June 17, 1986 ALBERTA HANSARD 51 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Tuesday, June 17, 1986 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: INTRODUCTION OF BILLS Bill 229

An Act to Amend the Labour Relations Act MR. STRONG: Mr. Speaker, I beg leave to introduce Bill 229,

An Act to Amend the Labour Relations Act. The Bill would restore the legitimacy of so-called bridging clauses in existing collective agreements, clauses which both the courts and the Labour Relations Board have ruled to be void of effect once a collective agreement has expired.

Further, this Bill would provide that during a strike or lockout no employer may alter terms and conditions of employment or hire employees on different terms and con­ ditions of employment without first reaching agreement with the striking or locked-out employees' bargaining agent as to the altered terms and/or conditions. [Leave granted; Bill 229 read a first time] Bill 212 Ambulance Service Act DR. BUCK: Mr. Speaker, I wish to beg leave to introduce Bill 212, the Ambulance Service Act. The purpose of this Bill is to establish a uniform and high-standard ambulance service throughout Alberta. Mr.

Speaker, I first presented this in the early '70s. With any kind of luck the government will take action one of these years. [Leave granted; Bill 212 read a first time] Bill 216

An Act to Amend the Municipal Government Act MR. SCHUMACHER: Mr. Speaker, I beg leave to introduce Bill 216. The principle of this Bill is to amend

section 119 of the Municipal Government Act regarding plebiscites. No pleb­ iscite pursuant to this

section would be valid unless the number of votes cast in the plebiscite were greater than 66.67 percent of the total votes cast in the preceding election. [Leave granted; Bill 216 read a first time] Bill 232 Criminal Compensation Intercept Act MR. R. SPEAKER: Mr. Speaker, I wish to introduce a Bill, being the Criminal Compensation Intercept Act. This Bill allows the government to intercept various grants and subsidies that may be sent to someone who has created a criminal act and that the moneys can be given to the victim of that respective crime. [Leave granted; Bill 232 read a first time] Bill 217

An Act to Amend the Landlord and Tenant Act MR. GOGO: Mr. Speaker, I beg leave to introduce Bill 217,

An Act to Amend the Landlord and Tenant Act. It concerns the matter of security deposits. The principle of the Bill: where a landlord fails to repay the security deposit, the tenant may take action against either the landlord, the owners, or any directors of the company that own such a building. [Leave granted; Bill 217 read a first time] Bill 213

An Act to Amend the Guarantees Acknowledgment Act MR. NELSON: Mr. Speaker, I request leave to introduce a Bill, being

An Act to Amend the Guarantees Acknowl­ edgment Act. The amendment requires that before signing a personal guarantee for a bank loan, an unsophisticated investor must take it to an independent lawyer, who will make sure they understand the guarantee, their obligation under it, and sign a certificate to that effect. [Leave granted; Bill 213 read a first time] Bill 218 Alberta Palliative Care Foundation Act MRS. KOPER: Mr. Speaker, I beg leave to introduce Bill 218, the Alberta Palliative Care Foundation Act.

The purpose of this Bill is to initiate a foundation that can solicit and receive by gifts, bequests, or a transfer of property and advance public awareness and understanding of palliative care. [Leave granted; Bill 218 read a first time] Bill 211 Seat Belt Act DR. CASSIN: Mr. Speaker, I beg leave to introduce Bill 211, which pertains to the introduction of mandatory seat- belt legislation in this province. [Leave granted; Bill 211 read a first time] Bill 221 Motor Dealer Act MR. HYLAND: Mr. Speaker, I beg leave to introduce Bill 221, the Motor Dealer Act.

The purpose of this Act is to put the regulations dealing with motor vehicles under one Act. It is modelled on Bills from other provinces. Also, many of the things suggested in this Act are done by motor vehicle dealers as good business practices, but some need reinforcing.

52 ALBERTA HANSARD June 17, 1986 [Leave granted; Bill 221 read a first time] Bill 204 Plain English Law Act MR. JONSON: Mr. Speaker, I request leave to introduce two Bills, the first being Bill 204, the Plain English Law Act. This Bill would put in place a review procedure designed to ensure provincial legislation is in direct, plain, and understandable English. MR. SPEAKER: I'm sure all members will be very attentive to the Bill. [Leave granted; Bill 204 read a first time] Bill 235

An Act to Amend the Landlord and Tenant Act (No. 2) MR. JONSON: Mr. Speaker, I request leave to introduce Bill 235, being

An Act to Amend the Landlord and Tenant Act. This Bill would change the Act in order that a business in a landlord/tenant relationship would be allowed to be closed one day a week. [Leave granted; Bill 235 read a first time] Bill 6 Appropriation (Interim Supply) Act, 1986 MR. JOHNSTON: Mr. Speaker, I request leave to introduce Bill 6, the Appropriation (Interim Supply) Act, 1986. This being a money Bill, Her Honour the Honourable Lieutenant Governor, having been informed of the contents of this Bill, recommends the same to the Assembly. Mr.

Speaker, this Bill for just over $5.7 billion includes the amount of $4 billion which, by way of special warrant, allowed the government to operate until the full appropriation Act has been dealt with. The Act itself, of course, will allow the operation of the government until estimates are fully considered by this Assembly. [Leave granted; Bill 6 read a first time] head: TABLING RETURNS AND REPORTS MR. KOWALSKI: Mr. Speaker, I wish to table a response to Question 133. MR. HORSMAN: Mr.

Speaker, I wish to file with the Assembly copies of the four communiques issued by the Western Premiers' Conference 1986 held in Swan River, Manitoba, and a document entitled beyond Alberta's Borders: the Trade Challenge. Copies, I think, have already been made available to all members of the Assembly. head: INTRODUCTION OF SPECIAL GUESTS DR. WEST: Mr. Speaker, it is a pleasure to introduce to you, and through you to the members of this Assembly, 42 grade 6 students from the Viking school in my con­ stituency of Vermilion-Viking.

I can say today, because it is the first time I've ever introduced visitors to this Assembly, that this is the best looking group of visitors I have ever introduced to this Assembly. They are accompanied by their teachers Dan Kardash and Barb Fandrik; parents Doris Marko, Phyllis Lefsrud, Barb Morken; and their bus drivers Sandra Zohorodniuk and Terry Sorenson. They are seated in the members' gallery, and I would like them to stand now and receive the warm welcome of this Assembly. MR. CRAWFORD: Mr.

Speaker, I take great pleasure in introducing 35 grades 5 and 6 students from Grandview Heights school in Edmonton Parkallen. I would just say to them that being school children, they would know one of the things that we know here; that is, you can be very busy even while seated in class or in the Assembly, because I don't know when I've heard more Bills introduced than today. The students have had a tour, and they are accom­ panied by Louise de Bruijne, the teacher, and by parents Mrs. Pearson, Mrs. Kraychy, and Mrs. Hindmarch. I would ask them to rise and receive the welcome of the members. MR. YOUNIE: Mr.

Speaker, it is my pleasure to introduce to you, and through you to this Assembly, a group of 50 delightful students from the Glengarry elementary school, one of whom mistakenly gave me an honour by asking me if I was in fact the Premier of the province, to which I was forced to answer no. I would also like to welcome June McIvor and Joan Shapka, their teachers. I would like them to rise and accept the very warm welcome of the members of the Assembly. head: MINISTERIAL STATEMENTS Office of the Premier MR. GETTY: Mr.

Speaker, Albertans have recently been saddened by the tragic loss of our fellow citizens in air accidents in the Kananaskis region of Alberta. The sympathy of the government is extended to the families and friends of the victims. The government also recognizes the efforts of all those persons who have been involved in the search and rescue attempts, and our sincere thanks is expressed to them. It is our understanding that as of last evening the air search was discontinued and as of this evening the ground search will be terminated.

Notwithstanding these search efforts there still remain two persons unaccounted for. We believe that further ground search efforts are warranted for a period of time. Accordingly, I have asked the minister responsible for Alberta Public Safety Services to make arrangements for the ground search to continue, and I have asked him today to give further details of those arrangements. Public Safety Services MR. KOWALSKI: Mr.

Speaker, I wish to inform the House that the government of Alberta has made a further request of the Department of National Defence to continue an intensive ground search for an aircraft missing west of Calgary since June 6, 1986. On June 12, 1986, I requested that a ground search party of approximately 100 persons be made available for 72 hours to assist the search and rescue operation for the missing light aircraft with two persons aboard in the Kananaskis area of Alberta. At midday today a further request was made, and I'm pleased to advise

June 17, 1986 ALBERTA HANSARD 53 that the federal Minister of National Defence, Mr. Andre, has agreed to assist. The air search and rescue efforts of the Department of National Defence and the Civil Air Rescue Emergency Services have covered every primary search area several times without sighting the aircraft. These resources will remain on call to the ground search forces should they be requested or required. The ground search forces are doing a detailed search of the entire area where the aircraft is believed to have gone missing.

Kananaskis Country personnel and approximately 120 Department of National Defence personnel from the Princess Patricia's Canadian light infantry at Calgary have been involved in the search. The request made today by the Alberta government to the Department of National Defence is to extend the original request made on June 12 for ground search personnel until the primary search area has been thoroughly covered and every reasonable effort has been made to locate the missing aircraft and its crew.

An additional 30 people from the Alberta Forestry, Lands and Wildlife department will aug­ ment the search effort, and volunteer groups are being organized to assist, if required, under the overall direction of the ground search co-ordinator, Mr. Lloyd Gallagher, public safety co-ordinator, Kananaskis Country. MR. MARTIN: Mr.

Speaker, to reply to the ministerial announcements by the Premier and the minister, I would like to compliment them both on the step they've taken today, because I'm sure they're aware that we as the Official Opposition had been approached by representatives of the family to perhaps raise this matter. I think we can all appreciate the anxiety experienced by the family. I imagine in a situation like this, where you just don't know, it's unbearable. I appreciate that the ground search is going to go on, as I understand it, in the primary search areas until every reasonable effort has been made.

Again, I compliment the government. I think it is the right decision under the circumstances. I would say in conclusion, Mr. Speaker, that in view of the fact that there does not seem to be — and it probably puts the government in some dismay not knowing what to do — any clear-cut policy of the provincial role in disasters like this, perhaps the minister could take under advisement that an independent review of the process might be in order. But I lay that as an example of something that could be done.

In conclusion, I appreciate the good work done by both gentlemen in this case. head: ORAL QUESTION PERIOD Natural Resource Revenues MR. MARTIN: Mr. Speaker, enough compliments for the day. I'd like to turn my attention to the Provincial Treasurer, in regard to the budget. Both in the budget speech delivered by Mr. Hyndman in April and in last night's address of the Treasurer, the government has claimed that it is not possible to accurately estimate energy revenues for next year. I think the term is that oil price is a moving target.

Nonetheless the government is sticking to an estimate of one-third reduction in nonrenewable resource revenue. The question to the minister: could the minister indicate how this estimate came about? Did the minister flip a coin and decide that this was a good estimate and he'd throw it out to the Assembly? MR. JOHNSTON: Mr. Speaker, of course the government in preparing or recommending a budget to the Assembly gives ample and careful consideration to the numbers and the estimates which are therein reflected.

On the revenue side there were some difficulties in arriving at an estimate as to what the revenue would be, given the current uncer­ tainty in oil pricing. In particular in the April 10 budget the trend was down, as you are probably well aware, and in terms of this budget there was a trend upwards in terms of world oil pricing. In the case of the revenue assumptions, Mr. Speaker, you should note that the budget now, toward the middle of June, is approximately two months into its fiscal period.

