeseen expenditure increase that doesn't fall within his definition of program expenditure. We could have, for example, in a budget that came in, a 2 and a half percent increase in program expenditure. We could have another failure of the magnitude of NovAtel costing $500 million.

He could then go out and say: “Well, now my budget's gone up 5 extra percent, but I don't have to bring a special warrant to the Legislature to raise that $500 million in the fall because that expenditure increase didn't fall within my cap. I can spend another $500 million, find that $500 million from somewhere and just do an after-the-fact special warrant report as is now the case.” So that one slim advantage, that we would get prior approval, can be skirted.

The Treasurer shakes his head and I want to believe him, of course, but knowing how these things occur, one day we don't have a Capital Fund and the next day we do. All of a sudden, one day we take responsibility for capital expenditures; the next day we don't have to. We don't have to consolidate Capital Fund debt; we just created this new fund. I mean, all of a sudden there are ways to manipulate it. That's one way it could be manipulated. The other very, very subtle but I think very significant feature of this Bill is what it does to the Legislature's authority through the voting structure.

The time-honoured tradition in this Legisla- ture has been that when the Legislature votes on vote 1 or vote 2 or vote 3 of a given department's budget, that department, the cabinet, that government cannot move money from one vote area to another vote area because they have always honoured the authority of the Legislature. Now that is going to be changed.

What this Bill does – and I hope all these guys over here under- stand that, because this is a very, very significant change – is say that a minister can find excess money in one vote, transfer it to another vote where they need more money, and does not have to seek approval through a special warrant. More to the point and equally significant, they don't even have to report it. There

1620 Alberta Hansard June 24, 1992 doesn't have to be an order in council. There doesn't have to be a special warrant. There doesn't have to be any public acknowl- edgement that that has occurred. What has happened to this point, Mr. Speaker – at least this – is that if there was excess money in one vote, vote 1, and the government had, say, $10 million they couldn't spend and they needed $10 million in vote 2, they couldn't just transfer it surreptitiously.

What they had to do was at least authorize a special warrant, announce that special warrant through orders in council, reporting publicly, and then bring it, albeit after the fact, to the Legislature and say, “We had to authorize $10 million for that new expenditure.” Now they won't have to do that. Now the Treasurer will be able to sit down with some of his cronies some night in some smoky room, that cigar sticking out of the side of his mouth, and say: “We need a little extra money. Where can we find it? Vote 1. Hey, le