What this budget does reflect is confidence in the fact that prices will firm toward the end of 1986 and early 1987, that the royalty assessments and cash flow will in fact take place as demand starts to pick up toward the winter months. Right now all world consuming countries have low inven­ tories of energy and will be building up reserves through the latter part of 1986, and of course the winter months will engender their own demand as the demand for energy starts to prompt more usage of liquid hydrocarbons.

Certainly those from Canada who will be exporting into the United States will strengthen and firm both the price and the market opportunities. MR. MARTIN: A supplementary question, Mr. Speaker. The Treasurer's estimates seem somewhat contradictory to other forecasters. I notice that the C. D. Howe institute projected several years of depressed commodity prices. My question is to the minister, flowing along from his logic. I understand that he says that there will not be a deficit; it should basically be paid off by 1990.

In view of most forecasters how would the minister come to that conclusion, that there will be no deficit by 1990? MR. JOHNSTON: Mr. Speaker, what I indicated in terms of the deficit was that it's my feeling and view that increased royalty revenue to the province of Alberta will more than offset this year's deficit by 1990. That's a clear assessment.

Obviously, we're forecasting to some extent, but I think that's a reasonable position to take, in light of the experience which this government has seen in terms of its 1982 fiscal plan, where in fact a $2 billion deficit was suggested, and that has now been fully recovered. The position of the government at April 1, 1986, is that we have a $900 million surplus, even though over the past three years we have in fact budgeted for deficits. It shows the cyclical nature of the cash flow.

I have every confidence in the fact that our revenue projections through to this period will be confirmed as we move closer to March 31, 1987. [some applause] MR. MARTIN: If I may say so, Mr. Speaker, because the minister says so and the backbenchers pound their desks does not necessarily make it come about. My question to the minister: in view of the fact that most forecasters are predicting low commodity prices, what other information does the government have that would lead them to go to forecasters like the C. D. Howe institute, for example? MR. JOHNSTON: Mr. Speaker, the hon.

Leader of the Opposition has not given us much more to judge from, giving only his own view and the C. D. Howe estimates. I don't know if that adds much more to the argument than he has presented, except to say that the frailty in the

54 ALBERTA HANSARD June 17, 1986 question of pricing and judgment of pricing has gone in many directions, from the high prices of the 1979 period through to the scenarios we now see. It is a safe assessment, given the action of the commodity market, given our assess­ ment of demand, and given our assessment of supply, both in terms of OPEC and non-OPEC producers, that demand will increase through the end of 1986 for the reasons I have suggested. That can only stimulate price increases, which we are confident will take place and which we are confident will reinforce our budget estimates. MR.

MARTIN: A supplementary question. I would remind the minister that the figures he projected in the budget have actually gone down in the last few months. He's well aware of that. In view of that, so we can have an intelligent budget debate — we have not again had the various elements of the resource revenue category brought in in the budget. Would the minister be prepared to give his figures, how he came to the suggestion we have in this Legislature about this budget? Would he be prepared to table the departmental projections upon which the revenue estimates are based?

Would he do that in this Legislature so we can have an intelligent debate about this particular problem? MR. JOHNSTON: First of all, Mr. Speaker, the hon. leader makes a statement with respect to the new state of revenue forecast. Obviously, the reduction in revenues, which are now reflected in this statement, revealed the new incentives which this government has brought forward to stimulate activity in the oil and gas sector. Never before has the government responded to assist the sector, and we will continue with that commitment to ease it through this period.

With that kind of commitment we are sure new investment will flow, which will match the demand situation we see. Secondly, with respect to the detailed analysis, Mr. Speaker, I can simply say that we are sticking with our position. It will be a one-third assessment. It is as good a guess as any with respect to a number of variables which are factored into the price prediction. That is what we'll have to deal with in terms of the debate in this House. MR. TAYLOR: Mr. Speaker, to the minister.

While com­ plimenting his wild if unreasonable optimism, I wonder if he could tell us how much the price of a barrel of oil in Alberta will have to rise to equal the $2.5 billion he has to recover in his deficit. How much will Alberta oil have to rise to, to equal that amount or generate that $2.5 billion that he says we are short in the deficit? MR. JOHNSTON: Mr. Speaker, the hon. member is trying to get me into another guessing game on a different plane. It should be noted that part of the revenue flow to the province of Alberta is based on a number of assumptions, not just the price assumption.

The other assumptions, of course, must include the volumes. I would hope he speaks for the industry, as we are saying that we're encouraging expanded volumes in natural gas sales, for example, into the United States: always an objective of this government. We think that should happen and will happen over the decade. We're looking as well, in terms of other demand, at synthetic production. This government has made a clear commitment, with the initiatives for Syncrude and for Sun­ cor, to increase the expansion of synthetic production in this province, and we will continue with that commitment.

That will allow us to have energy self-sufficiency, which will meet the increased demand. Finally, Mr. Speaker, the royalty side is always subject to change. We know that as the prices increase, obviously, royalties increase. [interjections] MR. SPEAKER: Order please. MR. JOHNSTON: Those, Mr. Speaker, are three of the elements which the member asked for. I'm attempting to respond to his question. He may not agree with the analysis, but in fact, that is as close to the presentation as you're going to get. MR. R. SPEAKER: Mr. Speaker, a supplementary question to the Provincial Treasurer.

How does the Provincial Treas­ urer rationalize the fact of the increased production and also stability of revenue from the oil and gas industry when projections this summer in the industry in Calgary of unemployment range up to 20 percent? MR. JOHNSTON: Of course, Mr. Speaker, the budget document also indicates the uncertain period we are now in moving through to the summer. Every statement we have made deals with the balance of the year, starting in the fall of 1986 through the early months of 1987.

As we've indicated, if there's any indication of firming of the price — which we think will take place toward the end of 1986 — there will be a quick response by that industry. It's ready to invest; it knows it has an opportunity. As the Budget Address says, the finding costs and opportunities in Alberta are greater than anywhere else in North America. MR. MARTIN: For those of you who haven't been in the Legislature, it sounds like we have a microphone. I've heard it all before, Mr. Speaker. MR. MARTIN: For those of you who haven't been in the Legislature, it sounds like we have a microphone.

I've heard it all before, Mr. Speaker. Gainers' Workers' Pensions MR. MARTIN: The next question is to the Minister of Labour, if I may, Mr. Speaker. It concerns the frankly appalling news that Gainers Inc. is cancelling its pension plan. Has the minister asked his officials for any information on whether or not this would be possible, given legislation that protected bridging clauses and stopped the 24-hour lockout game? DR. REID: Mr. Speaker, this matter first came to my attention at about 1:30, I think, on Friday afternoon. I very promptly transmitted the information to the disputes inquiry board, to Mr.

Dubensky, as I felt that since benefits were one of the items under dispute, he should have the infor­ mation. He got it either on Friday or first thing on Monday morning. MR. MARTIN: Well, excellent work. Let the disputes inquiry . . . My question simply is this: has the minister reviewed the labour laws to see if it would stop this sort of move by Gainers if the bridging concept were brought back? DR. REID: Mr. Speaker, the matter is that any private pension can be closed down at a given time. There are

June 17, 1986 ALBERTA HANSARD 55 regulations and there are laws to cover that process. Those regulations and those laws will be followed in this instance. MR. MARTIN: Mr. Speaker, a supplementary question. Obviously, the minister hasn't looked into it. He talked about the disputes inquiry. Could he indicate that he let the mediator know? Could the minister indicate to this Assembly if this latest unjust news is in any way harming the disputes inquiry process, as the UFCW has indicated? DR. REID: I'm unaware of that fact; I haven't had any communication from Mr. Dubensky along those lines. MR.

MARTIN: Supplementary question, Mr. Speaker. If it was proven to the minister's satisfaction that the bridging was causing the problem of this pension, could we get a commitment from this government to move in this session and bring about a change in the bridging part of it and follow the private member's Bill that was just advanced today? DR. REID: Mr. Speaker, my understanding is that the termination is dated for May 31 of this year, which was prior to the strike starting or the lockout. Energy Industry MR. TAYLOR: The question, Mr. Speaker, is to the hon. Premier.

As he is aware, we have subsidized Ontario and Quebec when oil prices were high, to the tune of $40 billion or $50 billion — in excess of $50 billion exactly. In light of the recent decline of oil prices, in spite of the rather happy dreams of our Treasurer, will the Premier ask the Prime Minister to renegotiate the terms for the western accord, which would see eastern Canada paying back just a little bit of to what they owe us? MR. GETTY: Mr.

Speaker, I think it is appropriate for the government of Alberta to raise with the federal government and with all eastern Canadians whom Alberta helped so much during the high price of energy, to participate in programs that would assist Alberta's and other western provinces' energy sector, and we will be doing that. MR. TAYLOR: Mr. Speaker, when will the Premier be meeting with the Prime Minister to formulate a new energy accord? MR. GETTY: Mr.

Speaker, the responsibility to start these negotiations is with the Minister of Energy, who has already mentioned a meeting he will be having with the federal minister of energy, and then we will take any additional meetings as required. MR. TAYLOR: A supplementary, Mr. Speaker. Could the Premier tell us or could he assure the Legislature that this hemorrhage is not going to continue and, as he is speaking, will he be taking a position against deregulation of gas prices? Will he be asking his federal cousins to delay the deregulation of gas prices? MR. GETTY: Mr.

Speaker, there's some debate in the industry and in government circles as to whether or not it's beneficial to move in the area of full deregulation of natural gas. As the members know, we have gone through a year period while industry prepares for the deregulation. Many, many people in industry feel that we should continue the course of deregulation. The hon. leader of the Liberal Party has some views on this. I wish he would express them, and we would certainly take them into account. MR. PASHAK: A supplementary question, Mr. Speaker, to the Minister of Energy on a related matter.

Given that Ontario and Quebec refineries are switching to cheaper imported crude, will the minister inform the Assembly what steps he is taking to ensure that this province's oil has guaranteed access to Canadian markets? DR. WEBBER: Mr. Speaker, as a result of the energy accord we have with the federal government — and I might add that as a result of that energy accord and the natural gas agreement, we had in this province in 1985 one of the best years the industry has seen. That change has certainly come about because of the fall in the international prices of oil, which essentially is beyond our control.

But in terms of the question the hon. member asked, as a result of that energy accord and as a result of talking to industry and their desires to see deregulation take place, it was naturally expected that there would be some increase in imports. But at the same time, there's been increase in export. At the present time, that has been the case. Farm Credit Stability Program MR. R. SPEAKER: Mr. Speaker, my question is to the Provincial Treasurer. It's with regard to two comments the Provincial Treasurer made in terms of the farm credit stability program. In Hansard of June 13 the minister indicated yet again: "Mr.

Speaker. I think our position is clear on that. This program is not an interest subsidy program as such." The minister indicated on page 6 of the Budget Address last night, "The statutory funding requirement for the interest rate relief is estimated at $25 million in 1986- 87." Could the minister indicate why the contradiction? Is it an interest subsidy program, or is it not? MR. JOHNSTON: Mr. Speaker, there is no contradiction. It is not an interest rate subsidy program.

I'm sure we will have an opportunity when the estimates of Treasury come forward to debate that further, except the plan of the government now is to introduce a long-term credit stability program at a fixed rate of interest, which cannot be described as being an interest rate subsidy program. MR. R. SPEAKER: Mr. Speaker, a supplementary. Could the minister indicate what time the program will be available? The minister has indicated possibly after the long holiday weekend, in the first week of July. Will applications be available at that time?

Will the announcement of details be available to the general public at that time? MR. JOHNSTON: Mr. Speaker, we're rushing with all our human resources and abilities to meet the deadline, which I think the Premier and the Minister of Agriculture have specified. It's of that order. Obviously, if you want to tie us down to a date, it's going to be difficult to give you a specific date, because you will remind us of how far we failed. But I'm simply telling you — as honest a commitment as possible — that we're doing our utmost to get the plan in place for the early part of the summer of this year. MR. R.

SPEAKER: A supplementary question to the hon. Provincial Treasurer. In terms of preference of application,

56 ALBERTA HANSARD June 17, 1986 will there be any preference in terms of who is served by those applications? Persons in financial difficulty, say, first of all; secondly, existing loans that farmers have in place; and thirdly, new loans? Will a preference system be estab­ lished when the loan applications become available, or do the farmers line up 30-deep on that day and apply as quickly as they can? MR. JOHNSTON: Mr.

Speaker, we're hopeful that with the number of financial institutions which are in place in this province, including Treasury Branches and credit unions, we should be able to meet the immediate demand for loan assistance. Yet, recognizing the member's interest and con­ cern about the farm community that he represents, perhaps he could recommend to me a priority list which we could consider as information. MR. R. SPEAKER: A supplementary to the Provincial Treasurer. It's with regard to the program for small business across the province of Alberta.

Will that program take on the same format as the Alberta farm credit stability program? MR. JOHNSTON: Mr. Speaker, as the member I'm sure is aware, when we announced before the election the broad details of these programs, we felt that in the case of the farm stability program a longer term, 20 years in particular, was envisioned, to assist farmers to move out of the current debt problem they're facing. But with respect to the small business program we felt it should be a shorter term. Generally, outside of the term, the conditions of the two programs will be very much the same. MR. TAYLOR: Mr.

Speaker, to the Treasurer. With respect to the farm loans supplementary, I appreciate his system of priorities. It conjured up in my mind visions of a another Oklahoma land rush. But I wanted to get it through to the Treasurer. With his estimate in the budget of $25 million or so in costs, are you talking about a guarantee of interest to the farmers — in other words, an interest-shielding scheme whereby the banks or some other institution will lend the money, and government just guarantees the interest rate will not go above that — or are you actually talking about lending money from the heritage trust fund? MR.

JOHNSTON: Mr. Speaker, I must first of all confess that not all of the financial dealings with the institutions are in place. I'm sure the Member for Westlock-Sturgeon can understand that I am to some extent providing the best explanations we can at this point. But because it is not an interest rate subsidy program and because we want to establish fixed term loans for the farm community, we intend to use the financial institutions to deliver those programs at a fixed rate of interest.

Obviously, institutions do not do this for no fee, nor would anyone in the private sector do it for no fee when there are costs involved. What we will do is use the financial strength of this province from a variety of sources, including the Heritage Savings Trust Fund, as referenced by the member, to provide funding to the financial institutions at some rate which will allow them to make a decent rate of return or a spread on that money.

As to the charges that shall be incorporated in that negotiation, of course, those are not totally in place at this point, and I cannot go further than to simply sketch for the member that broad arrangement. But clearly, Mr. Speaker, it's a fixed rate interest program. Subsidies to the farmers are not directly in place, and we hope that the take-up will be significant to assist this particular sector of the farming community. We know that among other provinces in Canada this is a unique and novel approach to dealing with this particular problem. MR. FOX: Mr.

Speaker, as a member from a rural con­ stituency I'd like to assure the minister that there is con­ siderable concern in the community about the rate chosen for this program, that the 9 percent rate is too high and won't have the desired effect. What we'd like to know is: is there a mechanism in place to allow for a lowering of the rates when you see that it's not having the desired effect in the farming community? MR. JOHNSTON: Mr. Speaker, I appreciate the position of the member.

Obviously, the rate is of concern to all of us, but I think that in terms of contemporary financial borrowing plans the 9 percent is substantially below the existing long-term rate. If the member has other information he can provide to me, I'd certainly appreciate it, but I think that right now the 9 percent is the best long-term rate in Canada. Summer Employment Programs MR. JONSON: Mr. Speaker, I wish to propose a question to the Minister of Manpower.

With the secondary schools of the province winding down for the school year and the consequent influx of students into the job market, I wonder if the minister could advise the House as to what programs are or will be in place to meet this demand for jobs from high school students. MR. ORMAN: Mr. Speaker, the Department of Manpower has two excellent summer programs relating to the surge of temporary employment from the school students. The first one is hire-a-student, which I think is probably the most famous hiring program in this province. We have 53 offices across the province.

It's an Alberta Chamber and Alberta Manpower joint initiative, and it's been very suc­ cessful over the years. The second is the summer temporary employment program. It provides career/work related experience for postsecondary students. We have offices throughout the province, and if the hon. member is aware of students that are looking for summer employment, I would certainly feel comfortable in referring him to one of these two programs. MR. JONSON: A supplementary question, Mr. Speaker.

Given that there certainly are some students that are not yet employed for the summer, I wonder if the minister could advise the House as to whether he has any estimate of the effectiveness of the programs he's mentioned? MR. ORMAN: Certainly, Mr. Speaker. The hire-a-student program last year reached out and assisted some 44,000 students in this province, and the STEP assisted some 11,500 students. If we total all of the manpower programs related to employment, we assist individuals in one way or another to a total of 460,000 people.

I think that's a very admirable job done by the Department of Manpower and this government. MR. SIGURDSON: Mr. Speaker, I'm wondering if the minister can advise the House if he's intending to extend the application program for summer temporary employment?

June 17, 1986 ALBERTA HANSARD 57 I understand that the application time for that program expired a number of weeks ago. MR. ORMAN: The deadline was April 1, Mr. Speaker. That deadline is the same year to year, and we have at this time no plans to extend that deadline. Small Business Loan Program MRS. HEWES: Mr. Speaker, to the Provincial Treasurer. Relative to the $750 million loan program for small business, when can we anticipate this program will be implemented? MR. JOHNSTON: Mr.

Speaker, our priority right now is to deal with the farming community, and we're attempting to get that program in place, given the urgency expressed by some members. But we expect that through the summer as well, shortly after the introduction and completion of the farm credit stability program, in fact the small business program will be ready to go. Obviously, the details and some of the approaches will be applied to that program, and we expect it to move fairly rapidly. MRS. HEWES: A supplementary, Mr. Speaker.

Will the administration of this program be undertaken by a government department or by private agents? The $15 million, I take it, is the same in this program as in the farm shielding. MR. JOHNSTON: To both questions, Mr. Speaker: we'll be using the existing financial infrastructure or the financial institutions within this province to deliver the program, because it obviously allows the institutions to deal with their clients, and we simply assist that particular strength in the Alberta economy and the private sector wherever possible to expand their credit horizons.

Secondly, with respect to the costs you are absolutely right. The same procedures are in place or contemplated, and that's why this appropriation is in my budget. MRS. HEWES: Mr. Speaker, to the Treasurer. Would you outline for the Assembly the eligibility criteria for receiving assistance under the program? MR. JOHNSTON: Mr. Speaker, I probably would be glad to do it at some point. But first of all, the test of eligibility and the criteria are now directly the responsibility of the minister of economic development.

I don't want to trap myself because I understand that I'm also the acting minister of economic development. But I can safely say that the intention of the program first of all is to stabilize the long- term funding requirements of the private sector, small busi­ ness in particular. The small business test will apply in terms of assets and income; the Alberta presence will apply in terms of ensuring that it's an Alberta corporation; and the Alberta ownership will apply to ensure that Alberta investors are taken advantage of.

We know that the private sector generates 60,000-some jobs each year, and we're trying to bring a program in behind it to ensure that job opportunities are created in this province. MRS. HEWES: Mr. Speaker, a final supplementary to the Treasurer. For instance, in the Alberta stock savings plan an eligibility requirement of $250,000 in assets is one of the requirements. Does the government intend to use the same criteria for eligibility to participate in the small business loan program? MR. JOHNSTON: Of course, Mr.

Speaker, you can appre­ ciate that the scale of operations in the case of small businesses must be reduced dramatically. We will err in favour — if you will excuse the term, a liberal assessment — of small business. But we will do our best to ensure that the widest possible number of small businesses are eligible for this program. The asset test will be a minimum, simply to preclude the larger corporations from benefitting from this program. DR. BUCK: Mr. Speaker, to the hon. minister. What does this first come, first served on the application mean to the government?

Does that mean there's a lineup, or does it mean blue and orange cards? What does the first come, first served thing mean? MR. JOHNSTON: First of all, Mr. Speaker, if the member is adding to the comments of his colleague with respect to the priority list, I've attempted to show that we will deal with all loans as quickly as possible. That's the intention of the program. Obviously, we do not at this point point to a first come, first served list.

I would expect that those loans where the farmer or the small businessman has some sort of a crisis before him would obviously become the priority, and that's only a reasonable expectation. That is also the discussions we've had with the financial institutions. I should say, Mr. Speaker, while I have an opportunity that I do not want to mislead the lady with respect to my last answer. I want to be absolutely clear that we will have as easy an approach to asset tests as possible. There will not be the $250,000 test that she referred to. MR.

HAWKESWORTH: I'd like to ask the minister, as a supplementary, who determines whether an individual busi­ ness qualifies or does not qualify? That is, how will this program be different from a small business getting a loan from their usual bank manager or their loans officer? How will it be different from that? MR. JOHNSTON: Mr. Speaker, there is a variety of ways, which I can differentiate. I think it is safe to say, however, that in this program the government anticipates providing a guarantee where the risk is greater.

I'm sure that this guarantee in itself will ensure that riskier loans, obviously, are given to the private sector. That's the general intention. Again, I hesitate to be to specific, because not all of these details have been put in place with respect to the financial institutions. Alberta Stock Savings Plan MR. McEACHERN: Mr. Speaker, my question is to the Provincial Treasurer.

Has the Treasurer asked his officials for a report on how in the world it is possible that a provisional certificate of eligibility was issued by his depart­ ment for a company. [Amusements] International Ltd., which intends to use the Alberta stock savings plan to build a waterslide in Redondo Beach, California? MR. JOHNSTON: Of course, Mr. Speaker. I've asked, and there's been no certificate issued. MR. McEACHERN: A supplementary, Mr. Speaker. Will the Treasurer not admit that quite a number of these

58 ALBERTA HANSARD June 17, 1986 provisional certificates of eligibility have been issued? There are a number of press reports to that effect. MR. SPEAKER: With reference to the press, I'm sorry; it is out of order. Perhaps the minister would like to respond to the first question. MR. JOHNSTON: Mr. Speaker, perhaps I should take a few seconds, since the question has been raised. I ask your advise, however, Sir, in that we are dealing not with legislation but essentially with policy, which the government has implemented to some extend.

On the assumption that I can give a brief explanation, perhaps I should do that. Mr. Speaker, let me begin by saying that the intention of the Alberta stock savings plan was introduced and outlined by legislation brought forward by my previous colleague, Mr. Lou Hyndman, then Provincial Treasurer. In that leg­ islation we put out a policy statement, which we believe will encourage private-sector investment in Alberta com­ panies.

Obviously, the intention was to ensure that Alberta private investors would be able to use the tax system, which is a general application to all investors in Alberta, to muster the aggregate potential in Alberta to invest back in the private sector and to generate jobs and to generate economic activity. That still is the intention and the initiative which this government will follow. Secondly, an issue of economic union has often been discussed in this country, in this Confederation of provinces.

We know full well that it is in fact impossible to prevent money from flowing outside of our provinces even though the plans or the incentives or the benefits had been driven by a particular province, and we in Alberta have worked on that premise for some time, Mr. Speaker, since we have drawn a lot of money from other parts of Canada to support megaprojects in this province. I witness some of the sub­ stantial investments in oil and gas development, in synthetic oil and crude, in the petrochemical industry in particular.

So we know that, when we work on the principle that in a confederation you must allow for the free flow of resources within the country. Thirdly, Mr. Speaker, let me indicate to you that we intend to maintain the Alberta precedence priority. There is no way that we will back away from the test to ensure wherever possible that the maximum economic benefits flow to this province. Now the current legislation . . . MR. SPEAKER: Excuse me. Thank you. Sorry, would you please resume your place as well. At some stage of this last number of minutes I did hear the word brief.

My definition of brief is being somewhat sorely tested. With respect to the fact that the Chair has some discomfort with the question at the moment, I believe I'm going to have us move on and recognize the next member into question period, because we have at least nine other members who are anxious to get into this discussion. Does the member have a point of order? MR. McEACHERN: It does seem to me that when a government is proceeding with a plan that is getting a reaction — that is not a hypothetical question — they deserve to be questioned on that. MR.

SPEAKER: If you have a very brief supplementary question which is without rhetoric, without comment — one brief supplementary question. [interjection] No. I'm sorry. You're not in a bargaining position. MR. McEACHERN: Will this government assure us that the majority of the jobs created by the investments they make through this plan accrue to Alberta? MR. JOHNSTON: Mr. Speaker, I believe I've already given that assurance. That is one of the principles which we will stick to. We will attempt to define the Alberta precedence wherever possible and maximize that the investment flows come to our province first of all.

Geriatric Care REV. ROBERTS: My question is to the hon. Minister of Hospitals and Medical Care. As we were reminded in the House yesterday, this is Senior Citizens Week in Alberta, and as we were told in the government's Speech from the Throne, the government is committed to the best health care system anywhere in the world. But as the minister is do doubt aware, we are facing a crisis in this province of health care for the elderly.

My question for the minister is: what is he doing about the fact that five out of the nine positions for geriatricians at the Youville Memorial hospital are now vacant, and are there growing threats to the facility's survival as an active treatment geriatric hospital? MR. M. MOORE: Mr. Speaker, most hon. members would be aware that the Youville Memorial hospital is a part of the Edmonton General hospital. It is a very unique institution in terms of its role in health care for senior citizens.

As such, there have been a number of difficulties over the course of the last three years in bringing that institution to its full capabilities. The role of the Youville hospital has not been clearly defined and agreed to by the Department of Hospitals and Medical Care, the University of Alberta medical department, and the board of the General hospital. In addition to that, there is some dispute within the hospital as to who actually runs or controls or operates the Youville Memorial hospital, whether it be the board of the hospital or the medical staff.

Those differences of opinion have led to some uncertainty by certain medical staff as to what their position is and whether they want to continue providing their services to our senior citizens through that facility. Mr. Speaker, the matter rests almost entirely with the board of directors at the Edmonton General hospital, who have been meeting and will continue meeting, as I understand it, to discuss the problem associated with the medical staff and the fact that some have left and others may be preparing to leave.

I can, however, assure the hon. member that as far as I'm concerned, the Department of Hospitals and Medical Care and my office, working with the board, will do everything we can to ensure that that facility is utilized to its fullest extent. In that regard we have three world- renowned specialists in medical care for elderly people who will be visiting with us in July of this year to do a full assessment of the medical programs at the Youville centre and making recommendations to the board, my department, and the medical staff. That fact is well known by all those involved. REV.

ROBERTS: A supplementary question, Mr. Speaker. I am glad for the minister's awareness of the key issue. Has he given consideration to giving the administration of the 210 beds at the Youville that have been set aside for

June 17, 1986 ALBERTA HANSARD 59 geriatric medicine over to either an independent board or hospital district 24 for their careful administration? MR. M. MOORE: Mr. Speaker, as a matter of fact, no consideration whatever has been given to that because I have full confidence in the ability of the existing board of the Edmonton General hospital to manage and operate properly the Youville wing of the Edmonton General hos­ pital. REV. ROBERTS: A supplementary question, Mr. Speaker. That's like saying we should have heart specialists run a cancer hospital. Mr.

Speaker, has the Minister of Hospitals and Medical Care ever spoken to the geriatricians at the Youville to know their concerns and the reasons for their massive resignations? MR. M. MOORE: Mr. Speaker, I have spoken with the members of the administration of the hospital and also with the members of the board of directors of the hospital. My contact with the hospital, in terms of its operation, will continue to be with those who are responsible for the hospital's operation, and that is the board of directors. REV. ROBERTS: A supplementary question, Mr. Speaker.

Maybe we can ask the ex-hospitals minister if he knows about some of this. AN HON. MEMBER: Out of order. REV. ROBERTS: On the same topic, Mr. Speaker. MR. SPEAKER: I'm sorry, you cannot direct a question to the previous minister. REV. ROBERTS: Oh, I'm sorry. It's on the same matter. To the Minister of Advanced Education: what programs of support has he as the Minister of Advanced Education given for research in and teaching of active treatment geriatric medicine in the province of Alberta, which is one of the few provinces of Canada that does not yet have . . . MR. SPEAKER: The question is complete, thank you.

MR. RUSSELL: Mr. Speaker, the support that was there, through the university and through the Department of Hos­ pitals and Medical Care, for specialized geriatric treatment is well known, and the very good accomplishments of Dr. Skelton are well known. It's true that we would like to see more geriatric specialists in our schools of medicine. Unfor­ tunately, we haven't yet been able to convince young people that that's a good role to take up, but hopefully they will.

I agree with the hon. member opposite that that is the major health challenge of the future, and our educational system should be preparing for that challenge. MR. SPEAKER: The final question of the day. The Chair recognizes the Member for Calgary Buffalo. MR. CHUMIR: Mr. Speaker, I was rising to ask a sup­ plementary in respect of the previous question, if that would be feasible. MR. SPEAKER: Agreed, but may we move ahead with some alacrity. MR. CHUMIR: As long as it doesn't imperil my new question. MR. SPEAKER: I recognize you for a supplementary. MR.

CHUMIR: To the minister of hospitals, and perhaps this might be something that the hon. Premier might wish to answer. Earlier this year Dr. Christine Mason, who was the last geriatric medical specialist in the city of Calgary, having departed, wrote an open letter to the Premier com­ plaining about government policies. MR. SPEAKER: Question please. MR. CHUMIR: As she complained about the absence of focus on geriatric medicine in the city of Calgary — there's not one geriatric doctor — what has the government response been to that letter of Dr. Mason's? MR. M. MOORE: Mr.

Speaker, I'm not familiar with the particular letter the hon. member refers to. If he could perhaps provide me with a copy of it, I'd be pleased to check into the matter. MR. CHUMIR: I'm sure that the Premier could provide the hon. minister with a copy. MR. SPEAKER: Could the hon. member take his place for half a moment. Thank you. Question period has technically come to an end, but because I have recognized the Member for Calgary Buffalo, we will go through this series of questions with alacrity, if we have concurrence of the House. Is it agreed? HON. MEMBERS: Agreed. MR. SPEAKER: Thank you.

Natural Resource Revenues (continued) MR. CHUMIR: Mr. Speaker, to the hon. Minister of Energy. We are all aware that the province of Alberta has subsidized the rest of Canada insofar as Alberta oil prices were kept below world prices for many years. Can the minister tell this House what the amount of that subsidy is, according to government calculations? MR. TAYLOR: I'll tell him if you want. DR. WEBBER: The Member for Westlock-Sturgeon has indicated he'd be prepared to answer the question for you. However, the estimates that we have are between $50 billion and $60 billion and, more accurately, $56 billion. MR.

CHUMIR: Mr. Speaker, to the Minister of Energy. When the government entered into the Western Accord on behalf of the people of Alberta in March 1985, did it not foresee at that time the potential for a major precipitous decline of oil prices? DR. WEBBER: Mr. Speaker, the western energy accord was in response to an unfair national energy program foisted upon western Canada by the previous Liberal government. [interjections] So that accord came into . . .

60 ALBERTA HANSARD June 17, 1986 MR. TAYLOR: It's pretty small now. [interjections] MR. SPEAKER: Order please. DR. WEBBER: So the agreement was a good agreement, and industry responded like they hadn't done in years with, as I mentioned earlier today, 1985 being an excellent year. However, the control over international prices, as the mem­ ber is well aware, is beyond that of this particular province. MR. TAYLOR: What would you rather have, Ottawa or the sheik controlling the prices? MR. SPEAKER: Question please. Supplementary. MR. CHUMIR: Mr. Speaker, to the Minister of Energy.

We're all aware of what a wonderful agreement it is. MR. SPEAKER: Question please. MR. CHUMIR: Might I ask the hon. minister why it was, in light of the obvious likelihood of the decline in oil prices, that a provision was not inserted into the Western Accord protecting the people of this province in the same manner as

section 9 appears to have been put in to protect the consumers? DR. WEBBER: Mr. Speaker, I suppose we could rehash in a debate way the Western Accord and negotiations leading up to that. If the hon. member wanted to put a motion on the Order Paper, I'd be happy to participate. MR. CHUMIR: Mr. Speaker, a final supplementary to the hon. Provincial Treasurer. Does the government have an estimate of the cost to the province of Alberta of the loss of royalties arising as a result of the deregulation of gas prices on November 1? MR. JOHNSTON: Mr.

Speaker, that kind of a question would have to go on the Order Paper and more appropriately would go to the Minister of Energy. MR. SPEAKER: The Chair agrees. MR. PASHAK: A supplementary question. MR. SPEAKER: No, I'm sorry. No further supplementaries today. Thank you. The Chair would like to remind all hon. members that we have left outstanding today eight members of the Assem­ bly who would like to participate in the question period.

Again the Chair would remind both those framing the questions as well as those responding that the nature of question period really calls for the posing and the answers as being relatively brief in the seeking of information. Nevertheless, the Chair apologizes to hon. members who were not able to participate in question period today, and I would hope to be able to take some notice of that with regard to question period tomorrow.

I would also like to point out that the Chair and members have been guilty of using phrases such as "you" and "members from," and again I hope that as we carry on in the learning process, we will refer to each other as the "member for" and that we do not engage in referring to each other as "you." But again our guilt has been mutual on this occasion. Might the hon. Minister of Public Works, Supply and Services stand and reply briefly to the question which was raised yesterday in question period? HON. MEMBERS: Agreed. Government Purchasing Policies MR. ISLEY: Thank you, Mr. Speaker. The hon.

Minister of Recreation and Parks yesterday accepted a question on my behalf directed by the Member for Edmonton Meadowlark. The question was related to the supply of certain products for the construction of a road project on Highway 17. I'm in a position today to inform the House that the assessment of tender documents has been completed, and the contract is being awarded to Genstar, located in Edmonton, Alberta. head: ORDERS OF THE DAY MR. SPEAKER: I wonder if we might revert briefly to Introduction of Special Guests. Is there agreement, Members of the Assembly? HON.

MEMBERS: Agreed. head: INTRODUCTION OF SPECIAL GUESTS (reversion) MR. WRIGHT: Mr. Speaker, it's my pleasure to introduce 15 students from the International Student Centre, who were here; I hope they still are. Will they rise if they are, please — thank you — with their teachers Najib Mirza and Doug Chellborn. This is from the constituency of Edmonton Strathcona. I would wish the members to signify their appreciation and welcome in the usual way. Thank you, Mr. Speaker. MS BARRETT: Mr. Speaker, I too would like to see if the visitors I was expecting are here from the Mount Royal elementary school. Good.

There are 27 of them in the grade 6 class. Today they are accompanied by teachers Mr. Dolinski, Mr. Mitchell, and a parent Mrs. Jacob, arriving after 3 p.m. today. I wish them well. I'll meet them in a few moments, and in the meantime I ask that the members recognize them in the traditional warm welcome. MR. HORSMAN: Mr. Speaker, with regard to questions and motions on the Order Paper I would move that questions 131, 132, 136, 137, 138, and 139 and all the motions for returns, 140 to 147 inclusive, stand and retain their places on the Order Paper. [Motion carried] head: WRITTEN QUESTIONS 130. Mr.

Wright asked the government the following question: Is it the intention of the government to direct, through the Department of the Solicitor General, that the current statute banning the use of so-called radar detectors in the province of Alberta be enforced?

June 17, 1986 ALBERTA HANSARD 61 Is it the intention of the government to introduce legislation legalizing the use of so-called radar detectors in Alberta? 133. Mr. Younie asked the government the following question: On April 17, 1984, the Assembly ordered the production of two returns showing: (1) copies of various sorts of information gathered at and around the Luscar Sterco mine at Coal Creek near the Lovett River, and (2) copies of any certificates of variance, water quality control orders and stop orders issued to the permit holder for the mine. On April 8, 1986, the hon.

Government House Leader accepted a written question inquiring when those returns would be presented to the Assembly, and what circumstances or conditions had precluded the presentation of those returns prior to the time of the acceptance of that written question. When will the returns ordered on April 17, 1984, be presented? When will a response to the written question accepted on April 8, 1986, be presented? MR. KOWALSKI: Mr. Speaker, the response to Question 133 was tabled earlier today. 134. Mr.

Gibeault asked the government the following question: For the fiscal years 1982-83, 1983-84, 1984-85, and 1985- 86, in each case: (1) what was the quantity, expressed in litres, of product originating in the Republic of South Africa purchased by the Alberta Liquor Control Board; (2) what was the cost, expressed in Canadian dollars, of product originating in the Republic of South Africa purchased by the Alberta Liquor Control Board; (3) what was the cost, expressed in litres, of product originating in Chile purchased by the Alberta Liquor Control Board; and (4) what was the cost, expressed in Canadian dollars, of product originating in Chile purchased by the Alberta Liquor Control Board? 135.

Mr. Martin asked the government the following question: What is the government's best estimate of when it will be able to table a response, in each case, to:

(1) Order for a Return 139, adopted May 14, 1985, for details of travel by Members of the Legislative Assem­ bly, members of Executive Council, and others, for the period March 1, 1984, to March 31, 1985;

(2) Order for a Return 141, adopted May 28, 1985, for results of monthly ambient water quality monitoring undertaken at 11 river sites in Alberta; and

(3) Written Question 131, adopted April 8, 1986, seeking details of the contract under which Mr. Ron Ghitter acted for the government in the matter of the hotel project in Kananaskis Country? head: MOTIONS OTHER THAN GOVERNMENT MOTIONS 201. Moved by Mr. Oldring:

Be it resolved that the Legislative Assembly urge the government to consider establishment of a consumers' advo­ cate for the purpose of intervening at Public Utilities Board hearings and to provide expertise to affected consumer organizations. MR. OLDRING: Mr. Speaker, it is my pleasure today to introduce Motion 201, the first motion on the Order Paper in the First Session of the 21st Legislature. This motion urges the government to consider the establishment of a consumers' advocate for the purpose of intervening at Public Utilities Board hearings and to provide expertise to affected consumer organizations.

The intent of this motion, Mr. Speaker, is to ensure that those Albertans affected by the decisions of the Public Utilities Board hearings will be able to receive a full and proper representation before this tribunal, regardless of their financial means. I'd like to start by giving a brief overview of the functions of the Public Utilities Board, and then I'd like to move on to discuss the current situation in Alberta.

The Public Utilities Board is an independent, quasi-judicial tribunal charged with the responsibility of regulating all telecommunications and all electric, water, and gas utilities, with three exceptions. The first exception is that of munic­ ipally-owned utilities. However, there are provisions there: upon the request of the municipality to have their utility come under the jurisdiction of the PUB, but only upon the request of the municipality. The second exception is that of rural electrification associations, and the third exception is that of gas co-operatives.

The principal responsibility of the Public Utilities Board is to ensure two things: firstly, that regulated utilities receive safe and adequate service and, secondly, that the safe and adequate service received is at rates which are fair and reasonable to all parties involved. The Public Utilities Board accomplishes this by holding public hearings involving appli­ cants and intervenors.

Rate hearings usually result from an application to the board by a utility company for a rate increase, so that a typical hearing would involve a utility company as an applicant, and the intervenors would be those individuals or municipalities or associations who come forward of their own initiative to challenge the application. The real key to the whole process of public hearings working effectively, Mr. Speaker, is that there has to be intervention, there have to be intervenors coming forward to present opposing views.

In support of this I would quote from a 1977 position paper which sets out the current PUB policies. The Public Utilities Board, and I quote: not only welcomes interventions but considers that it requires interventions to discharge properly its duties as a quasi-judicial tribunal. The board is neither struc­ tured nor funded so that a total scrutiny of the appli­ cant's case can be done by the board, its staff or consultants retained by the board. There are two important points being made there.

The first one, of course, is that the PUB has indicated that for the hearings to work effectively, there has to be intervention. Secondly, they very clearly point out that the board itself is not structured to allow for total scrutiny of the applicant's case. Also out of that same paper I quote: The paradox — an intervention is by its very nature a form of protest against increasing consumer prices.

It would seem logical, therefore, that the present resist­ ance, amounting almost to resentment on the part of consumers to the imposition of new and higher customer rates would lead to increased interventions at rate hearings. However, the contrary is true, and there is an apparent lessening of the number of meaningful interventions. The board is concerned about this phe­ nomenon. This paradox is. of course, understandable

62 ALBERTA HANSARD June 17, 1986 because as the costs of intervention increase, interven­ tions will be less frequent. Mr. Speaker, the frequency of interventions at Public Utilities Board hearings are fewer. I believe there are a number of factors that are contributing to this. One of the main reasons we are seeing fewer interventions at public hearings has to do with costs involved in making repre­ sentation. Allow me to use an example to make my point here. In 1978 the city of Calgary intervened in an application made by Canadian Western Natural Gas.

To the city of Calgary at that time the total cost of that application was $510.25. In 1986, eight years later, the city of Calgary again inter­ vened in an application made by Canadian Western Natural Gas. This time the cost of that intervention rose to $90,591.90. From $500 to $90,000: a considerable difference. Now I recognize that no two applications are the same, that there are a number of factors to be taken into consideration, that there are a number of differences, and that there are a number of variables.

Nonetheless, I still believe that it is indicative of the costly trend upwards to attend and to be effective at these hearings. It's also indicative of the mag­ nitude of effort and input required at these hearings. I know it may be argued that there are provisions under the existing legislation for the recovery of costs; however, there are a number of problems with this as well. First, the Public Utilities Board does not make awards to costs until well after the hearings have been completed. Secondly, there is no early indication as to what costs the board will consider appropriate.

The current policy states: Costs will be awarded against an applicant and allowed to be recovered from customers through the rates only if the interventions have been effective in testing the applicant's case to the benefit of all customers and such costs have been reasonably and necessarily incurred. Mr. Bill Neilson was the chairman of a panel at a seminar entitled Effective Participation in Alberta's Energy Planning, Decision Making, and Regulatory Processes. This particular seminar was held on October 16, 1978, in the city of St. Albert. Mr.

Neilson stated at that time, and again I quote: The policy of cost awards raised a number of questions with respect to the definition of the public interest and its relation to cost awards. For example, how does one define the public interest? How does one relate to a constituency that is ambiguous? How many "publics" make up the public interest? Al Bryan, another panelist, stated: Uncertainty of recovering costs of participation is a major reason more and more municipalities have been saying "no" to interventions. I might add, Mr. Speaker, that two other associations have been affected.

Both the Consumers' Association of Canada, the Alberta chapter, and the Alberta Urban Muni­ cipalities Association have stopped making interventions for that very reason. I think it is abundantly clear that the uncertainty of recovering costs has precluded and discouraged interventions from a number of directions. The costs are high and so is the risk for recovery. Mr. Speaker, I believe that a con­ sumers' advocate would help to remedy this situation.

Another problem that was pointed out, and I believe quite accurately so, at the seminar I alluded to earlier in my remarks is that a lack of lead time and continuity made it difficult to make adequate representation. Mr. Bill Hurlbunt, again a panelist, stated, "Most interventions start off in an atmosphere of rush with inadequate knowledge." Another panelist, the late Ralph DeWolf, the then mayor of the town of Bashaw and at that time president of the Alberta Urban Municipalities Association stated: Municipalities experience difficulties intervening.

They don't have the time to organize their case, find lawyers, get interim financing, etc. Once again, Mr. Speaker, a consumers' advocate would always be prepared and know just what has to be done to ensure effective representation. He or she would be able to offer that continuity and readiness required for effective representation.

A number of other reasons that arose as a result of this particular seminar in support of establishing a consumers' advocate included the concern over the amount of work involved in preparing for the interventions themselves and the complex and technical nature of the issues being dis­ cussed. Mr.

Bill Seater, who represented the Rural Electric Council, expressed the sentiment of a lot of Albertans, I think, when he stated, "The costs and time involved in intervening scares me." It was interesting to note that a number of the members of that panel expressed the opinion that the role of the Public Utilities Board was to protect their interest. There was no need for them to come forward.

Al Romanchuk, the then mayor of the city of Grande Prairie stated, and again I quote: The Grande Prairie council tends to view the Public Utilities Board as a consumer watchdog, and looks to the Public Utilities Board to guard the consumer interest. Mr. Speaker, this just plain and simply is not so. By their own admission, the Public Utilities Board's own policy states very clearly that they are neither structured nor funded to allow for a total scrutiny of the applications being made in front of them.

It was also interesting for me to note that a number of the panelists concluded that a consumers' advocate would go a long way towards improving the current situation. Mr.

Speaker, ultimately, what we are trying to do through a consumers' advocate is to help balance the scales between, on one hand, the utility companies that are well equipped to present their point of view and to give their perspective and, on the other hand, individual Albertans that are having to deal on a day-to-day basis with the consequences of these very important hearings, individual Albertans that often lack the financial means and the technical expertise to fully protect their interests and their rights. Mr.

Speaker, I think a number of Albertans are growing more and more frustrated and angered, in some instances, with the current situation. I know that in my constituency the constituents have certainly expressed their frustrations to me throughout the election process, and certainly Mr. Jim McPherson, the former representative for Red Deer in this Legislature, can attest to that fact. Mr. McPherson had received over 300 letters from constituents that are frustrated and concerned, and yet they don't know where to turn; they don't know what directions to take.

All they know is that their utility rates are skyrocketting and their income is dropping, and they don't why the two don't jive. It's not good enough just to tell them that they can appear in front of the PUB. It's not good enough to tell them to show up and present their case there. Public utility board hearings are not an appropriate form for individual Albertans. Public utility board hearings are for lawyers, accountants, technical experts, and professional witnesses. Mr. Speaker, allow me to share with you some of the responses that my constituents have received from the Public

June 17, 1986 ALBERTA HANSARD 63 Utilities Board. I do so not to slight or undermine or criticize the Public Utilities Board but only to point out the inadequacies of the process. I have a letter here in response to one of the citizens in my constituency. It's a response from the Public Utilities Board office, or on behalf of the Public Utilities Board, and I'll just quote. They point out to this particular person that lengthy public hearings were held in the city of Calgary during the period September 3 to September 13, 1985.

They go on to say that in excess of 1,300 pages of transcript recorded these proceedings and 76 exhibits were submitted as evidence, and that the board had recently released its 240-page decision, number E85129, dated November 25, 1985. A 1,300 page transcript, 76 exhibits, a 240-page decision: what does this mean to average Albertans? Again, a response from the Public Utilities Board to another constituent expressing those same concerns and sentiments. They point out again the 240-page decision, the 1,300 pages of transcript, and the 76 exhibits, but they add a little more confusion into this one.

They point out that the board does not set the rates to be charged by the city of Red Deer electric system, that the city of Red Deer does. Again that's partially accurate, but there's no question that the decisions of this board affect very directly the cost of power to the citizens of Red Deer. So I think what they've done here is they've thrown out a bit of a red herring, and again they've confused that constituent even more. "Now who do I turn to? The PUB? The city of Red Deer? My MLA?

Where do I turn?" Lastly, and this one is kind of interesting, this is again a letter from my constituent, who felt that this was a pressing enough issue and concerned him enough that it was appropriate to write to the Premier of our province. This particular individual was a former alderman for the city of Red Deer as well. He concludes his letter by stating: I probably should have taken this issue to the Public Utilities Board; however, it is impossible to approach a board that has permitted this type of gouging to lake place in the first instance.

I don't necessarily agree with that individual's conclusion, but I think what it really does is express his exasperation. It expresses his frustrations at not being able to somehow find out why his utilities are going up as frequently and as often as they are. An interesting process, Mr. Speaker, but I ask how ordinary citizens, everyday Albertans in this province, can feel that their interests are being represented. How can they relate to 1,300 pages of transcripts? How can they relate to 76 exhibits? How can they relate to a 240-page decision that's suppose to tell them why their utility rates are going up?

How can they be assured that their people concerns are being heard? It's a judicial process that we have here; it's not a people process. It's intimidating, and it is beyond the reach of most Albertans. And it just seems to roll right over us. Mr. Speaker, I think it's essential that we establish a consumers' advocate to ensure that the citizens of this province can feel that they have a meaningful opportunity for input to the Public Utilities Board hearings and can feel that their concerns are truly going to be expressed. Mr.

Speaker, as this is the first motion of this session, and as I have had the privilege to be the first speaker in this debate, I look forward to the debate that follows on what I consider to be a most important issue. Thank you. MR. PIQUETTE: Mr. Speaker, I'd like to speak in favour of Motion 201. I think it's a long time since I've heard this type of a motion, which is really responding to a lot of the questions that I was asked, as well, during the election campaign. For example, in my constituency we are working in terms of economic development.

One of the problems we have is that the small power producers in Alberta have difficulties in terms of accessing the Public Utilities Board in order to have their fair share in the market of Alberta Power and TransAlta. One of the things we also find is that here in Alberta, we have some of the highest utility rates in Canada. I believe we're the only province west of Prince Edward Island that doesn't own its own hydroelectric power or natural gas distribution, et cetera.

Without the proper func­ tioning of the Public Utilities Board, we have a monopoly situation in terms of private companies being able to charge basically what they feel they want to charge a consumer or the public in relation to what return of investment they want to have. For example, I was just reading the financial reports of TransAlta and Canadian Utilities, and it appears that they have a guarantee of 15% profit based on investment.

As a farmer I have never seen where I have the power, for example, to ask the marketing board, the meat packers' plant, Gainers, or whatever else, to have a cost-of-production type of formula where I can get a 15% profit on everything I sell to the consumer regardless of how stupid or silly I may be in terms of the kind of machinery that I may want to buy during the course of the year. With our Public Utilities Board. TransAlta or any of those companies may decide to make an investment that may be totally irrelevant to the economic situation of Alberta. We've seen a lot of power plants, for example, being built.

Then they have the right to turn to the public and ask that these costs be recovered through higher rates for our farmers, our small business, and our consumers. I think that Motion 201 speaks very loudly of the need to make sure that we have a consumer advocacy within the Public Utilities Board.

I would go even further, in terms of saying that we need to rewrite the whole Act to begin with, because I do not think that by simply putting in the Act the part of having a consumer advocate being able to pay some of the costs of attending some of these hearings, we will be really addressing the whole issue here in Alberta. I really have to go. in terms of another commitment. I would like to urge this Assembly to look at the whole aspect of the Public Utilities Board but also to take into consideration the motion that was presented to us today. Thank you very much. MR. CHUMIR: Mr.

Speaker, I have a few comments on this motion, the brevity of which hardly merit the description "speech." However, I would like to speak, and in the same direction, I'm sure. I would like to support the spirit of this motion and congratulate the hon. member on the enlightenment of it. In fact, it's sufficiently enlightening that I'm surprised to see it coming from that side of the floor. It would have been more appropriate to come from these very benches here.

The point that the hon. member has made, and rightly so, is that very major decisions involving extremely large sums of money are made by the Public Utilities Board and other public bodies in this province, and these boards operate on the basis of the adversarial process. It's like the courts: they're generally only as good as the input made and the arguments made before them. It is very difficult for members

64 ALBERTA HANSARD June 17, 1986 of the public to be able to input into these boards because of the time and expense involved in doing so. We as a public all have an interest in having the best decisions emanate from these boards, and those best decisions will only come when there is some representative of the public interest there. That public interest and that potential of having such interest through a consumer advocate has been recognized in other jurisdictions, particularly in the United States.

In summation, I would support the motion and suggest that we would do very well to consider having a public advocate in this province acting either on his own or alone in terms of his office or, alternatively, assisting informed and enlightened groups not only before the Public Utilities Board but in other areas in which we have a collective interest in an effective decision-making process. In closing, I have one final quibble with the terms of the motion. It concludes that we provide expertise to affected consumer organizations.

In fact, I'm sure that the hon. member in his comments made it quite clear that it's really not the consumer organizations that are affected, it's the public interest of all of us that's an issue. It's the consumer organizations that have mobilized to represent that interest. Thank you. MR. HYLAND: Mr. Speaker, as I rise to participate in Motion 201, I'd like to express views that I've received from constituents over a number of years and also views expressed to me by a group that was recently formed called the Energy Users Association of Alberta, which started in my constituency.

Its president is a gentleman by the name of Peter Eichelbaum, who has put in a considerable amount of time, especially working on rate increases relating to natural gas. Mr. Speaker, I would like to express my support for this motion for the need for an advocate. Along with that, though, concern has been expressed by other members that an advocate, if he or she or that person or that position is in place and dealing with the same people as the Public Utilities Board, could become like we see the Public Utilities Board has become.

Dealing totally with the same people over a period of years, it has become something like an old boys' club, or whatever you want to call it. It wouldn't project the need that is there for somebody to provide some sort of expertise to people appearing before this board. Mr. Speaker, I suppose it's the only way that it can work, but it's ironic that those who are affected by the rate increases and those who would appear before the board if they could afford to do so are really battling against their own money.

It's ultimately them who has to pay, whether the utility is putting forward for a rate increase or a consumer group or organization such as the energy users are appearing before the committee and hoping to receive coverage for their costs. Ultimately, the consumer pays for the whole thing, whether it's in the form of covering their cost for intervention or covering those costs paid by the utility company for their rate increase hearing. Mr. Speaker, the Member for Red Deer South outlined the greatly increased cost since 1978 for appearing before the Public Utilities Board. The total of a decision was $614.25.

When the same company appeared before the board in 1986, the total for the intervenors was some S292,710.03. I don't know mathematically what that increase is. but it is substantial, and you can see why certain groups have decided not to appear because of the costs involved. My understanding of the court system — I would have to listen to my hon. colleague who spoke before, being as his background is law — is that I thought one could appear before the court system and defend oneself in an action and be considered as a person in stature in that room,

whereas the feeling that I get from people that intervene in the Public Utilities Board, even though it is not a court, is that they get the feeling of uneasiness and the feeling that they should be an expert at appearing. That may be just their feeling and may not be the intent of the board and/or the people involved in that board. Nevertheless, that is the feeling they've told me they feel when they're appearing before there. They ask a question. They say, "Why are you an expert, to ask this question?

What's your background?" All they're doing is asking the question for information, and appearing before the board, they get an uneasy feeling about how they're considered and at what stature they're considered. Mr. Speaker, another concern that has been expressed by various members is the percentage of return on investment that a utility company is able to have. Some say it's 15 percent; some say it's higher. The concern is with not only the return on investment but how that investment is arrived at and how the figures of the cost of operation are arrived at.

When one appears before that committee — if you write to the Public Utilities Board and say you want to appear before it, you get massive reams of paper to go through and understand, and you're supposed to argue the hearing on just those pieces of paper in front of you. If you're not a lawyer or a chartered accountant or some person who specialized in that, they find it difficult to tear that apart, and it then becomes something that it probably wasn't intended to become to start with. The Public Utilities Board may lose its stature of protecting the consumers of the province.

The concern that was expressed to me by people appearing before it, Mr. Speaker, going along with these comments, was that they look at the cost of a company doing something and they can't compare it to another company in the same field. You are virtually working on a cost-plus situation, and you start to lose a control when you can't compare one against the other. Again, if my understanding of our court system is true, to me that would seem like you're only able to argue your defence on the information presented by the Crown Prosecutor and not on the information that you would present yourself.

You'd be at a very great disadvantage in trying to prove your innocence or, in this situation, trying to prove the case that you think that the company may be padding the operation too much to show that they need an increase in the income to their company unless an increase to the consumer for the use of that utility. Mr. Speaker, just to outline how complicated appearing before the committee can be and then, as a result, just a small irregularity, following the committee, as I said earlier, Mr.

Eichelbaum from my constituency appeared before the Public Utilities Board committee as president of the Energy Users Association. He has been working with one particular company through the Public Utilities Board in a small problem of incorrect billing, an overdue billing in bills and estimates received by farmers. Mr. Speaker, I've probably got 50 pages of letters going back and forth just to deal with that problem, and it still isn't solved. So instead of a simple matter of having a customer come to a small businessman and saying that there's a problem here and the

June 17, 1986 ALBERTA HANSARD 65 small businessman saying, "Okay, let's fix it," and they fix it and it's done, this thing has been going on for a year. All these letters have passed forward and it still isn't solved. Perhaps we need to do something with the operation so the two parties can get together and solve these kinds of problems, whether it's rate increases or the need for rate increases or just the problem that I outlined, so that it doesn't go on forever and ever.

The user writes to the PUB to say, "Would you please look at this?" The Public Utilities Board writes to the company and says, "Why does this happen?" The company writes back and says, "This happens because." The Public Utilities Board writes back and says to the person who wrote the original letter, "This happens because, and this is what the utility company has told us." So the guy has to write back, and it goes through three hands before it gets sorted out, and it still isn't sorted out.

If an advocate would assist that, that would be great, but I think it's a little deeper than that, and perhaps it's a total review that we need. What is happening may well be. I've known some of the members that formed part of that board, and their drive would be to protect the public. But without intervention, as others have said, and without somebody else questioning the validity of the information supplied to them, they're not able to do that to the greatest extent. Perhaps the quasi-judicial board has been there for a number of years.

I don't think anything in this society is so good that it can't be reviewed and made better. Or maybe we'll find out in the review that it's the best thing there. But I don't think that there is anything so good that a review of it couldn't be taken and action taken from that. Mr. Speaker, I think that about covers my comments on that. I would like to support such an advocacy as a first step, but maybe as a further step, I would also like us to consider a review of the setup so that the costs could be brought more into line with what they were a number of years ago.

The average person appearing before that tribunal would feel more at ease, and the tribunal would be much happier in having these people appear before them. MR. McEACHERN: Mr. Speaker, I rise to support the motion from the Member for Red Deer South. He has shown the need and, in fact, I was impressed by his arguments. I hope that the government moves on this. The private gas companies of this province have for too long been guaranteed a 15 percent profit on their investment, and often they make more. Sometimes it gets so high they are asked to rebate some of it to their customers.

Instead of bringing in 9 percent loans to farmers, maybe the government should have just guaranteed farmers 9 percent of their investments like they do to the gas companies of Alberta. I would like to say to the members of this gallery through you, Mr. Speaker, that it is not right that an industry have a natural monopoly, and gas companies have a natural monopoly. You cannot run two gas lines down one street and give people a choice as to which gas line they would like to hook up to, so it's a natural monopoly; the same with electricity.

You cannot set up a competitive situation; it would be totally artificial and much too costly. When you have a natural monopoly and the service provided is essential, it seems to me to make sense that the government, rather than allowing private enterprise to be guaranteed a rate of return, actually take over and run those facilities as a public utility. Mr. Speaker, many years ago — I think it was 1948 — there was a plebiscite held on whether or not Alberta should have power as a public utility.

Calgary Power promised during the course of that debate and as the plebiscite was taking place that they would provide power at cost. With that expression they were able to win by just a very, very narrow margin the right to continue to operate as a private company. They later explained to everybody that the words "at cost" meant also including cost of capital: in other words, a guaranteed return. So we have not had public utilities for power in this country. Mr. Speaker, this Bill will help the present situation, so I hope the government will take it up and do something with it.

But I think they should look at the longer term and should think very seriously about — we have Alberta Government Telephones, and I think nobody suggests we should sell it or break it up into small parts. Nobody suggests we should turn it over to Ma Bell. We have a much better service, a cheaper service. I think the same kind of thing should apply to all kinds of utilities. We do it for water, sewers, and telephones. Why shouldn't we do it for natural gas and for electricity?

Public ownership would do away with the Public Utilities Board, and then we wouldn't have to have this fiasco that we go through now and the problems that the Member for Red Deer South put forward. The cost of utilities would be a matter of public policy. You could run them with a bit of a profit if you wanted so that you could add to your revenues, or if sometimes there was a bit of a shortfall, you could just make it up or regain it by raising the rates the next time around. It would be a matter of a democratic political process as to how the rates were set and how it was handled.

In the meantime, I'm not going to hold my breath and expect the government to jump into taking over the power and natural gas services to the homes in this province. I think I might die of shortage of oxygen if I did. I will support the Bill, and I congratulate the Member for Red Deer South on a very well-thought-out presentation. My congratulations to you. MR. SPEAKER: The Chair recognizes the nervousness which speaking in the Assembly may bring, but we have been discussing a motion rather than a Bill. MR. MUSGROVE: Mr. Speaker, it is a pleasure to speak to Motion 201.

I certainly support that the Assembly urge the government to consider estab­ lishment of a consumers' advocate for the purpose of intervening at Public Utilities Board hearings and to provide some expertise . . . The purpose of the motion, Mr. Speaker, is to balance the scales between utility companies, which have at their disposal sufficient resources to present their point of view, and the consumers, who may be affected by the decision but often lack the financial means and technical expertise to exercise their rights to intervene in Public Utilities Board hearings.

There are two sides in a rate hearing case before the Public Utilities Board; the parties are usually the applicant and the intervenor. The intervenors are those persons who have come forward on their own initiative or in response to notices published to attend and take

part in the pro­ ceedings. They intervene in the sense that they come forward to be heard by the board before the board makes its decision. According to a 1977 position paper on intervenors and the costs, Mr. Speaker, the board said they not only welcomed

66 ALBERTA HANSARD June 17, 1986 intervention but considered that it's required in order that they may be able to discharge their responsibilities properly and make a proper decision. In the late 1970s I was a director of the Alberta Association of Municipal Districts and Counties. We were approached by numerous municipalities to intervene on their behalf on a utility rate increase. We asked our legal counsel to give us an estimate of the costs and the implications that we would be involved in in this intervention.

We were advised that in cases where an organization, such as the Alberta Association of MDs and Counties, was intervening on behalf of a group of municipalities, the costs would be astronomical, because the utility company was prepared to go to the best legal counsel and accounting experts in North America. After we had researched the costs, it was decided that this might not be the best use of municipal money, knowing that whatever the result of the hearing was, there would be small chance of the Alberta Association of MDs and Counties recovering their costs.

But we were aware at that time that all the defence costs of the utility companies would be put on the consumer price afterward. I notice that in 1986 the Alberta Association of MDs and Counties did intervene in a rate hearing at a cost of some $40,000. I would like to point out, Mr. Speaker, that if you do successfully intervene in a rate hearing, the benefits from that success are of benefit to every consumer in the province of Alberta.

Section 60 of the Public Utilities Board Act gives the board the authority to award costs to intervenors and to permit the recovery of such costs in the rates charged to the customers of the utility company. Cost awards are made after the results of the hearings. It's then a bit of a risk. If you go into an intervention expecting to recover your costs and you're not successful in showing some reason why you're intervening, you will probably not recover them.

Costs will be awarded against an applicant and allowed to be recovered through the rates only if the intervention has been effective in testing the applicant's case to the benefit of all customers and such costs have been reasonably and necessarily incurred. To be of assistance to the board, an intervenor must be prepared to conduct a knowledgeable examination of the utility's evidence and to suggest areas where short- or long- term savings may be implemented.

This might require the preparation and presentation of evidence and the services of legal counsel and/or other consultants to assist in effective preparation. While the board may order the utility company to pay the intervenors' reasonable costs, there is no guarantee that these costs will be awarded. The cost of launching a successful intervention is astro­ nomical. There are few groups with sufficient resources at their disposal to intervene, especially since there is no guarantee that they'll be able to recover them.

Again, it's quite a risk when a person goes into an intervention knowing that the utility company can use the best legal and accounting expertise in North America, and their costs will be recovered through customer rates. The concept of a consumers' advocate is to ensure more effective participation in Public Utilities Board hearings, and this was an issue in the 1970s. On November 13, 1983, a former colleague of ours introduced Bill 212, the utilities customers' advocate Act, and it was debated in the Leg­ islature at that time.

For the Public Utilities Board to operate effectively, it needs participation in the hearings. However, consumer groups do not have the resources at their disposal to intervene unless they can be assured that the costs will be refunded. The Alberta Urban Municipalities Association at one time took an active

part in such interventions. As was mentioned before, while at the present time they encourage municipal­ ities to intervene, they themselves have not launched an intervention in the past three years due to the costs that they feel will not be awarded to them. Motion 201 will alleviate this situation insofar as it will provide for a consumers' advocate who would intervene at the hearings on behalf of the customers. The creation of a customers' advocate would ensure that no group with a reasonable case would be denied proper representation.

In addition, it would give the public confidence that their interests are being protected. With a consumers' advocate, you would be able to screen and avoid duplication of interventions in the hearings. Any group of people with the same case could join forces and jointly bring their inter­ vention to the hearing. I believe a consumers' advocate could co-ordinate that for them. Mr. Speaker, I believe that the Legislature should support this motion. I certainly feel it has been well presented. Thank you. MR. DAY: Mr.

Speaker, in rising to give support to this motion, I notice that it has received support already from both sides of the House. I think that is good, and it shows what a widespread concern this is. A number of the members have commented at some length on documentation and statistics. I believe that the Member for Red Deer South has fairly documented and, I might say, effectively articulated the problems and concerns leading to this issue and this motion.

Since we've already had some copious statistics and doc­ umentation, I'd like to touch on the human element involved as a person or a group considers making an appeal, to consider the human element involved as they're faced with some of the obstacles. In doing that, I believe we will see the need for a consumer advocate. I'd like to direct my comments to three areas: one being my own personal experience in this avenue; number two, contact with my constituents; and number three, what I found in doing a study on this particular issue. Mr.

Speaker, some 10 years ago, in sizing up my utilities bill, I realized that at times rates were being raised, and there were notes mentioned about equalization. There were things in there that I did not understand. I noticed on the back of my utility bill an innocuous little entry, a phone number with a word beside it saying "inquiries." So I took up the challenge. I phoned and began to share some of my frus­ trations and concerns at not being able to understand the way in which the whole operation, as applied to my utilities, was working.

I realized after not too long a period of time that the person on the other end of the phone was probably as ill informed as I on the particular methods of appeal and in terms of giving me answers. That's not to discredit them; I'm sure they were operating with all the information at their disposal. But it gave me some incentive.

I realized that if I was going to do a study and try and find an effective way of making an appeal or an intervention in the utilities process, I was going to have to be prepared myself So I went home and tackled what I felt was the first step, and that was trying to determine how to read my own meter that was stuck to the back of my house. Mr. Speaker, that is not as easy as it sounds, since some of those little dials go backward, some go forward, and

June 17, 1986 ALBERTA HANSARD 67 some don't appear to move at all. But after a few days I succeeded in being able to master how to read my own meter. I was then able to determine how to calculate and determine how many cubic feet of gas were being used and therefore determine if in fact my utilities bill was correct. Mr. Speaker, I was making great headway in my inves­ tigation when the federal Liberals unleashed something upon us called metrication.

Imagine my dismay and chagrin when sitting down to calculate and compute my bill to further my ongoing investigation, I now encountered new terms of measurement and economies of scale. There was a word there which I had never seen before, and again I turned to the innocuous entry on the reverse side of my bill, which said there was a place I could phone to inquire. I made the necessary phone call, and never having seen this particular word before, I asked the receptionist if she knew what gigajoules were. I was pronouncing it wrongly, not having ever encountered it before.

She didn't know if she had a crank call on her hands or what exactly was coming her way. We decided after some period of time that gigajoules were probably something that movie stars wore around their necks. For me it spelled the end of what could have been a worthwhile venture, Mr. Speaker. I was frustrated, I was angry, and I felt I had no one to turn to. Nobody could give me the answers I needed. That was my personal experience in trying to confront the problem of utilities rates and other questions that arise from them. Second came my contact with my own constituents.

Door to door or via letter or phone call, I have received many concerns in this area. People ask me to explain: "Why does this happen? Why this raise? What does equalization mean? What are these different numbers? What do they all have to do with?" Many told me that they called an innocuous little number on the back of their bill and only received more frustration. All I could do, Mr. Speaker, was shrug my shoulders. Even city councillors were some­ what in awe and dismay of how to approach the whole process of intervening in the utilities fray. Thirdly, my experience has come in the area of studying the issue.

I put myself in the place of somebody preparing to go before the Public Utilities Board. If any of you would care to accompany me on this imaginary tour, first, the person would receive 67 pages, which I have here, of information, statistics, data, and directives. Mr. Speaker, these directives and information are well intended and highly informative, but I'm sure we can imagine the effect on any erstwhile individual having hopes of intervening in this process. Next they would receive, as I have also received, approximately 25 more pages explaining the board's position paper on interventions and costs.

Again, highly informative and well documented but surely a deterrent for somebody investigating the process, as they're overwhelmed with infor­ mation. If that person still had enough intent to press on and study these documents, they would find some interesting directives which actually would translate to be obstacles to them. Allow me to outline just a few of those directives, Mr. Speaker. They would find that every intervenor pos­ sesses all the rights and privileges which are afforded in any legal action.

They would find that they may cross- examine the applicant's witnesses, call evidence on their own, receive and examine documents filed, and submit arguments. To the average individual, or even the average city or town council, this is overwhelming legal procedure. They would also find that the cost which intervenors incur in challenging an applicant's case are extensive. They include fees and expenses of counsel, fees and expenses of expert witnesses, costs of transcripts, and expenses of individual intervenors in attending the hearing. It would also be explained to them in this documentation, Mr.

Speaker, that they may require the preparation and presentation of evidence and the services of legal counsel and/or other consultants to assist in effective preparation. Most individuals, and even most groups, town and city councillors, can ill afford the costs involved which would tend to be astronomical and have been well itemized and documented by the Member for Red Deer South. They would find and come across interesting statements and challenges.

They would find that in order to organize the hearing procedures so that there was no wasted time when the hearing commences, many times a prehearing conference is held. They would read how technical staff is assigned to the division, and the function of that support staff is to assist the division in the detailed analysis of the financial and statistical data which has been filed in support. That only increases in their minds the David and Goliath battle they are being pitted in. They would find that a public hearing before the Public Utilities Board is in the nature of a civil action before the courts. Mr.

Speaker, for most of us that's fairly intimidating language, though I recognize the Public Utilities Board does not intend it to be. It's only given to inform. It's fairly awesome and intimidating. They would find that witnesses are sworn, and the order of examination is determined by the interest and the witnesses called to support it. Then they would find that the applicant utility company — and this is an interesting point — may indeed have to pay the intervenor's reasonable costs.

There's no guarantee of that, but they may have to pay those costs which have been incurred in the making of the intervenor's presentation. The beard then permits the utility company to recover such costs from the rates imposed. It all adds up to a fairly immense and overwhelming obstacle. By their statements in their own literature, the Public Utilities Board says that they not only welcome interventions but consider that they require interventions to discharge properly their duties. What they're saying, Mr. Speaker, is that for the Public Utilities Board to operate effectively, it needs public participation.

However, most of the time con­ sumer groups and individuals do not have the resources at their disposal to intervene. Therefore, if the Public Utilities Board needs this process to effectively discharge its duties but groups and individuals are effectively unable to intervene. I suggest that the Public Utilities Board may be in danger of not properly discharging its duties, at no intention of its own, just being as a matter of course. Some concern has been suggested in the past that to have a consumer advocate would increase the amount of activity and input we would get from our citizens in this area. Mr.

Speaker, I don't think we should ever be concerned about increased activity and awareness of our citizens in any process, be it judicial or political. I would see that as an encouraging sign. As it now stands, because of the deterrents there is little or no representation before this board. It comes dangerously close to the concept of taxation without representation. I believe that with a consumer advocate there would be an initial flurry of activity in this area, which could quickly be sorted out as cases that come before the board would have parallels to others applying. Mr.

Speaker, I heartily support, recommend, and stand behind the motion brought forward by the Member for Red Deer South that we have a consumers' advocate to lend a

68 ALBERTA HANSARD June 17, 1986 helping hand to the individuals and groups in our province who want to intervene in this process. MR. CHERRY: Mr. Speaker, I would like to commend my fellow colleague for Red Deer South on his fine pres­ entation. As I was reviewing this motion, Mr. Speaker, I was immediately struck by the definition of the Public Utilities Board's purpose: The Board's primary purpose is to ensure that the customers of regulated utilities receive safe and adequate service at rates which are just and reasonable to both customers of and investors in those utilities.

Furthermore, the board itself stated that to operate effec­ tively, it needs public participation. So what happens to the board's effectiveness if the public can't afford to participate, if the public cannot afford the legal counsel or highly technical expertise necessary for a useful intervention? It concerns me, Mr. Speaker, that while utility rates have gone up, the number of interventions has not, something that can be, I think, directly related to the cost of such interventions.

With no public participation in Public Utilities Board hearings, a void is created which leaves the interests of the public unprotected and public confidence in such boards shattered. A consumers' advocate can step in and breach that void. With a consumers' advocate, citizens and consumer groups would have a guarantee that their concerns would be heard. The present systems allows that costs can be awarded after the hearings. After is far too late for a cash-strapped farmer or a nonprofit organization with limited funds or even an association which must spread its budget over a number of projects.

If the individual or organization has no guarantee that their exceptional costs are likely to be recouped, there is an obvious reluctance to initiate such action. Price tags in the tens or hundreds of thousands of dollars deter precisely what the board deems necessary to discharge its duties properly: public participation. I know that there is concern that the establishment of a consumers' advocate would lead to masses of people and groups rushing to the Public Utilities Board to launch interventions. In all likelihood more people would be inter­ ested in such matters.

I would offer this qualifier to my general support of this motion: that a set of general criteria or a screening process be established to determine the validity of any potential interventions by the consumers' advocate. I also maintain that it's better that the hordes come than that the public lose confidence in and respect for institutions that were designed to protect them. Therefore, Mr. Speaker, I support the principle of this motion. Thank you. MR. FOX: Mr. Speaker, I too rise to express my support for this motion and also appreciate the research that was put into this matter by Member for Red Deer South.

It's an area of obvious concern for people all across the province of Alberta, as indicated by the areas represented by the members who have spoken in favour of the motion. I think any of us who have participated in hearings before various boards, the Public Utilities Board being one of them, knows just what an intimidating experience it can be, as well as what a great expense it can be to the individuals who are forced to seek redress through these boards. An advocate would certainly go a long way toward making that an easier and less intimidating experience.

I think we might give consideration to the suggestion of the Member for Cypress-Redcliff that an entire review be made of the process through which power and other utility services are delivered to people in Alberta, because there is a great deal of suspicion on the part of our citizens, residents in the province, that there's a considerable amount of hanky-panky and unfair practice that goes on behind the scenes. It's not just with the Public Utilities Board but with other boards like the Surface Rights Board and the Energy Resources Conservation Board.

I think we might do well to consider an advocate or ombudsman for people who are intervening or making applications before these other boards as well. The very exorbitant rate of return that is guaranteed our power companies has been referred to by other members. I believe it's 17.5 percent guaranteed over and above their operating costs on the investment that they determine they've made in their utility. I think it's quite literally an opportunity to print money. It's a ludicrous rate of return, and it's obviously of concern to people on both sides of this House and deserves close scrutiny. I might suggest, Mr.

Speaker, that as a way of funding the office of the ombudsman, if that is indeed what we want to do, we might look at lowering the 17.5 percent rate of return guaranteed these power companies by 1 or 2 percent to provide the funds needed to operate such an office.

But I think the long-term solution to the problem was suggested by my hon. colleague from Edmonton Kings- way; we need to catch up with the rest of the country and start looking at public delivery of electrical power and natural gas in the province of Alberta to ensure not only that our people get the service at a reasonable cost but that we have a greater degree of control over it. Mr. Speaker, I hope to establish your confidence again in the word "brief by sitting down now and expressing again my support for this motion. DR. CASSIN: Mr.

Speaker, I'd also like to take this opportunity to speak in favour of the motion presented so eloquently by our Member for Red Deer South in the recommendation that we appoint a consumers' advocate in dealing with the Public Utilities Board. We've had a great deal of discussion this afternoon, and a number of issues have been raised on both sides of the House. We have discussed the difficulties and the concerns of the small municipalities and the small user, the individual or resident in our constituencies. We also must recognize the other role that the consumers' advocate would play in being a neutral body.

It's not necessary that all the concerns and worries of our constit­ uency are involved in a judicial process that is going to cost this province or various groups a good deal of money. Sometimes it's reassuring just to know that there's someone out there who doesn't necessarily have a vested interest in the utilities board or some other board and represents those individuals, has the knowledge and the background to advise them and to guide them.

I think the conclusions that have been made by a number of the speakers boil down to two points: number one, the financial consideration and, number two, the technical exper­ tise that many of us lack in dealing with large corporations that have a large bank account and the resources, their own research people, to protect and support their arguments. It gives me great pleasure at this time to support the motion that has been brought forth today by our Member for Red Deer South. MR. JONSON: Mr. Speaker, I wish to take this opportunity to speak to Motion 201. As I understand the purpose of

June 17, 1986 ALBERTA HANSARD 69 the motion, it is designed to balance the scales, so to speak, between utility companies and intervenors at public utility hearings, intervenors who are sometimes, through no fault of their own, short on legal counsel and possibly expertise. I'm sure the motion is designed to generally improve the process of arriving at reasonable utility rates in the province of Alberta. However, Mr.

Speaker, we can examine this issue from the point of view of individuals and consumers, but we also might look at it from the point of view of the evolution, the operation, of the Public Utilities Board. To make this clear at the very beginning, I might say that being from a rural constituency, I've had brought to me the concerns and complaints that other hon. members have referred to in their remarks this afternoon.

But sometimes when we're looking at an issue such as this, we might zero in on what seems to be a very tidy solution and ignore two or three or four other matters that might be causing the problems that have been referred to. Mr. Speaker, I think we should examine the nature, the purpose of the Public Utilities Board and, most importantly, some of the developments which have occurred for the board over the last few years. I note that the Public Utilities Board is responsible for telecommunications, electrical rates, water rates, and gas utilities.

This whole area of respon­ sibility is expanding rapidly and becoming more complex. The area of telecommunications by itself might be one

section in which a group of experts could be kept very busy judging the reasonableness of certain applications and rates. Certainly the way things are going, there's a great workload being required of the board and perhaps an ever- widening area of expertise being required that no one person or small group of people can fulfill. Mr. Speaker, it was about three years ago that I was surprised to find when I was inquiring that the Public Utilities Board was responsible for setting the price of milk.

I had to wonder for a moment, as good as the people on the Public Utilities Board might be, if this was an area in which they were really that expert and in which we might be best served by the matter being dealt with there. I would suggest that an additional measure to this motion would be to consider whether the workload of the Public Utilities Board is realistic. Perhaps there should be some division of responsibility with separate boards involved. More atten­ tion could be given to specific areas of the board's respon­ sibility. Mr.

Speaker, there is another aspect of board operations and its relationship to consumer concerns that I'd like to briefly comment upon. A judicial or quasi-judicial body is usually in a situation where the faces of those making presentations on both sides of an issue change with regularity. In the situation in which the Public Utilities Board operates, one side of Public Utilities Board hearings always has the same familiar presence. The representatives of the utility companies have experience and expertise and do a very good job. Let's not knock them for doing what they do very well.

Representatives of consumer groups develop the impression, rightly or wrongly, that Public Utilities Board members and utility company intervenors are a close-knit group. Hence, there is the impression from consumers that their representations are really not being heard that well. Mr.

Speaker, perhaps it is a simplistic addition to this motion, but I would suggest the members of the Public Utilities Board conduct an in-service session — that's a good old teacher term — or retreat and sit down in an informal situation and listen to some of the concerns and feelings that people who've been through their hearings feel and might pass on to them afterwards. I think that might be a very sobering experience and one that in the final analysis Public Utilities Board members would very much appreciate.

I hope this debate this afternoon will help raise awareness and understanding of the problem of alienation which seems to be in the minds of many people. Mr. Speaker, I don't feel that we should leave this debate without also recognizing that all of the problem is not centred with the Public Utilities Board. I think there is a responsibility on the part of government and on the part of the utilities companies to explain and to justify their policies and the prices that they set for the consumers of the province.

I'm quite confident that we benefit from the efficiency of privately owned companies offering these serv­ ices. But we need to be assured that those operating the companies remember that the policies, techniques, and approaches of typical private enterprise should still be fol­ lowed in the case of operating utility companies and pro­ viding adequate efficiency. I also think that from time to time the investment return situation for the power companies should be reviewed. Certainly the investors themselves should be rewarded for the investment they make, the money they put forward. But does th